Economic development policy that focuses on recruiting existing businesses to Memphis is good for PR, but ignores the bigger opportunity: entrepreneurs. We should all want to see more startups and young companies thriving in Memphis, because it is great economic policy and utilizes the human capital that is already present in our city.
But where’s the proof?
A study release in late 2009 by the Kauffman Foundation (the world’s largest foundation devoted to entrepreneurship) examined U.S. Economic Census Data and statistically showed who really creates jobs in America. The engines of job growth are startups and young firms — companies between one and five years old. Yet in Memphis how many citizens can name one startup, let alone five or ten young firms?
Key findings from the study are as follows:
Fact 1: Over the past 30 years, young companies have accounted for a massive amount of all net jobs (more than two-thirds).
Fact 2: Each young company creates an average of 4 jobs every year.
Fact 3: Since 1977, without startup companies, net job creation for the American economy would be negative in all but a handful of years (meaning we would have lost more jobs than we created over the past 30+ years).
We understand unemployment more acutely now as a nation as a result of the recent recession. In Memphis though, we have a unique recipe of unemployment. Today, approximately 35% of our workers are either unemployed or have stopped looking for a job for so long that they are not included in the unemployment rate. In other words, better than 1 in 4 of our fellow citizens could be economically productive for their families and for our community, if there was a job available.
Not only are these citizens denied the satisfaction of earning a living, but also our community misses tax receipts that pay for government, safety, schools, and municipal improvements. It is likely even more troubling for those without jobs, who may be losing hope that the lives of their children will be better than their own. Hope and peace in society are predicated on creating lots of good jobs for those that want to work — it is the only way forward that provides true economic stability.
Falling from the Sky
Jobs need to be created, not moved or saved — value needs to found and provisioned. This is why we need to empower entrepreneurs and hold them in high esteem as a community. Entrepreneurs find ways to create value and employ the previously unemployed to provide that value. The employed get and provide hope, assuring others that they too can earn a living and care for their families. The connection between how people want to live and what we want our city to become, rests on our abilities to create jobs. The best way, as the data show, is through entrepreneurship.
Call to Action
We need to get back to basics on economic policy and embrace the facts. If you want to create jobs in your city the focus should be on entrepreneurs. These “rock stars” create the most jobs.
In Memphis, let’s move on from the legendary stories of FedEx, Holiday Inn, and AutoZone — those entrepreneurial days have long since past. It is time to support our modern day entrepreneurs and bring new stories to light.
As citizens, let’s convince our friends, colleagues, and neighbors that they are not crazy — that they should start that new business in pursuit of the American dream. As a city, let’s adopt policies and attitudes that encourage entrepreneurship. And as individuals, let us no longer deny our own desires to create, innovate, and be business owners.
Let’s bet on ourselves and our city, and start new businesses together.
Our economic, cultural, and social future depends on new heroes.
If you want to find out how you can help me put these words to action call me at +19012137795 or email me at firstname.lastname@example.org.