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Coinciding with the launch of Endeavor’s Detroit affiliate, Endeavor Insight has released a report focused on the important role scaleup firms play in growing Southeast Michigan’s economy. The report, Filling the Scaleup Gap: How high-growth companies solve unemployment in Southeast Michigan is the first of two Insight studies identifying the decline of fast-growing firms and assessing policies and programs to solve it. The report highlights several important trends affecting Southeast Michigan:
1. Southeast Michigan hasn’t recovered from the financial crisis: Southeast Michigan unemployment is nearly 1% above 2007 levels and lags unemployment rates in peer metropolitan areas (Cleveland, Pittsburgh, etc.) by nearly 2%.
2. Southeast Michigan suffers from a scaleup gap: The number of Southeast Michigan high-growth companies (companies older than three years with at least 20% annual employment growth over the last three years and at least 10 employees) has declined by 50% between 2007 and 2012. Despite adding 7,000 startups and 49,000 lower-growth companies–a 27% increase in the number of companies since 2007–the region continues to suffer from high unemployment.
3. Southeast Michigan scaleups are the engines of sustainable job-growth: The average high-growth company employs 25 times as many people as the average lower-growth firm, and 76 times as many as the average startup. High-growth firms created 94 jobs, on average, between 2007 and 2012, while startups created just two Lower-growth firms barely registered. On average, they did not create a single full-time job. Scaleups are also more durable than other types of companies. Firms with at least one high-growth period between 1990 and 2012 survived twice as long as those that never experienced high growth.
Endeavor Detroit will help close this gap by searching out, selecting, and supporting scaleup companies throughout Southeast Michigan. It will close the scaleup gap, creating new high-quality jobs for a region that helped create some of the most enduring companies of the 20th century.
Read the report below or download it by clicking here.
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