While entrepreneurship is critical to the success of a city’s economy, measuring the success of entrepreneurship based on job creation may be somewhat misleading in terms of other factors that startups create. Josh Russell, a research assistant at the Ewing Marion Kauffman Foundation, and Jason Wiens, Policy Director at the Ewing Marion Kauffman Foundation, have some helpful ideas, but not every metric on economic development should be the number of jobs created.
The 2015 Local Economic Conditions Survey conducted by the National League of Cities showed that 47 percent of cities said the “number of new business starts” was a positive driver of local economic conditions. City leaders viewed new business creation as a source of local economic improvement more than any other factor.
More important than just creating jobs, local leaders can boost entrepreneurship and propel economic growth by using a menu of tools available to them. Here are some of them:
• Build connections that cause entrepreneurs to think and act together, building a robust local ecosystem.
• Welcome immigrants, who are twice as likely as native-born Americans to become entrepreneurs.
• Support women in their financial capital, mentorship, and work-life balance challenges.
• Develop human capital with a strong school pipeline that can develop a strong, local entrepreneurial ecosystem.
City leaders should create conditions that allow more entrepreneurs to start businesses and nurture that environment so that those businesses can grow. Cities that invest in people should see entrepreneurial benefits.
Written by Jim Simon, a Principal at RSG