How Many Jobs Do Your Entrepreneurs Create?

We Create Jobs | KCSourceLink's report on job contributions by KC startups

As an entrepreneurial ecosystem builder, you know that entrepreneurship matters. Nationally, it’s a game changer for our economy; locally, entrepreneurship has shaped your city’s character, culture and vibrancy. But what we didn’t know, before today, was how to quantify the impact of entrepreneurship, in our own backyards.

Thanks to We Create Jobs, a new report researched by SourceLink with our KCSourceLink affiliate, we finally have a number we can talk about.

KC startups created 16,325 new jobs in 2016.

Today, KCSourceLink released We Create Jobs. With this jobs report, KCSourceLInk has developed a new statistical analysis that sheds unprecedented light on the importance of startups to a local economy—here the bistate, nine-county region of Kansas City. The report provides precise statistics on job creation and reveals that entrepreneurial venture creation is an extremely powerful economic development engine.

The numbers? In 2016, KC startups created 16,325 jobs. On average, they create 16,376 new jobs every year.  And from 2012 to 2016, the cumulative job-creating impact of Kansas City’s first-time employers resulted in 84,011 jobs, accounting for 65 percent of all new jobs and about 7.7 percent of the total employment in the Kansas City metro area.

And these numbers are real and current. They aren’t guesses or estimates or promises.

The full report goes on to reveal job contributions by industry and by tech startups; how wages compare to the average KC wage and more.

How did KCSourceLink get this number?

We Create Jobs, for the first time ever, tracks jobs created by new and young establishments at the city level. KCSourceLink tracked first-time employers in nine-county Kansas City metro area—Johnson, Leavenworth, Miami and Wyandotte counties in Kansas; and Cass, Clay, Jackson, Platte and Ray counties in Missouri. They calculated the number of jobs by looking at employers who paid for unemployment insurance for the first time—a registration required by law. They further sorted that number to include only those employers with 20 or fewer employees in the metro area—to weed out acquisitions and corporate relocations—and then tracked the growth of those insurance registrations over time, subtracting jobs lost by firms that shrink or fail.

The result: a precise and reliable count of job creation. And these jobs don’t just reflect tech startups.  In Kansas City, these jobs come from all types of entrepreneurs, and show that economic impact comes from restaurants, retail, manufacturing, administrative as well as tech.

But are these “good” jobs?

This statistical analysis also lets KCSourceLink track the salaries paid by these first-time employers.

The data reveals that while average salaries paid by first-time employers trail the overall metro average for the first three years, they exceed the overall average after year three, and widen the gap considerably in succeeding years. And wages from first-time tech employers start well above the overall metro average.

Why is this jobs number important?

As the portal for entrepreneurship in Kansas City, KCSourceLink talks to entrepreneurs every day. Entrepreneurs and small business owners call them with their struggles and they connect them to vital resources, celebrate their successes and track Kansas City’s entrepreneurial progress.

As entrepreneurial ecosystem builders, we all know that entrepreneurs create impact. We just didn’t have the hard data at the local level to demonstrate that significance to our city leaders and to show stakeholders the quantifiable proof that we need to invest in them and the organizations that support them.

Jobs aren’t a silver-bullet metric.

SourceLink has helped communities, at various stages, develop their entrepreneurial infrastructure—from those who need to understand who their entrepreneurs are to those who are ready to map their ecosystems to those who are looking for ways to sustain and measure their entrepreneurial efforts.

From that work, we know that jobs aren’t a silver-bullet metric.  Different metrics—talent flow and churn, innovation pipeline, resource connectivity, entrepreneurial density, etc.—come into play at different states of a community’s entrepreneurial development.

While jobs aren’t the only or even the most important metric, they are certainly a compelling one. We’ve written enough private, state and federal grants; talked to enough legislators; and pitched enough economic developers to know that how to talk “jobs” and the ability to benchmark and measure them opens and even illuminates conversations around how entrepreneurship can feed economic development.

People outside of entrepreneurship—and here I’m talking about most specifically about funders—get “jobs.”

So, connecting the data from your city with the existing theory pertaining to entrepreneurship is a positive step in supporting civic leaders in their quest to boost economic activity. It acknowledges the importance of our entrepreneurs and justifies the work of your entrepreneurial resource network.

Knowing your jobs number—good, bad or ugly—gives you common ground on which to talk to stakeholders about how build an entrepreneurial infrastructure to support and sustain entrepreneurship.

“KCSourceLink’s report makes it clear that our entrepreneurs are a critical part of the economic health and vitality of Kansas City and our entire region,” said Kansas City, Missouri, Mayor Sly James. “We should be grateful to these entrepreneurs for the companies they build and the people they employ, and we—civic, community and corporate leaders alike—should do everything we can to support their success.”

So here’s how you can help:

  • Invest in your entrepreneurs. Whether that’s improving access to capital or committing to shopping local, put your dollars where your entrepreneurs are.
  • Know your ecosystemKnow your resources, map them and make them visible. Be ready to help entrepreneurs with not just programs, but a full continuum of support resources.
  • Make it visibleBuild an entrepreneurial hub. Maybe that’s a community business calendar or maybe that’s The Resource Navigator. Make sure your entrepreneurs know where to get help.
  • Invest in your infrastructure. Recognize and support your entrepreneurial service organizations. Build  an infrastructure that truly supports and sustains entrepreneurship.
  • Activate your community. Make collisions easy. Convene a meetup, host a pitch competition, connect people. Tell your story to your community.
  • Measure your impact. Determine what metrics will move your community forward and track them. 
  • Support the educational system. Build programs and opportunities to develop the talent of tomorrow.
  • Support innovative research. Support universities, hospitals and research institutions and connect their technologies with entrepreneurs who can commercialize them. 

The We Create Jobs statistical model created in Kansas City is replicable for other communities. With access to the right data sets, SourceLink can develop metrics on a city, regional or statewide basis.