St. Louis startups are a key driver of new job growth across several industries in the St. Louis region, according to a new report published this week examining the region’s workforce.
St. Louis Community College’s annual State of the St. Louis Workforce Report finds that in 2021, St. Louis startups created nearly 15,000 new jobs, accounting for more than one-third of the new jobs created by startups in Missouri.
The report defines startups as first-time employers with fewer than 20 employees. While the report finds St. Louis has had an increase in new technology startups, companies that are often a focal point of the startup economy, it also details that the startups creating the most jobs locally are in other fields.
“Large corporations may grow and add jobs, but they are equally adept at creating efficiencies in their businesses with the goal of producing more with fewer resources. Startups are where the truly new jobs in an economy happen,” the report says.
The startup data is a new addition to the annual State of the St. Louis Workforce Report. While the figures provide a peek into the impact of startups locally on creating new jobs, the report’s data doesn’t fully encompass the greater St. Louis metropolitan area. St. Louis Community College’s report sourced current and historical startup information from Missouri statewide data analyzed by MoSourceLink, an entrepreneur support group that is part of the UMKC Innovation Center. That means it doesn’t include metro area counties located in Illinois and only includes the city of St. Louis and St. Louis, Franklin, Warren, Jefferson, Lincoln and St. Charles counties.
Within those boundaries, startups created 14,884 jobs in 2021, up slightly from 14,818 the prior year. Since 2015, the number of jobs created annually by startups has remained relatively consistent, ranging from 12,687 in 2016 to 17,503 in 2017. Within the past seven years, startups have created an average of 14,722 jobs per year.
As with the job figures, the number of new companies launched in the geographic area examined has remained steady. In 2021, 7,320 were created, compared with 7,399 in 2020. That’s up from 5,793 in 2015.
While startups are a consistent creator of new jobs, the State of the St. Louis Workforce report notes they are a “high-risk business,” with 55% of new businesses in Missouri having no employees after four years. Though, the report notes, the constant creation of new companies hiring for new roles offsets those job losses by failed ventures.
One area in which St. Louis has experienced growth in its entrepreneurial economy is within the technology sector. New technology startups created 540 jobs in 2021, up from 425 in 2020 and 310 in 2015.
While the number of jobs attached to new technology startups is growing locally, they remain a small sliver of roles created by new St. Louis firms. From 2015 to 2021, the sectors with the most creation from new companies included health care, food services and retail.
"The vast majority of startups in the St. Louis region are in traditional services and products that will grow and remain as the fabric of our community and neighborhoods,” the report said. “These businesses are founded by a broader demographic of entrepreneurs, including minorities and women, than tech and science startups. It is important that the region nurture all types of businesses to build jobs in all sectors."
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