Welcome back to our in-depth series on early stage startup acceleration. If you missed it, you can find the first part here, second part here, and the third part here.
Papaya Global Cofounder Eynat Guez told the World Economic Forum technology startups are more than catalysts for growth. They are the engine of growth itself. They solve problems no other sector is addressing with innovative thinking, thus pushing society forward – all while creating jobs, stimulating the economy, and attracting foreign investment. Through its companies and startups, one of the goals for URBAN-X is improving cities by creating full time jobs and sustainable income.
3,500 direct, indirect, and induced jobs have been created over the course of the last 6 years of our work – not sure what those categories mean?
We’ll break it down:
Direct: jobs and compensation immediately associated with URBAN-X companies.
A startup can hire multiple employees in different job sectors (engineering, marketing, finance, etc) after receiving more funding and investments. Direct impact.
Indirect: jobs and compensation created at supply of URBAN-X companies by company spending and investments.
Now that the startup has more employees, buying more coffee for the office will likely become a regular expense. A local favorite coffee shop is a no-brainer for the team – that coffee shop is now receiving regular compensation from the startup and can now afford to hire more full time employees. Indirect impacts.
Induced: jobs and compensation created by spending by employee households as a result of direct and indirect activities.
The new full time employee at the local coffee shop can now use some of their income to support a nearby local pottery shop or buy produce from the weekly farmer’s market. Induced impacts.
Our startup x coffee shop story is just one example of what’s possible when one company begins to succeed.
In addition to the 3,500 jobs created, URBAN-X has generated $350M in direct, indirect, and annual compensation. On average, each company spurs $3.5M in direct, $1.3M in indirect, and $2.0M in induced compensation impacts. Success and economic growth does not stop at just the startup in focus – wealth and progress can spread and create critical impact for surrounding communities across the country.
We’re not done with the examples just yet –
Circuit (Cohort 05) provides access to on-demand, easy-to-use, free (or low-cost) electric shuttles in dense communities. It works with cities and companies to provide affordable options to reduce congestion, enhance mobility options, and lower emissions. This micro-transit company manages its own fleet of 100% electric shuttles, helping to ensure sustainability and quality control and to create jobs.
Through the support of URBAN-X and MINI and the investment they facilitated, Circuit has been able to grow significantly. When Circuit entered URBAN-X it had 85 employees; today it has more than 300. In 2021 alone, Circuit almost doubled its size and created 120 full-time, family-sustaining jobs that include benefits and many of which do not require a college degree. Companies such as Uber also create jobs to help generate the economy but drivers are independent contractors with little benefits. Sustainable incomes and security for employees and their families should be available to all candidates.
URBAN-X is proud of the impacts made through our diverse portfolio of startups. Chief Executive Office and Co-Founder of H1, Ariel Katz said it best when he told the World Economic Forum startups don’t just create jobs from that company but the most successful startups give hope, create community, and build the future. Here at URBAN-X, we couldn’t agree more. Our startups have already proved to drive wide reaching economic growth, support families from all backgrounds, and make for a more climate conscious world.
In the next article of this series, we will focus on the environmental and social impact of URBAN-X’s startups.
Data collection, evaluation, projections, and figures by HR&A Advisors and Autocase. Text by Emily Ehle. Graphic Design by Zihao Wang. Photography by Zack DeZon.