JumpStart Has $75 Million Impact on Northeast Ohio

CLEVELAND, April 23 The investments and activities of JumpStart Inc., the Northeast Ohio venture development organization that accelerates the progress of high growth early-stage businesses, generated $75.7 million in economic output impact in 2008 in Northeast Ohio, according to a recent study conducted by the Center for Economic Development at Cleveland State University. This is a 29 percent increase from JumpStart’s 2007 impact of $58.5 million. The report also highlighted $8.3 million in taxes generated, 502 jobs created or retained, and $20.9 million in household income generated in 2008 due to the activities of the organization.

Economic impact is the estimate of the economic benefits an organization creates in a given region. JumpStart’s impact was calculated by using the jobs and operating budgets of Northeast Ohio companies receiving investment from JumpStart and North Coast Angel Fund, and those companies JumpStart critically supported in generating investment. JumpStart’s staff and operating budget were also included in the numbers. The report tallied three types of impact (direct, indirect and induced) to reach the final impact numbers. Direct impact refers to the initial value of the goods and services, including labor, purchased by a company. Indirect and induced impacts estimate the “ripple effect” that takes place throughout the economy as a result of the direct impact.

Of JumpStart’s $75.7 million economic output impact, $49.1 million was a direct impact of JumpStart investments and activities; JumpStart itself represented just six percent of the total impact.

This third annual report was the first to calculate and include JumpStart’s tax impact. Findings showed its investments and services to entrepreneurs resulted in state and local tax revenues of $3.3 million and federal tax revenues of $5.0 million in 2008.

“This statistic is a vital addition to JumpStart’s economic impact report,” said Dr. Ziona Austrian, Director of the Center of Economic Development at CSU and co-author of the study. “The work of JumpStart, which receives almost half of its funding from Federal and State government, is resulting in tax revenues going back to those sources.” JumpStart receives a significant portion of its government funding from Ohio Third Frontier, a statewide program committed to expanding Ohio’s technological strengths and promoting commercialization that leads to economic prosperity throughout Ohio.

According to the report, JumpStart’s activities created household earnings (labor impact) of $20.9 million, a 10 percent increase from 2007. The organization’s employment impact amounted to 502 jobs in 2008, 45 percent higher than 2007’s number. JumpStart’s own positions represented only seven percent of the total number of jobs.

“The increase of JumpStart’s impact in 2008 from 2007 shows that the entrepreneurial companies JumpStart serves are growing, creating jobs and generating more economic impact every year,” said Ray Leach, Chief Executive Officer of JumpStart. “The progress of each individual company is beginning to have a ripple effect that reaches the entire region. I am confident that with continued support for these companies, Northeast Ohio will continue its economic transformation to a thriving entrepreneurial economy of prosperous companies and citizens.”

JumpStart’s Economic Impact: 2006, 2007, and 2008

Impact               2006*          2007*           2008         2007-2008 Increase
Output       $42.8 million  $58.5 million  $75.7 million  $17.2 million,+29%        
Labor Income $15.1 million  $19.0 million  $20.9 million   $1.9 million,+10%
Employment        308 jobs       346 jobs       502 jobs       156 jobs,+45%

* For comparison purposes, JumpStart’s 2006 and 2007 output and income impacts were inflated to 2008 dollars.

About JumpStart Inc.

JumpStart (www.jumpstartinc.org) is a nationally recognized venture development organization that accelerates the progress of high potential, early-stage businesses and includes a special focus on diverse entrepreneurs working in the highest growth industries. Through the depth of its entrepreneurial team and the breadth of its high value resources, JumpStart improves client success in achieving significant milestones, including raising the follow-on capital necessary to create wealth. JumpStart strives to create a more prosperous future for Northeast Ohio. As part of its robust public/private partnership model, JumpStart recognizes the integral support of Ohio Third Frontier, which is committed to expanding Ohio’s technological strengths and promoting commercialization that leads to economic prosperity throughout Ohio.

About the Center for Economic Development at Cleveland State University

The Center for Economic Development at the Levin College of Urban Affairs at Cleveland State University conducts research and offers technical assistance on urban and regional economic issues of interest to local, state, and national policymakers. Primary focus areas include regional economic analysis, regional indicators, economic impact analysis, innovation and entrepreneurship, manufacturing competitiveness, and the role of urban universities in regional development.

Source: JumpStart Inc.