Equity

Entrepreneurial Ambition Wanes Among Nonwhite Students in US by Justin Bibb

By: Justin McCarthy and Justin Bibb
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STORY HIGHLIGHTS

  • 42% plan to start a business, down from 54% in 2011
  • 12-point drop among nonwhites; little change among whites
  • Entrepreneurial ambition remains flat nationally

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WASHINGTON, D.C. -- Entrepreneurial ambition has receded among racial and ethnic minority students in grades five through 12 in the U.S., according to the latest findings from the Gallup-HOPE Index. Though a majority of nonwhite students (54%) said in 2011 that they intended to start their own business, this figure fell to a new low of 42% in 2016.

 

These results are based on telephone surveys conducted Sept. 12-Nov. 7, 2016, with a nationally representative sample of 1,006 U.S. students in grades five to 12. While yearly fluctuations among nonwhite students may reflect smaller sample sizes among this group, the drop in entrepreneurial ambition between 2011 and 2016 is significant.

Nonwhite students' entrepreneurial ambition once outpaced white students' to a significant degree, but this edge has nearly evaporated. The 12-percentage-point drop since 2011 in the proportion of nonwhite students saying they plan to start a business puts them on par with white students. While nonwhite students have become less likely to have future business plans, white students' intentions have been steady over the past six years, between 37% and 40%.

However, nonwhite students (50%) remain somewhat more likely than white students (40%) to say they want to invent something that will change the world. This has been the case since the index began tracking the issue in 2011.

Less Than Half of U.S. Students Plan to Start a Business, Invent Something

Overall, about four in 10 U.S. students in grades five to 12 express the intent to start a business (41%). They are slightly more likely (45%) to say they will invent "something that changes the world." These figures have been fairly stable since 2011.

Bottom Line

Grooming the next generation of U.S. entrepreneurs is crucial to addressing the country's slowdown in GDP growth. Less than half of U.S. students in grades five to 12 plan to invent something revolutionary, and they are less likely to say they plan to start their own business.

Among minority students -- a group that once exuded entrepreneurial ambition -- intentions of starting a business sagged last year, whereas those among white students remained stable. Nonwhite students remain more likely to have plans of inventing something, which perhaps could draw out their erstwhile entrepreneurial spirit. The country's long-term economic competitiveness depends on maximizing entrepreneurial energy nationwide and addressing the decline in ambition among nonwhite students. Minority entrepreneurs already face unique challenges that, paired with reduced enthusiasm, could have a larger effect on U.S. entrepreneurship potential more broadly.

U.S. schools' approach to business education is critical to boosting entrepreneurial aspirations among students nationally, and the Gallup-HOPE Index highlights some key opportunities, such as internships and youth-run businesses, that are highly underused as a means of teaching business skills.

To learn more about the entrepreneurial aspirations and energy of U.S. students, read "The 2016 Gallup-HOPE Index: Quantifying the Economic Energy of America's Youth."

SURVEY METHODS

The 2016 Gallup-HOPE Index findings are based on results from a nationally representative telephone survey of 1,006 U.S. students in grades five through 12. Telephone interviews were conducted Sept. 12-Nov. 7, 2016. The sampling frame of this study came from the Gallup Daily tracking survey. The frame included respondents who had consented to be re-contacted and indicated that they had children younger than 18. These respondents were re-contacted and screened for school-aged children in grades five through 12 in the household. Permissions were then requested from qualified parents or guardians for their students in grades five through 12 to participate in the Operation HOPE survey. The frame was stratified by race/ethnicity, education and household income, and proportionate selection was used.

For results based on the total sample of students in grades five through 12 (n=1,006), one can say with 95% confidence that the margin of error is ±3.1 percentage points. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.

Learn more about how the Gallup-HOPE Index works.

