In many ways, it’s a great time to be living in Northeast Ohio. Our culinary and cultural scenes are both booming. Cleveland is filled to the brim with young professionals who aren’t just working downtown, but living there too. And of course, our Cavaliers are the reigning NBA champions and the Indians made it to the World Series!
We also have a growing community of young startup companies and dedicated support organizations who’ve helped our region go from a place repeatedly ranked last in the nation for entrepreneurial friendliness to a place recently ranked as one of the top 50 entrepreneurial-friendly cities in the entire world. Not to mention, we just had our first billion-dollar acquisition with CoverMyMeds!
We’ve seen such a positive change, so much so that for the first time in many years, people haven’t asked me why I moved back to Northeast Ohio.
But while so many things are going right in NEO, we still haven’t caught up in one critical area — job growth.
According to data from Team NEO, we have created 445,000 fewer jobs between 1990-2016 than we would have if our employment numbers had grown at the U.S. average. Our total employment has been trending up since the recession — so while we’re not growing like the rest of the county, we’re not declining either — but even with this improvement, we’re still only at 34% of the U.S. average growth rate from 2013-2016.
This might seem a bit shocking, given some of our region’s recent successes — not just CoverMyMeds, but also other startups like Explorys, TOA Technologies, Embrace Pet Insurance, Catacel and CardioInsight.
It starts to make more sense when you consider that while job growth has not kept up with the national average, our overall productivity growth outpaced that average by 12% from 1978-2015.
Essentially, our battle to overcome our “rust belt” past has turned us into an economy that is much more efficient, but also smaller. We’ve done much to reverse our decline, and we certainly haven’t lost our legendary Midwestern work ethic, but if we really want to see significant new job growth, we’re going to need to leverage our strengths in new ways.
In the early 2000s, our regional leaders turned to startup entrepreneurs and the tech industry to provide the foundation of a stronger 21st century economy, which has been an incredibly important step in the right direction.
But tech startups also take a lot of time to create their jobs, so they won’t solve our employment issues all by themselves. To truly close the job growth gap, we’ll need to think even bigger — and that means:
- Connecting with the traditionally disconnected. There are many neighborhoods disconnected from the entrepreneurial support and growth that has flourished in NEO — where poverty and lack of job opportunities remain severe problems. Even creating moderate job growth in these neighborhoods, by helping businesses within those regions grow or attracting business to move to those neighborhoods, can have a truly transformative impact.
- Focusing on scaleups. Ninety percent of net new jobs in the U.S. are created by these small, high-growth potential companies. And these companies grow even faster when they have support to overcome the new challenges they face. Whether they are tech-based or not, these small businesses are the engine of any local economy. When they thrive, we all thrive.
- Expanding what innovation means in our entrepreneurial ecosystem. That means thinking beyond the stereotypical startup template of “apps and SaaS” and including emerging industries that provide synergies with our traditional strengths as a region.
At JumpStart, we believe so strongly in these ideas, that we have updated our mission statement to reflect a renewed commitment — not only to helping entrepreneurs, but also to leveraging the power of entrepreneurship and innovation to transform our communities.
Stay tuned — we know that this lift will require a community effort — which means not only partnering with for profit, nonprofit and thought leaders, but also working closely with the Ohio Third Frontier to ensure there are enough resources to drive significant job growth.
This post originally appeared in Crain’s Cleveland Business on April 24, 2017