Headlines often boast of companies coming to Kansas City and opening their doors to anywhere from 300 to 1,000 new employees. Entrepreneurs, in comparison, are a job-creating powerhouse, working outside of the spotlight to deliver an average of 16,413 new jobs to Kansas City, every single year.
First-time employers who employed fewer than 20 employees created 19,849 new jobs in 2021, up 22% from 2020. These new and young firms contributed an average of 16,413 new jobs to the Kansas City metro area each year from 2017 to 2021.
"We Create Jobs" is a report from KCSourceLink that quantifies the impact of new and young firms to Kansas City’s economy. Connecting the data from Kansas City with the existing theory pertaining to entrepreneurship is a positive step in supporting civic leaders in their quest to boost economic activity.
We Create Jobs was last updated in September 2022. New updates include:
- Job contributions by Kansas City startups through 2021
- Survival rate of KC startups vs. national firms
- Comparison of startup wages to the living wage
- Job creation by KC startups and tech startups from 2017-2021
- Number of KC startups by industry
- Number of KC tech startups by segment
- Average startup density by industry in Kansas City
- All KC startup wages vs. KC tech startup wages vs. KC non-tech startup wage vs. KC average wage vs. living wage vs. poverty wage
Now, more than ever, our startups need you to tell the story of the jobs they deliver and of their economic impact.
The COVID-19 crisis and the emergency measures taken to slow its spread have wreaked havoc on entrepreneurs and small business owners across the state: shops have closed, capital investments for new startups have slowed, markets have shifted. But the data suggests that many entrepreneurs saw opportunity during the pandemic, creating new startups and new jobs.
Historically, we know that Kansas City startups are vital to our economy.
JOBS: TREND AND IMPACT
New and young firms are the primary source of job creation in the U.S. economy, according to the Ewing Marion Kauffman Foundation. In fact, the Kauffman Foundation reports that these new businesses account for a disproportionate amount of new job growth, creating nearly all net new job creation and almost 20 percent of gross job creation.
In 2021, KC startups—defined in "We Create Jobs" as first-time employers in the nine-county KC metro area with fewer than 20 employees—created 19,849 jobs. From 2017 to 2021, the cumulative job-creating impact resulted in 86,761 jobs, accounting for 63% of all new jobs and 8% of the total employment in the Kansas City metro area.
"We Create Jobs," a spinoff of KCSourceLink’s annual state of entrepreneurship report "We Create KC," quantifies the impact of new and young firms to Kansas City’s economy. Using data from the Quarterly Census of Employment and Wages for Missouri and Kansas, KCSourceLink calculated the number of jobs from first-time employers by looking at employers who paid for unemployment insurance for the first time. KCSourceLink further sorted that number to include only those employers with 20 or fewer employees in the Kansas City nine-county metro area.
HIGHLIGHTS FROM THE FULL REPORT
In addition to jobs created by first-time employers, the report also provides year-to-year comparison data regarding job creation by new and young firms and by the tech sector as well as wage growth and the industrial density of startups.
Further highlights from the report include:
- First-time employers who employed fewer than 20 employees created 19,849 new jobs in the Kansas City area in 2021. These firms created an average of 16,413 jobs each year from 2017-21.
- Accounting for the employees these same firms hire in each succeeding year and accounting for job losses as well, first-time employers from 2017-21 created 86,761 jobs in 2020. This accounted for 63% of all new jobs in the Kansas City metro and about 8% of the total employment.
- Tech sector new job wages in the metro area start 42% higher than the average wage of all new jobs, making that sector a key focus for job growth. In Kansas City, new tech sector firms created 1,879 jobs in 2021 and averaged 1,152 new jobs from 2017-21.
- Using the hiring of a first employee as a proxy for startup, data reveals there were 8,197 startup firms in the KC area in 2021.
- For the first time since tracking this data began in 2016, the startup average wage exceeded the Kansas City metro annual wage. In 2021 the average wage paid by new entrepreneurial firms was $73,190, compared with the average metro wage of $65,525.