https://www.kauffman.org/ We have a rare opportunity at hand. With the passage of the $ 1.2 trillion bipartisan infrastructure deal and the upcoming Build Back Better Social Spending Act, communities have an opportunity to think beyond the short-term aid needed and truly “rebuild” the American economy. However, this requires more than just physical infrastructure projects as we also need to strengthen our human capital infrastructure.
Perhaps the biggest problem America faces is economic insecurity and the wealth and income disparities of race, gender, and geography. While redistributive measures can help in the short term, we need to focus more on creating a prepared workforce and making entrepreneurship a national political priority beyond Entrepreneurship Month in November.
Healthy entrepreneurship ecosystems lead to prosperity, job growth and generally healthy communities. While our economy and headlines seem to be dominated by booming technology-based startups from Silicon Valley heading for IPO and unicorn status, we don’t have enough of them right now, especially those founded by Color entrepreneurs.
New businesses, large and small, bring new ideas and efficiencies to market and create jobs. At the Kauffman Foundation, where I serve as CEO, our research shows that companies over 10 years old, on average, are shedding about as many jobs as they are adding, which explains why areas that are on older, existing industries rely on continual struggle. Almost all of the net job growth – that is, more new jobs than lost – comes from younger companies in the start-up or early growth phase.
Yet per capita birth rates in the US have been falling or stagnating for the last 40 years. The upswing in 2020 is partly due to people starting businesses out of necessity due to job losses during the pandemic. If we dig deeper into the statistics, we can see that the entrepreneurship gap is largest for certain demographics. Geographically, in many parts of the Heartland – the middle of the country – as well as in small towns and rural areas, we find a delay in starting a business. The same goes for color entrepreneurs. In terms of gender, women lag behind men in terms of both the per capita start-up rate and the size of their startups.
The best way to achieve equity in entrepreneurship and wealth creation is to break down historical barriers that keep underserved communities across the country, from small towns in the Midwest and rural areas to neighborhoods in our big cities, from to start and maintain a business. In response, a coalition of nearly 200 organizations have come together to create the policies necessary to provide access to the opportunity, funding, knowledge and support needed to grow new businesses.
In addition to supporting entrepreneurship, employers – not just the CEO, but the HR department as well – need to adjust hiring practices that prioritize equity and look for credentials and skills, not just four-year degrees. To support our short-term job crisis and help new businesses hunt for talent, we need more investment in accessible programs that help adults retrain or upgrade with in-demand skills for growing sectors, such as we see through community colleges and employee training Centers across the country. The job market is changing and we need to prepare our workforce for it.
In the longer term, we need to rethink our education system. A recent survey found that all students across the country would benefit more from learning “essential” skills such as communication, problem solving and financial literacy, as well as having access to internships and projects with employers than preparing students for standardized tests. These programs help provide the essential skills and experience to succeed after high school, whether it be to attend four year university, earn a degree, start a business, or find a job. This focus on real world learning needs to be better integrated into our high schools and middle schools if we are to encourage students to do 21. to acceptNS Century career paths.
Now is the time for policymakers and employers to address the needs of potential entrepreneurs and our workforce, especially from underserved communities and the middle of the country, to fill the wealth / income gaps. We have the chance to transform a splintered, fragmented nation into a united society and develop an economy that fires on all cylinders and works for all. Let’s take this chance.