The impact of startup businesses on job creation in Fort Worth is substantial, according to a new report, and in five years new businesses created more than three times the new jobs that the much-vaunted Amazon HQ2 relocation was projected to bring to the area.
Those are just a few of the key findings from new research released by Sparkyard, a free resource to connect entrepreneurs to resources in the area. The research was funded by The University of North Texas Health Science Center (HSC) at Fort Worth.
The Fall 2020 Jobs Report says that new companies — defined as businesses zero to 1 year old — created 25,157 jobs in 2018 and more than 25,000 jobs in Tarrant County every year from 2013 to 2018, according to the report.
In total, startups created 155,307 new jobs from 2013 to 2018, . more than three times as many jobs that the aforementioned Amazon HQ2 relocation was projected to bring to the area.
The report is first-of-its-kind research in Texas and represents a new way to show the impact that new firms have on job creation in our local economy.
“As our economy recovers from the effects of the pandemic, this research shows that additional resources should be provided to encourage more job creation in this important but underappreciated segment of our local economy,” said HSC President Dr. Michael Williams.
During a speech to attendees at the Global Entrepreneurship Week Fort Worth on Nov. 17, Williams said the study shows the impact of entrepreneurs and startups in the area but it also highlighted some issues.
While Fort Worth is now the 13th largest city in terms of population, we rank 40th in startup funding. “Fort Worth has some work to do,” he said. “We’re going to have to think differently and take some risks,” he said.
Cameron Cushman, HSC’s Associate Vice President of Innovation Ecosystems, said the study was the first to establish data measuring the impact startups have on job creation in Tarrant County.
“The data clearly shows that innovation and entrepreneurship are crucial to sparking job creation in Tarrant County,” Cushman said. “This is information that policymakers and economic development leaders can use to make decisions about where to allocate resources as we continue to grow and strengthen our local economy. If our local startups are already creating this many jobs each year, many more jobs could be created by new companies if we invested more in resources to support them.”
HSC created Sparkyard in collaboration with Texas Christian University Neely School of Business and the City of Fort Worth. The research was based on Quarterly Workforce Indicators (QWI) from the US Census Department and tracked unemployment insurance claims by new companies as proxy for job creation.
Among the Tarrant County report’s findings:
• The 25,157 jobs created by new companies in 2018 represented almost 10 percent of all new jobs created.
• Tarrant ranks second in North Texas in job creation by new businesses and fourth among large Texas counties.
• Job creation trends by new businesses largely followed the demographics of Fort Worth, both by age and level of educational attainment, meaning that these new jobs were evenly filled across industry and educational level.
- Tarrant County ranks second behind Dallas County in the number of new business creation in North Texas and third statewide, behind Harris County. Harris County created 63,588 new business jobs in 2018, while Dallas County created 43,108 new business jobs in 2018.
- The industries creating these jobs were led by accommodation and food service (6,654 jobs); health care and social assistance (3,518 jobs); construction (2,150 jobs); and retail, trade (2,141 jobs). Varies other services and industries filled in the rest.
The 2020 Jobs Report is just the first step in examining startups’ impact on job creation in Tarrant County, Cushman said. To better understand that relationship,the research team is pursuing Quarterly Census on Employment and Wages (QCEW) data from the Texas Workforce Commission for a future study that would offer greater detail. Additional data will provide the opportunity to understand the dynamism that entrepreneurial activity plays in job creation at a much deeper level.
During his speech to attendees at GEW Fort Worth, HSC’s Williams said there have been some key developments for Fort Worth entrepreneurs.
In June, Fort Worth approved a nearly $70 million grant for Linear Labs, an innovative electric motor systems company, for a manufacturing and R&D facility that should create about 3,000 jobs. In September, biotech company Eyevance Pharmaceuticals was acquired for $225 million.