Fewer Kansas City companies are growing to become medium- or large-sized firms, according to a report released Thursday by the Ewing Marion Kauffman Foundation.
It’s a common story across the U.S., as the nation rebounds from the slump of the Great Recession, the report says. The 2017 Kauffman Index of Growth Entrepreneurship report suggests the culprit might be in today’s high-growth companies leveraging technology and hiring less.
“Our research indicates that high-growth firms, particularly of young firms, are important to job, output and productivity growth,” said Victor Hwang, vice president of entrepreneurship at the Kauffman Foundation in a release. “However, because businesses are creating fewer jobs, it’s more important than ever to empower people to control their own economic destinies.”
The report relies on three components: the rate of startup growth, the share of scaleups and the high-growth company density. The Kansas City metro received a No. 28 ranking in 2017, down from 23 in 2016.
The lower ranking is primarily because of the metro’s drop in startup growth and share of scaleups, both of which are measured by employment growth.
The Kansas City metro’s startup growth is at 34 percent, down from 54 percent in 2016. The report finds the region’s share of scaleups at 1.7 percent, down from 1.8 percent in 2016.
On the statewide level, Missouri is ranked No. 22 out of the 25 largest U.S. states, the same ranking the state nabbed in 2016. Kansas is down 3 slots from 2016, claiming a No. 8 ranking out of the 25 smallest states in 2017.
In 2017, Missouri’s rate of startup growth is 65 percent, with Kansas startups growing at a rate of 41 percent, according to the report.
To see the full report, click here.