Ensuring Cleveland's Future in 2015 & Beyond by Justin Bibb

By: Justin M. Bibb

Cleveland is at a critical crossroads. Over the past decade, the city has made tremendous strides in rebounding from the economic downturn that has plagued many post-industrial Midwest cities. More than $4.5bn has been invested in downtown Cleveland over the past five years. In addition, the city is emerging as a magnet for talent attraction as it has experienced a 68% increase in the number of 25-34 year old college graduates since 2006. Yet despite these promising changes, Cleveland faces huge challenges.

According to the Federal Reserve, the city has lost 40% of its population since the 1970s, and recent data from the U.S. Census shows that 34% of residents live in poverty. The city also has a massive skills gap. Currently, 66% of residents are functionally illiterate (having math, reading, or language skills below a 4th grade level); and some neighborhoods have a 95% illiteracy rate. Even more alarming is the fact, that Cleveland is still considered one of the most segregated cities in America with 55% of its population living in homogeneous zip codes.

These challenges will be even more compounded as major demographic shifts, falling revenues, and rising citizen demands have placed an unprecedented amount of pressure on the public sector.

So how can the city address these challenges to be competitive over the next 50 years?

The answer lies in adopting a new model of urban transformation focused on entrepreneurship, equity, and engagement:

Entrepreneurship in the classical sense is most commonly thought of as the process of starting a business or creating a product that generates economic value. Yet, what is often overlooked is the notion of entrepreneurship as a mindset. Entrepreneurs are resilient in the midst of failure. Entrepreneurs have the ability to exploit a perceived weakness as an opportunity. In nowhere is this mindset needed more than in municipal governments. Applying an entrepreneurial mindset to the challenges cities face will lead to policies and an urban service delivery model that is more user-oriented, efficient, and solution-oriented than one focused solely on politics.

Equity must be one of the main criterion for how we view public policy if cities such as Cleveland are to truly thrive. Fundamental to instituting an equity lens into urban revitalization efforts is the collective understanding, buy-in, and support of those impacted most severely by the conditions that have led to the vast socio-economic disparities undermining many American cities. To not meaningfully involve and engage diverse groups in regional and local change models that seek to impact their current and future wellbeing is to marginalize their assets and perpetuate the existing negative outcomes that persist.

Engagement is the last but the most essential element to this new model of urban transformation. Trust in government is at an all-time historical low and many residents living in the urban core feel the social contract between city leaders and citizens is broken. But, by leveraging civic tech and open data tools, governments now have the opportunity to engage residents in community decision-making processes by using publicly-held, trusted, and easily-accessible data to create solutions in their own communities. Encouraging citizens to be more engaged in the policymaking process also promotes high levels of trust and social capital, thereby impacting a city’s bottom line and promoting innovation.

Nonetheless, this new model of urban transformation represents a new playbook for Cleveland, and cities alike, to truly be competitive. It is my hope that 2015 can be known as the beginning of a new era where entrepreneurial, inclusive, and highly-engaged cities become the rule not the exception.

The Millennial City, Part 3: The Gentrification Reset by Justin Bibb

By: Justin M. Bibb & Ian T. Brown

The Debate

Your city is on the hot seat now. As a city leader you have done your job to bring new energy and vibrancy to dilapidated neighborhoods. Young people have moved downtown. Artisans from across the world have begun to rejuvenate your artistic class. There is a new sense of momentum, but the promise of a true urban renaissance has been complicated by notions of gentrification.

The gentrification debate in America evokes a myriad of impassioned opinions.  Supporters of gentrification argue that developing those neighborhoods that are desirable to middle- and higher-income residents improves a city’s bottom line by creating a stronger tax base, higher property values, and better public services.  Meanwhile opponents argue that gentrification only pushes the poor and working class out, further exacerbating the gap between the haves and the have nots.  Neither side is wrong.  In fact, both are right.  But the issue lies in the fact that we are having the wrong debate. We need to hit the reset button on the issue of gentrification and shift our attention to equity.

