• Publications
    • Essay
    • Case Study
    • Policy Study
    • Report
    • Testimony
    • Other
    • Newsletter
  • Blog
    • Daily Blog
    • Podcasts and Radio
    • Video
    • Infographics
    • Commentary / Op-Eds
    • Events
  • Events
  • Donate
  • About
    • Our Team
    • Show-Me Institute Board of Directors
    • Fellows and Scholars
    • Our Authors
    • Jobs
  • Contact
  • Explore Topics
    • Education
      • Accountability
      • Education Finance
      • Performance
      • School Choice
    • Health Care
      • Free-Market Reform
      • Medicaid
    • Corporate Welfare
      • Special Taxing Districts
      • Subsidies
      • Tax Credits
    • Labor
      • Government Unions
      • Public Pensions
    • State and Local Government
      • Budget and Spending
      • Courts
      • Criminal Justice
      • Municipal Policy
      • Property Rights
      • Transparency
      • Transportation
    • Economy
      • Business Climate
      • Energy
      • Minimum Wage
      • Privatization
      • Regulation
      • Taxes
      • Welfare
      • Workforce
Show Me InstituteShow Me Institute
Show Me InstituteShow Me Institute
Support the Show-Me Institute
  • Publications
    • Essay
    • Case Study
    • Policy Study
    • Report
    • Testimony
    • Other
    • Newsletter
  • Blog
    • Daily Blog
    • Podcasts and Radio
    • Video
    • Infographics
    • Commentary / Op-Eds
    • Events
  • Events
  • Donate
  • About
    • Our Team
    • Show-Me Institute Board of Directors
    • Fellows and Scholars
    • Our Authors
    • Jobs
  • Contact
  • Explore Topics
    • Education
      • Accountability
      • Education Finance
      • Performance
      • School Choice
    • Health Care
      • Free-Market Reform
      • Medicaid
    • Corporate Welfare
      • Special Taxing Districts
      • Subsidies
      • Tax Credits
    • Labor
      • Government Unions
      • Public Pensions
    • State and Local Government
      • Budget and Spending
      • Courts
      • Criminal Justice
      • Municipal Policy
      • Property Rights
      • Transparency
      • Transportation
    • Economy
      • Business Climate
      • Energy
      • Minimum Wage
      • Privatization
      • Regulation
      • Taxes
      • Welfare
      • Workforce
Economy / Business Climate

Entrepreneurship in Missouri, Part 2: Where Is the Job Growth?

By Michael Austin on Sep 26, 2016

A week ago I wrote of the decline of entrepreneurial activity in the nation, Missouri, Kansas City, MO, and Saint Louis, MO. The share of workers in firms aged five years or less has steadily dropped in the U.S. and Missouri. However, the rate in Missouri has fallen faster than the national average since 2001.

Why are there a smaller percentage of workers in startups, considering the state is at a new record high level for the number of non-farm jobs? Data suggest that Missouri startups are taking less of that job growth pie than they did before. Since 1995 to 2015, job growth from startups was near 72% of all job growth in the state of Missouri. If we look at this 20-year performance as a “normal” share of job growth from startups, then seeing a startup share at 62.5% should come as a disappointment. Of course, growing shares of workers in large, established firms can also spur growth. However, there are specific advantages that startups bring to a region that can be more difficult for established firms to provide. For example, research has shown that increased prevalence of startups can bring more innovation through increased competition (pp. 2–3) , allow for better adoption of new information, can create new industries (pp. 328–330), and improve labor productivity.  The graph below lists the share of startup job growth of Missouri, its metropolitan statistical areas (MSAs), and non-MSA portion relative to its 20-year average.

From the graph, we observe that Missouri currently runs below its 20-year average by more than 9 percentage points. Unfortunately, this statewide drop comes from underperformance in nearly every population center; with strongest losses coming from Kansas City, Joplin, and Saint Joseph. 

Interestingly, two of those three MSAs include areas in both Missouri and Kansas, a state that improved its tax climate by lowering individual income taxes by 30% for its residents and eliminating income taxes for personal businesses. The Saint Louis metro area shares a border with Illinois, a state suffering from population loss and which hiked corporate income taxe levels from 2011 to 2015 to more than 3 percentage points above Missouri’s.  A look at the Kansas side of the KC Area shows that it also underperformed its long-run growth, albeit by a smaller margin. In the Saint Joseph area, the Kansas side is currently exceeding its long-run trend and is seeing exceptional growth. There is good news however; the Missouri side of the Saint Louis area is outperforming the Illinois side.

What factors entice entrepreneurs to move or start their business in a new area? Could it be overall migration flows, or how cheap it is in an area to start and grow a business? Part 3 of my “Entrepreneurship in Missouri” will review a study published by the Brookings Institution that may shed some light on reasons as to why entrepreneurship is falling. 

  • Share
  • Tweet
  • Share
  • Email
  • Print
About the author

Michael Austin

More about this author >
Footer Logo
Support the Show-Me-Institute
Showmeinstitute.org is brought to you by Show-Me Institute and Show-Me Opportunity.
  • Publications
  • Blog
  • Events
  • Donate
  • About
  • Contact

Reprint permission for Show-Me Institute publications and commentaries is hereby granted, provided that proper credit is given to the author. We request, but do not require, that those who reprint our material notify us of publication for our records: [email protected]

Mission Statement
Advancing liberty with responsibility by promoting market solutions for Missouri public policy.

© Copyright 2023 All Rights Reserved