I had a meeting with Ben Hecht, the head of Living Cities several months ago. He regularly communes with the leaders of major foundations, and he described what's on most of their minds as this problem: "In less than 30 years, the majority of the U.S. population will be non-white. And at that point, if current trends hold, the new majority will have lower rates of income, wealth, education, political participation and physical freedom than the minority." Translation: We're heading to systemic inequality along, of all things, racial lines.
Wow. I hadn't thought of it before that conversation, but since then it's been impossible to forget. It's the kind of thing that prompts major business leaders to want to start a dialogue on race. One likes to think of America as the land of equality and opportunity. But we're heading in the opposite direction. And the problem isn't fixing itself. The recent violence in Baltimore and the debate around the composition of police forces and leadership in communities are an early sign of an issue that will only gain in force and immediacy.
I didn't think too much about this when I started Venture for America four years ago. My motivation was that we needed more of our top people starting businesses to counteract low rates of business formation (yes, despite the hype around tech, rates of new business formation are at multi-decade lows, which I thought was a major economic disaster). The needs were particularly pressing in Detroit, Baltimore, New Orleans and other cities. I believed that if you start a successful company, jobs get created in the economy for both skilled and unskilled workers. In his book The New Geography of Jobs, economist Enrico Moretti argues that every new information sector position creates between 2 to 5 additional jobs from bartenders, babysitters, and landscapers to teachers and nurses. If we create enough new companies, there will be additional opportunities for people at every rung of the educational ladder.
While running Venture for America, it's become clearer to me that the structural impediments around women and underrepresented minorities starting businesses are significant. Starting a successful company is one of the hardest things anyone does. If you start with less money, have fewer investors who see you as investable, have fewer role models and mentors, and have more people in your family relying upon you, founding a company is that much more daunting and unrealistic. The image of entrepreneurship as the province of the unprivileged and un-entitled -- the Horatio Alger, rags to riches myth -- flies in the face of reality. Many of the scrappy young people I meet who are the first in their family to go to college feel that they have to bring home a steady paycheck to make their family's sacrifices worthwhile.
The dynamics of our economy today are such that the advantages of financial capital, social capital and education are stronger than ever. There's never been a better time to be a Stanford engineer or hedge fund manager. The question is how does the black high school grad in Cleveland or the Latino community college student in San Antonio participate in and benefit from today's economy (aside from having a better device)? Having Internet access and a Facebook account are not the equivalent of access to education and economic advantage.
It's my hope that Venture for America can become part of the solution by recruiting and training future founders and leaders of diverse backgrounds. Our 2015 class is set to be 20% African American and Latino -- not quite the 29% that would match the US population, but a start. We believe that we can provide some of the network, experience, confidence, exposure and access to capital that will spark some of the next generation of entrepreneurs. If more people from different communities start and run businesses, opportunity will be much more accessible.
I know there are many other people who care deeply about this and have much more direct experience with it than I do. I recently met Gerald Chertavian of YearUp, which trains and channels diverse young people into roles at major corporations. Gerald started YearUp fifteen years ago - today it has a budget of $100 million and transforms thousands of lives per year. One YearUp alum, Jay Hammonds, experienced incredibly tough circumstances -- he was left by his parents when he was four years old and was later going to drop out of college. He went through YearUp, and today is thriving as an IT manager at Facebook. Jay is a great young man who is making the most out of an opportunity. YearUp has launched a campaign, Grads of Life, encouraging employers to seek out more people with diverse backgrounds.
2043 -- the year that the U.S. is projected to become majority minority -- will be here before we know it. My kids will be in their twenties. Ideally, this occasion will be not that big a deal because of the inclusive economy we've built and how access to education and opportunity is widespread across people of different backgrounds. Unfortunately, this won't happen on its own. A lot of people, and a lot of institutions, are going to have to dig deep and do tons of work for the next couple of decades to make it happen.