New Firms Create Jobs, but They Need Community Connections to Succeed
Each year the Boulder Chamber celebrates local entrepreneurs with its signature event, the Esprit Entrepreneur. The reason is clear: entrepreneurs have traditionally been drivers of economic vitality, but they need funding and other kinds of support to grow and thrive. Recent national data from the Ewing Marion Kauffman Foundation confirm the importance of new companies in creating jobs, but it also warns that we may need to do more to encourage them. The Foundation also identified ways in which communities can work to promote and encourage entrepreneurs. Among them are creating vital community connections through key organizations and events.
This year’s Esprit Entrepreneur event is just such a support mechanism. It celebrates and provides valuable advice for both emerging companies and those that have been able to thrive and contribute to the community and the national economy. Perhaps more important, Esprit creates community and organizational connections identified as crucial for encouraging startup activity, or in the words of the Kauffman Foundation, creating a “startup ecosystem.”
New Businesses Create Significant Number of Jobs,
But National Rates Declining
According to the recent Kauffman Foundation Entrepreneurship Policy Digest, “…new businesses account for nearly all net new job creation and almost 20 percent of gross job creation.” In fact, Kauffman states that firms under one year old have created an average of 1.5 million jobs per year over the past three decades. Even through the Great Recession, young and small firms remained a positive source of net employment growth.
However, the Kauffman Foundation also reported some problematic trends. Nationally, the proportion of new firms to all firms has been declining, and firm entry rates were lower between 2009 and 2011 compared to the period between 1978 and 1980. Boulder still enjoys significantly positive business news, as evidenced by recent figures from the Boulder Economic Council, and it was cited by the Foundation as a leading area for high-tech startup density. But as the recent Kauffman study shows, we still have to take positive steps to support entrepreneurs of all types.
A Critical Need: Creating Connections
What are some of those steps? In another recent analysis, the Kauffman Foundation prepared a case study on efforts in St. Louis to build a “startup ecosystem” that can be instructive. In short, they cited the importance of creating
- Connections Between Entrepreneurs
- Connections Between Support Organizations
- Connections Between Entrepreneurs and Key Support Organizations
- Miscellaneous Support Connections
At the risk of oversimplifying, the Kauffman Case Study sounded a lot like what Boulder has been creating and the importance of events like Esprit Entrepreneur. The case study pointed out a variety of important factors, such as formal and informal community organizations, university connections, and entrepreneurial-focused events.
Enter Esprit Entrepreneur. By creating critical connections between entrepreneurs and various sources of support, it can help nurture the collaborative environment long noted as a singular aspect of the Boulder economy. And this year, Esprit is going a step farther: actually providing funding for a startup through the Esprit Venture Challenge.
So Esprit Entrepreneur plays a critical role in supporting Boulder’s “startup ecosystem,” and that is why it has continued to meet with success year after year.