How To Create New Jobs And Build Thriving Innovative Communities?
Creating new jobs is always an important topic, but more so today than in the recent past, given the high unemployment rate resulting from COVID-19. Martin Babinec's book More Good Jobs: An Entrepreneur's Action Plan to Create Change in Your Community could not have come out at a better time. Babinec is an entrepreneur and startup investor who has built startup ecosystems across Upstate New York and the Caribbean.
Babinec is an entrepreneur through and through. He contends that the government does not create jobs; entrepreneurs do. Instead of relying on politicians to solve community problems, individuals can transform their communities. Babinec, who lives in Upstate New York but spent many years in the Silicon Valley, observes: "the difference between growth and decline isn't government policy or regional planning but instead how each area evolved with regards to whether the community embraces or ignores innovators that actually create companies and jobs."
Transforming a community into a place of innovation, where good jobs are generated, is an incremental process. It requires a handful of individuals who are committed to creating a culture of innovation in their community. Within such an environment, new entrepreneurs can succeed.
Creating good jobs is not merely advantageous for individuals who get to have those jobs. They are also valuable for the community. The income earned by the families gets spent locally, benefiting local businesses, and creating more good jobs as a result. The economy, to a significant extent, is a network of jobs.
What are good jobs? Professor Zeynep Ton provided a very specific description of a good job in her book The Good Jobs Strategy: How the Smartest Companies Invest in Employees to Lower Costs and Boost Profits. These are the jobs that offer fair compensation, a stable schedule, career path, security and safety, a sense of belonging and achievement, recognition, meaningfulness, and a place of personal growth.
Babinec's description of a good job is more high-level and subjective. If a person wants the job instead of simply enduring it, then it is a good job. Good jobs benefit the company doing the hiring and the community at large. For example, tech jobs or "innovation economy jobs," as Babinec calls them, have benefited companies and communities and led to larger positive demographic changes in Silicon Valley, New York City, Boulder, Colorado, and Austin, Texas.
Babinec defines an innovation economy company as "a business whose product or service is based on an innovation not yet widely adopted, but with the intent of growing toward a national or global audience." Innovation does not have to mean a major technological breakthrough. It can be a simple, innovative solution that addresses a market need. However, the critical part of what innovation economy companies do is deploying their products and services to a broader audience beyond their local customer base.
Babinec cites research showing that for every job created by an innovation economy company, five other jobs get created in the local economy. That is a 5 to 1 job multiplier, which is a remarkable phenomenon. For comparison, manufacturing produced a 1.6x job multiplier.
Cities with the highest number of innovation economy jobs develop more innovation economy jobs. These cities also have more opportunities and attract more companies. Innovation economy companies create a virtuous cycle in which future leaders go on to start their own businesses.
With that background in mind, Babinec demonstrates that to create good jobs, we should focus on increasing the number of innovation economy companies in our communities. As Babinec summarizes, "entrepreneurship tends to breed more entrepreneurship, and startup teams develop employees in a context to gain financial stability, understanding, and experience to be prepared to start and grow their own businesses. Successful businesses within a community beget more successful businesses, so any work we do to increase the success of local entrepreneurs will give us more than our money's worth of results."
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