Endeavor Detroit works to catalyze long-term economic growth by selecting, mentoring and accelerating the best high-impact entrepreneurs in Michigan. To grow the local entrepreneurial ecosystem, Endeavor has found that scaleups have the largest impact on both job creation and local economies. As featured in the 2020 Detroit Entrepreneurial Ecosystem Report and 2020 Ann Arbor Entrepreneurial Ecosystem Report, Diana Callaghan, Managing Director of Endeavor, describes the potential of accelerating entrepreneurs to create economic impact.
Guest Post by Diana M. Callaghan, Managing Director, Endeavor
While economic growth in Southeast Michigan has accelerated in recent years, the region continues to experience talent shortages, workforce development gaps, high job concentration in shrinking industries, and continued overdependence on automotive manufacturing. While small businesses and large business attraction strategies play critical roles in local economic development, the ability of each to dramatically improve job creation and economic growth is limited.
A Less Obvious Model for Progress.
A significant body of research demonstrates that US metropolitan areas with the greatest income and economic productivity growth generate more “scaleups.” Endeavor defines scaleups as locally owned, entrepreneur-led companies in high-value industries with 50 or more employees.
Supporting scaleups can transform economies.
A small number of scaleups employ more people and account for more job growth than any other of type of company. In fact, in 2018, 10% of the scaleup enterprises operating in Southeast Michigan created more than 74% of the jobs in the community.1
Supporting scaleups can transform communities.
Successful scaleups create new jobs that can spark opportunities for growth across sectors, fueling an engine of job creation that helps tackle unemployment in underserved communities. If Southeast Michigan could create 60 new scaleups, it would increase local GDP by over $5 billion annually. Additionally, earlier stage scaleups are more likely to hire diverse groups of people including those from low income communities, those without college degrees, or formerly unemployed individuals.2
Supporting scaleups has a multiplier effect.
Successful entrepreneurs who succeed in building scalable firms multiply their impact by reinvesting their financial, intellectual, and social capital into the next generation of entrepreneurs.3 This increases local access to funding, talent, and customers, the three most important resources for growing companies. When Endeavor mapped the tech ecosystem of its first affiliate in Buenos Aires, it found that over 20 years, three Endeavor Entrepreneurs influenced more than 80% of the ecosystem.
In 37 markets around the world, Endeavor promotes economic growth by selecting, mentoring, and accelerating entrepreneurs leading existing and future scaleup companies with the most potential to create economic impact. With the support of a global network of business leaders, Endeavor selects best-in-class entrepreneurs and provides customized services to help them scale their businesses. In partnership with Endeavor, these entrepreneurs have hired executive talent, secured major investment, worked with renowned global mentors and advisory boards, participated in advanced education programs at elite institutions, and grown critical business relationships.
Visit http://www.endeavor.org to learn more about Endeavor
Read more in the 2020 Ann Arbor Entrepreneurial Ecosystem Report and the 2020 Detroit Entrepreneurial Ecosystem Report
SOURCE: 1, 2 LEAH D. BARTO. MICHIGAN’S COMPETITIVE ADVANTAGES IN ENTREPRENEURSHIP: REGIONAL SOLUTIONS FOR CREATING A MORE DIVERSIFIED ECONOMY. ENDEAVOR INSIGHT (2019): 6, 10.; 3 RHETT MORRIS. FOSTERING PRODUCTIVE ENTREPRENEURSHIP COMMUNITIES. ENDEAVOR INSIGHT (2018)