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 15,193 new jobs to Kansas City, every single year.
First-time employers who employed fewer than 20 employees created 16,009 new jobs in 2020. These new and young firms contributed an average of 15,193 new jobs to the Kansas City metro area each year from 2016 to 2020.
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 2021. New updates include:
- Job contributions by Kansas City startups through 2020
- 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 2016-2020
- Number of KC startups by industry
- Number of KC tech startups by segment
- Average startup density by industry in Kansas City
- KC startup wages vs. KC tech startup wages vs. KC average wage vs. living 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.
And yet 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 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 2020, KC startups—defined in We Create Jobs as first-time employers in the nine-county KC metro area with fewer than 20 employees—created 16,009 jobs. From 2016 to 2020, the cumulative job-creating impact resulted in 72,583 jobs, accounting for 59.7% of all new jobs and 6.8% 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 (QCEW) 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 16,009 new jobs in the Kansas City area2 in 2020. These firms created an average of 15,193 jobs each year from 2016–20.
- Accounting for the employees these same firms hire in each succeeding year and accounting for job losses as well, first-time employers from 2016–20 created 72,583 jobs in 2020. This accounted for 59.7% of all new jobs in the Kansas City metro and about 6.8% of the total employment.
- Tech sector new job wages in the metro area start out at about twice the average wage for all new jobs, making that sector a key focus for job growth. In Kansas City, new tech sector firms created 948 jobs in 2020 and averaged 932 new jobs from 2016–20.
- Using the hiring of a first employee as a proxy for startup, data reveals there were 6,283 startup3 firms in the KC area in 2020.
- For the first time since tracking this data began in 2016, the startup average wage exceeded the Kansas City metro annual wage. In 2020 the average wage paid by new entrepreneurial firms was $48,686, compared with the average metro wage of $47,641. By year five, the wages paid by startups increases to about $52,000 per year.