As investment in healthcare continues a meteoric rise, a jobs report from the National Venture Capital Association, Venture Forward and the University of North Carolina Kenan Institute of Private Enterprise shows that robust employment at venture-backed companies has grown 990% in the 30-year period between 1990-2020. That’s a stark contrast with the total private sector, for which employment rose 40% between January 1990 and February 2020, according to the report.
Although 73% of VC investment in companies tends to go to California, Massachusetts, and New York, the majority of jobs at these businesses, 62%, are outside of the traditional VC hubs of Silicon Valley, Boston and New York City.
Additionally, the rate of job growth at venture-backed businesses was impressive. The annualized growth rate of employment at VC-backed companies across the 67,000 companies in NVCA’s dataset between 1990 and 2020 is 8.2%. It’s well past the growth rate of total private sector employment (as provided by the Bureau of Labor Statistics) between January 1990 and February 2020 at 1.1%.
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To capitalize on that job growth, NVCA has urged Democrat and Republican leaders on Capitol Hill to create a visa for foreign-born entrepreneurs as part of a letter championing U.S. Rep. Zoe Lofgren’s (D-CA) Let Immigrants Kickstart Employment (LIKE) Act of 2021.
The legislation would allow the world’s most talented entrepreneurs to launch new companies in the U.S. and employ Americans. Immigration is a key component to job creation, according to NVCA.
“Immigrants are critical to U.S. economic success and innovation. Foreign-born entrepreneurs play a key role in the creation of high-growth startups,” the letter said. “Research shows that immigrants are twice as likely as native-born Americans to start a new business. Though just 14 percent of the population, immigrants account for a quarter of all business owners – with even higher rates among high-tech startups.”
At a local level, universities play a major role in regional job growth as a source of technological innovation and skilled workers, noted Greg Brown, Executive Director of the Frank Hawkins Kenan Institute of Private Enterprise at University of North Carolina, in an emailed response to questions. He also pointed out that state programs and policies across the country develop sources of seed funding for entrepreneurs.
Earlier this year, lawmakers approved nearly $10 billion to be block-granted to the states, as part of the State Small Business Credit Initiative (SSBCI) to give states additional capital resources for their ecosystems, according to Bobby Franklin, NVCA CEO.
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