Revising our Jobs Data Upward
I’ve been diving into the data we’ve collected on Atlantic Canadian startups, and one thing that’s become clear is that we underestimated job creation by startups in 2014.
Earlier this year, we reported that the results of our most recent survey showed that employment at Atlantic Canadian startups rose 9.4 per cent, while revenues rose 36.5 per cent. It’s becoming clear we underestimated things on the jobs front. So we’re restating our data to say that the number of people working for Atlantic Canadian startups rose 14.3 per cent in 2014.
Here’s what happened, from the beginning. At Entrevestor, we try to provide metrics on the Atlantic Canadian startup community each year. It brings depth to our reporting, and the sale of data analytics reports helps to finance our operation. We identified 287 startups that were going concerns on Dec. 31, 2014, surveyed as many as possible and received responses from 152.
The result of those surveys showed a 9.4 per cent increase in employment by the startups.
In the months since we published those findings, we’ve been examining the numbers in more depth. There are a lot of companies that didn’t respond to the survey that we have information on through interviews, their websites or through third parties.
Using this broader data set, we found there were 2,473 people working for Atlantic Canadian startups at the end of last year. We counted part-time jobs as half a position.
That’s up 14.3 per cent from 2,164 a year earlier.
This is the best estimate available, though I’m the first to admit that the hiring, firing and contracting out by startups make it difficult to have precise numbers at any point in time. What’s important is that in broad trends, we’re seeing a robust growth in employment by innovative companies.
The findings of our research show that 90 per cent of the jobs created by these startups are held by Atlantic Canadians. These companies require specialized personnel and/or sales people based in their target markets, so one in 10 hires takes place outside the region.
As was the case a year ago, we found that startups pay well. There were 81 startups that shared payroll data. We only included those with annual payroll of more than $40,000.
These companies employed 762 people and had a total payroll of $45.7 million. That means that jobs with startups in Atlantic Canada pay $59,974 on average.
The speed with which startups can create jobs is quite astonishing. There were 91 created last year by companies formed in 2014. About one-third of the jobs were created by companies less than five years old.
The problem examining startups as engines for job creation is that the employment tends to be created where it’s needed least. We found that 108 jobs — about four per cent of the total — were generated by companies based outside the urban areas in the region: Halifax, Sydney, Fredericton, Moncton, Saint John, Charlottetown and St. John’s.
The only other shortcoming of highlighting startups as job producers is that they tend to employ a narrow range of people: highly educated with technical or business expertise. But overall, these numbers demonstrate the wisdom of using startups as a cornerstone of economic development.