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When it comes to job creation, should the state focus on expanding existing businesses or creating new ones?

A report from UW-Extension’s Center for Community & Economic Development shows that between 2010 and 2016, the number of establishments and employment in Wisconsin remained flat. The state’s net gain in establishments was just 83, while net gain in employment was 24,776.

Startups drive job growth, but they are vulnerable to employment contraction or shutting down. Meanwhile, larger firms add the most absolute jobs, but at slower rates. Expansion and employment data across industries reveals this trend. In 2015-16, five sectors created 58 percent of new jobs through business expansion.

Rank the following industries from highest to lowest by the number of jobs added in Wisconsin through existing business expansion in 2015-16.

A) Retail trade

B) Manufacturing

C) Construction

D) Accommodation and food services

E) Health care and social assistance

Answer: B, E, A, D, C

Manufacturing added 29,760 jobs through expansion of existing businesses, followed by health care and social assistance (24,351), retail trade (21,121), accommodation and food services (18,507) and construction (14,088). Although manufacturing leads this list, it ranks sixth in the number of expanding businesses, indicating that large, established firms add more new employees but expand at slower rates.

— Jackson Parr, UW-Extension, jgparr@wisc.edu

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Source: University of Wisconsin Extension, Center for Community & Economic Development.

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