The Equity Challenge

Demographic trends facing the United States create a compelling value proposition for cities to adopt an equity framework. According to recent research from the U.S. Census Bureau, more Americans are living in cities now than a decade ago, and much of that urban population is becoming increasingly diverse, both racially and economically.  Yet for far too long, city leaders have failed to recognize how to harness the value of this diversity.  As Richard Florida asserts, “the evidence is mounting that geographical openness and cultural diversity and tolerance are not by-products but key drivers of economic progress.”  However, today too many people are being left out of the urban city success story.

An inclusive economy is imperative for America to remain competitive in the 21st century; yet, significant gaps remain in education, employment, and health among communities of color. For example, 45% percent of all jobs in 2018 are projected to require at least an associate’s degree, but today only 27% of African Americans, 26% of U.S.-born Latinos, and 14% of Latino immigrants have achieved this level of education.  Even more startling is the drastic wealth gap that exists among minorities.  As research from the Center for Global Policy Solutions found, the average African American household owns just 6 cents for every $1 of wealth held by the typical white household.  For Latinos, the average figure is 7 cents; which represents an increase of 1 cent for each group between 2009 and 2011. U.S. cities can’t succeed if we don’t find a way to leverage its people to help close these gaps.

The Millennial Call to Action

As the fastest growing demographic group flocking to the urban core, Millennials are in a prime position to help bring about an equity framework to how we think about revitalizing cities.  The Millennial generation is racially diverse, politically independent, and more optimistic about the future than their peers.  Millennials want to use their talents to bring about change, as 97% prefer using their individual skills to help a cause.  Armed with these beliefs, the DNA of the Millennial Generation is uniquely wired to understand the value proposition of advancing an equity agenda for cities.

From education reform to job creation, the Millennial blueprint for advancing an equity agenda has the potential to revitalize the urban core in a meaningful way.  Enacting such an agenda, however, requires greater buy-in from city leaders to engage Millennials in the policy-making process.  In addition, Millennial urbanites must act as good neighbors and step out of their comfort zone to engage diverse groups, especially those from underserved minority communities.  To not meaningfully involve and engage diverse groups in local change models that seek to impact their current and future wellbeing is to marginalize their assets and perpetuate the existing negative outcomes that persist.

Kansas City: A Model of Best Practice

One city in particular has already begun to show Millennials how to build a broad coalition to create an equity agenda.  In Kansas City, local leaders began to recognize that empowering communities of color was essential to help the city tackle stagnant wages and rising inequality.  Between 1980 and 2010, the minority population of the city increased from 16% to 27%, and that number is expected to increase by another 10% by 2040.  Alongside these trends, the city also witnessed rising gaps in critical health and education outcomes among this growing demographic.  Forty percent of those living in poverty in Kansas City live in the urban core, where a majority of residents are minorities.  Additionally, Kansas City ranks 78th in the country for the number of youth who have dropped out of school and are unemployed, with a disproportionate number begin black and Latino.

Recognizing the need to address these issues of equity, the Greater Kansas City Community Foundation launched the Kansas City Digital Inclusion fund to provide new technology and education to help areas with high unemployment get the tools and training they need to succeed.  Through this fund, grantees from local churches, community development organizations, and young entrepreneurs are closing the digital divide to advance economic prosperity.  To help close the minority achievement gap, the Kauffman Foundation launched the Ewing Marion Kauffman Schoolto give urban Kansas City Students the skills to succeed in college, work, and life in the 21st century.  By recruiting young, high-performing teachers and incorporating a curriculum focused on training the next generation of entrepreneurs, the school has yielded significant academic growth in Reading, Math, and Science.

Accepting the Challenge

As Kansas City and other U.S. cities have shown, building a coalition of broad stakeholders to address issues of equity is obtainable.  Once cities have developed innovative strategies to attract and retain Millennials, it becomes our responsibility to make the community better for all, not just a segment of the population. Our generation has the skills, resources, and entrepreneurial energy to make the economic promise of the American city real for everyone.  Let’s do our job, and put in the necessary work to restore that grand bargain.