Each year, Cleveland State University works with JumpStart to prepare a report tracking the yearly economic impact of companies supported by us and our many partner organizations. This year’s report, which looks back at 2015, showed that 270 companies supported by our collaborative group generated more than $1.4 billion in economic impact for the state of Ohio.
Over the last five years that number is upwards of $3 billion. Those are some big numbers, but how did we come up with them? And what about all the other numbers in the report; what do they mean?
To help answer a few of these questions, we’ve compiled this list of five things you should know about our 2015 economic impact report.
It Tracks Impact In Northeast Ohio & Statewide
As you’d expect, much of the economic impact this report tracks happens right here in Northeast Ohio. However, our group has also supported some companies who have gone on to create impact in other parts of the state, which we also track.
To keep things simple, we use statewide statistics when we talk about this report. However, if you’re interested in the NEO-only numbers, you’ll find them within.
It Uses A Widely Respected Statistical Model
Boiled down to the basics, this report gathers data from companies we support, then calculates the impact of those companies across a variety of categories. This impact is measured directly, and through “ripple effects.”
To calculate these ripple effects, the good folks at CSU’s Levin College of Urban Affairs have chosen the IMPLAN model—a model used by more than 1,000 other private and public research institutions—to analyze this type of data.
Without diving completely into the weeds, the IMPLAN model takes all of the basic, self-reported data (revenue, payroll, tax bills etc.) and extrapolates it out to estimate how the impact of one dollar or one job ripples through the economy. You’ll see these ripple effects referenced throughout the report as “indirect” or “induced” impact numbers.
There Are Different Kinds Of Impact
Once you understand how economic impact is calculated, the next thing you’ll probably notice is how many separate “impact” categories there are. Here’s a quick summary:
- Employment impact: the number of cumulative jobs created in the economy.
- Labor income impact: household earnings that are generated in the economy.
- Value added impact: comparable to gross regional product.
- Tax impact: federal state and local taxes.
- Output impact: the total value of goods and services produced in the economy.
You can see that we use “Total Output Impact” as our top-line, $1.4 billion financial statistic. However, if you’d like to see the IMPLAN model at work, you can easily break this figure into direct impact ($777 million), indirect impact ($362 million) and induced impact ($270 million). The other impact categories work essentially the same way.
The Numbers Are Way Up
If you keep track of these reports every year, you’ve probably noticed how much higher the 2015 numbers are than the 2014 numbers. Much of this can be attributed to the great companies we work with who are scaling their operations, producing more goods/services, hiring more employees, paying more taxes, etc. Some of it also has to do with the fact that more companies responded to our request for information in 2015.
Fortunately, we also keep track of a core group of companies who have consistently reported their data each year since 2011, which allows for an apples-to-apples comparison. The numbers from this core group, which you can find at the end of the report, not only account for a large piece of the overall pie ($895 million of the total $1.4 billion in 2015 output impact), they also show just how explosively some of the companies we support are growing year-over-year.
You Can See What “Support” Actually Means
Wondering what we mean when we say that we “support” these growing companies? This report will tell you. Check page eight and you’ll see that these companies received a combined total of 25,849 hours of pro-bono assistance in 2015, and at least 94,653 hours of assistance since they started working with us or one of our partners.
You can also see how many respondents have received both funding and business assistance (93), versus those who have received business assistance only (177). You can even chart how much of this funding came directly from JumpStart ($15.6 million).
Obviously, there is a lot of information to digest. So, take a look for yourself. Click here to download the 2015 report. Then, compare it to the 2014 report to see how our entrepreneurial ecosystem continues to grow and evolve every year.