DURHAM – The second day of the NC IDEA Summit focused on how to “reset” ecosystems to optimize economic recovery. “Every community has the right to prosper in our economy,” said Thom Ruhe, NC IDEA’s CEO. “So today, we focus on how we reset. To help communities become economically dynamic and vibrant.”
Easier asked than answered – but there were plenty of ideas.
Ruhe welcomed Dell Gines, Ph.D., Senior Community Development Advisor of the Federal Reserve Bank of Kansas City, to discuss the keys to creating new opportunities in communities and in local economies.
It’s problematic that institutions and large organizations are using a narrow definition of ecosystems, said Gines, too often referring only to their own programs which, sadly, aren’t necessarily holistic in their approach.
“There are other factors that are often under-discussed, but are also a part of the ecosystem,” said Gines. “Culture, social capital, access to infrastructure and transit, these are all factors that have to work together in concert to move the whole system forward.”
The key, according to Gines, is taking a horizontal approach to systemic change, and to do so with empathy, not sympathy. “You can’t be all things to all people, but it is fundamental that you understand what is happening on the ground in local communities.”
For example, said Gines, an approach taken to reset and reimagine the entrepreneurial ecosystem in North Omaha would be dramatically different than the approach taken to boost or bolster the ecosystem in the entire Omaha region.
And the principle that leads that work, said Gines, is empathy. “If I am trying to support someone, I better understand what they’re going through and work to build solutions that will meet their needs.”
That’s the heart of ecosystem development—empathy, and local relationship building, whereby you reimagine or rebuild an ecosystem in collaboration, co-creating something new that wasn’t there before that opens opportunity and access for all.
Black Entrepreneurship: Optimizing Black Entrepreneurship Optimizes the American Economy
“When we talk about ecosystems, that’s an American thing, but the difference is that now we’re saying that it is a thing for all Americans, not just some Americans, and our work is to equalize access to entrepreneurship for all Americans,” said Gines. “We want to optimize ecosystems, inclusively, to optimize our economy.”
According to Gines, black women generated a million new businesses in the last decade, with an average annual revenue of $27,000. That’s the lowest amount of any demographic group of business owners, said Gines. “So think about if we’d created an ecosystem that changed that average to $37,000, and the economic impact that small change would have for local economies.”
We’re leaving productivity and economic wealth creation on the table, which has huge economic consequences for individuals and families, but also for our local economies and the American economy as a whole.
“The macroeconomic argument is that when you have an underperforming community, that harms the economic position of the entire system,” said Gines. “We need to optimize better the historic groups and communities that have been underrepresented in entrepreneurship.”
Gines is advocating that we need more black people in business. Beyond new business creation, said Gines, “I’ve said that every black household in America ought to have a business, even if it is a side business, because it’s got to become a part of the culture.”
For example, said Gines, almost no black people own manufacturing or wholesale businesses, which according to Gines, are the most likely businesses to generate revenue and generate new job creation. And in the field of technology, said Gines, where the industry is developing the next-level thinking about how our society will be structured, black people are too often left out of the conversation. Just look at the bias built into the development of facial recognition software, said Gines.
Fundamentally, by supporting black entrepreneurship, said Gines, black household wealth increases, which in turn improves economic outcomes for families and communities—no matter the demographic composition.