Entrepreneurship serves a key role in a region’s economic vitality. New businesses account for nearly all net new job creations and almost 20 percent of gross job creation, reports the Kauffman Foundation.
And yet, while this research reveals that entrepreneurship matters to the U.S. economy, until recently, we didn’t quite know the impact entrepreneurship has on local economies.
That was the mystery that fueled our first jobs report, conducted for our Kansas City community. This week, that research was recognized with a Bronze Excellence in Economic Development Award from the International Economic Development Council (IEDC). The honor was presented at an awards ceremony on Tuesday, October 2, during the IEDC Annual Conference, which was held September 29 – October 3, in Atlanta, Georgia.
Entrepreneurs Create Jobs, Locally
Headlines often boast of companies coming to a city with the promise of opening their doors to hundreds of new employees.
Entrepreneurs, in comparison, are a job-creating powerhouse, working outside of the spotlight to bring jobs to a community. Before, we could only measure the economic impact of our startups at the national level. With We Create Jobs, Kansas City was able to track that number at the metro level. And here’s what Kansas City now knows: every single year, Kansas City startups bring an average of 16,376 new jobs to Kansas City.
This new research tracks net new job creation by startups at the metropolitan level. Working KCSourceLink, SourceLink tracked first-time employers with fewer than 20 employees and calculated the number of jobs created by looking at employers who paid for unemployment insurance for the first time—a registration required by law. The result: a comprehensive, precise and timely count of job creation.
Kansas City’s We Create Jobs, a new and nationally unprecedented statistical analysis, reports that startups added an average of 16,376 new jobs to the Kansas City metro area each year for the past five years.
Why is this important?
This report allows entrepreneurship ecosystem builders to talk about the impact of entrepreneurial firms on economic development in a way that community, corporate leaders and elected officials can understand.
Connecting the data at the metro level with the existing theory pertaining to entrepreneurship is a positive step that can help communities and economic developers:
- rally support for entrepreneurs and entrepreneurial ecosystem building
- validate the work of entrepreneurial support organizations
- build the case and an infrastructure to support and sustain entrepreneurship
- support civic leaders in their quest to boost economic activity
We know that entrepreneurs contribute to the culture and character of our regions and we know how important it is to tell their stories—and now we know, quantifiably, the impact of startups on a local economy.