Despite adding more than 7,000 startups and 46,000 lower-growth companies since 2007, southeast Michigan still hasn't recovered from the financial crisis, says a new report released today from Endeavor Insight.
The region's lagging unemployment rate (which has risen just 1 percent above its 2007 levels) can likely be attributed to a 50 percent decrease between 2007 and 2012 in high-growth companies — or those older than three years, with at least 20 percent annual employment growth over the last three years and at least 10 employees.
To help grow more scale-up firms throughout the region, the New York City-based nonprofit announced Monday that it will launch a Detroit office to spur local growth and economic development driven by high-impact entrepreneurship.
"Detroit right now is in an exciting period of reinvention and growth, driven by a rise in entrepreneurship," says Cindy Pasky, founder and CEO of Strategic Staffing Solutions, and board chairman for Endeavor Detroit. "Endeavor's unparalleled global network will equip the city's best entrepreneurs with the resources they need to aid with ushering in a new era for Detroit."
Scaleups are critical to a region's job creation, according the Endeavor report, which notes that the average high-growth company employs eight times as many people as the average lower-growth firm, and 35 times as many as the average startup.
Nationally, scaleup firms are responsible for most job creation, with the top 2 to 3 percent of fastest growing companies creating almost all new jobs. These jobs, in turn, tend to be higher quality, with more opportunities for professional advancement, and last longer than jobs at slower growing companies. Edeavor officials say.
To encourage job growth in southeast Michigan, Endeavor Detroit will help close the gap by searching out, selecting, and supporting scaleup companies.
"The entrepreneurial talent in Detroit and the broader region is impressive," says Linda Rottenberg, Endeavor's co-founder and CEO. "We're excited to support these companies to scale, stay and multiply their impact by investing, (while) mentoring and inspiring the next generation of local high-impact entrepreneurs."
A local board of business leaders will oversee endeavor Detroit. Pasky will be joined by Gerard M. Anderson, chairman and CEO of DTE Energy; Dave Egner, executive director of the New Economy Initiative and president and CEO of the Hudson-Webber Foundation; Thomas Groos, partner of City Light Capital; Nate Lowery, co-founder and CEO of TM3 Systems; Raj Vattikuti, founder of Altimetrik; and Steven A. White, chairman and CEO of Detroit Renewable Energy.
The managing director will be Antonio Luck, formerly director of business acceleration, entrepreneurship, and innovation at Michigan Economic Development Corp.
To read the full report, click here.