Young Tech-Based Companies Contributing Millions to Region’s Economy
Tech-based startups that receive early support from mentors, advisors and investors are showing themselves to be significant contributors to Northeast Ohio’s economy, even early in their growth. In 2011, 121 young companies that benefited from business assistance and sometimes seed capital from JumpStart Inc. collectively generated more than $220 million in economic benefits for the region, according to an annual report from The Center for Economic Development at Cleveland State University’s Levin College of Urban Affairs. The 121 innovative businesses included in the report collectively increased Ohio state and local tax revenues by $12.3 million in 2011, more than covering the cost of both the technical assistance provided and the seed capital invested by JumpStart.
"Thanks to the commitment of public, private and philanthropic partners, organizations like JumpStart are able to provide free or low-cost resources to entrepreneurs that have the potential to go on to create wealth and opportunities for their communities," said entrepreneur and JumpStart Board Chair Doug Weintraub. "Now we’re seeing some of the young companies we and our partners in the region were able to help at pivotal points in their development—companies like digital marketer Knotice, regenerative therapies developer Juventas Therapeutics or water remediator ABSMaterials—really start to take off and produce returns on the region’s investment by attracting additional risk capital, generating revenues, paying taxes and creating new jobs."
Companies analyzed in the report helped create and retain 776 in-region direct jobs, with a total Northeast Ohio employment impact of more than 1,600 total jobs in 2011. "These largely IT, cleantech and healthcare companies need skilled talent, so the positions they create are generally very good-paying ones, in this case averaging a yearly salary of around $65,000," says Weintraub. Every new job created by these companies and their suppliers also generated new earnings for local households, increasing total household earnings in Greater Cleveland by $89 million in 2011.
JumpStart expects the impact some of these innovators have on the region's economy will increase as the companies continue to grow. Sixty-three companies included in this 2011 impact analysis also were surveyed in 2010. In one year, those companies increased their aggregated Northeast Ohio employment by 111, payroll by $8.7 million and expenditures by $20.6 million.
Data for the economic impact study was collected via a survey of a sampling of companies that received support to speed their growth from Cleveland-based nonprofit venture development organization JumpStart and/or the associated North Coast Angel Fund. The CSU report does not include the economic impact of all startups in the 21 counties of Northeast Ohio or even all of the companies to which JumpStart provides assistance, just those who responded to the survey, reported some Ohio employment, payroll or expenditures in 2011, and certified their responses. Weintraub adds, "This is a positive indication of the transformative role JumpStart, our partners and others tech-based economic development resources can continue to play in our region’s economic transformation."
To read the entire 2011 Economic Impact of JumpStart Inc. Portfolio and Client Companies report, visit www.jumpstartinc.org/results/reports.
# # #
JumpStart accelerates the successes of diverse entrepreneurs, their companies, and the ecosystems supporting them. JumpStart has provided intensive business assistance to more than 400 entrepreneurial clients and invested in 64 early stage Northeast Ohio companies. To learn more, follow @JumpStartInc on Twitter.