COVID-19 has triggered a sharp economic slowdown. Separately, some of the Black Lives Matter protests have focused on African Americans and other non-white groups trailing Caucasians in average household income.
Can more business innovation be a partial solution to both issues? Some people think so.
Wisconsin and the nation continue to have double-digit unemployment rates, largely due to business cutbacks during the COVID-19 pandemic. On Monday, the state begins accepting applications for a $75 million federally-funded small business recovery grant program called We're All In.
But Missy Hughes, secretary and CEO of the Wisconsin Economic Development Corporation, recently told the WEDC Board that there has to be more to the recovery. Hughes says after a big recession, there has to be risk-taking and innovation.
"You see people say, 'I'm not going to start my own company. I'm going to stay where I am because that's the place where I feel safest and it's best for my family.' But we know that innovation is important. We know that startups are important for creating jobs and creating opportunity and solving problems,” Hughes said.
Hughes spoke on June 3. Just two days later, the protests that began in Minneapolis over George Floyd's death while in police custody expanded to Milwaukee. They've continued since.
Some of the protesters say the marches are about more than police brutality and are partly fueled by economic disparity.
The president of the group Startup Milwaukee, Matt Cordio, a Caucasian, argues that Milwaukee has long suffered from systemic racism and inequality. He says there is a lot of work to be done to build a more inclusive and equitable community, startup ecosystem and local economy.
Cordio points to some African Americans who are trying to diversify the local startup workforce.
For example, there's Dana Guthrie, founder and managing director of Alchemy Angel Investors. Guthrie says her company encourages financing and advisors to help "traditionally untapped sources of innovation." She says as part of that mission, she tries to diversify the room.
"Where I have not only investors of different professional backgrounds and experiences but investors that have different personal backgrounds and experiences. Then, when that entrepreneur comes in front of us and pitches — regardless of background, white, black, doesn't matter — that individual, that founder, has a greater likelihood of making a greater connection to at least one of the investors in the room,” Guthrie explained.
She says there's been a pause in bringing investors to a single room during the COVID-19 pandemic. But Guthrie says some continue to fund startups or see a greater focus on health as an investment opportunity. She says one of her clients is a food company that promises their product will provide mental health benefits like reduced stress. The launch of the firm's re-brand is scheduled within the next month.
Another African American, Nadiyah Johnson, is CEO and founder of the software company Jet Constellations, as well the Milky Way Tech Hub. Johnson urges companies to make sure their tech workforce reflects the diversity of the area.
"Technology drives all aspects of business these days, specifically, around data and analytics, machinery and artificial intelligence. And, it would be extremely unfortunate if more companies continue to neglect the fact that there's just a complete under-representation of black and brown people right now,” Johnson told WUWM.
Johnson and StartUp Milwaukee are urging larger business groups like the Metropolitan Milwaukee Association of Commerce (MMAC,) the Milwaukee Economic Development Corporation and the Greater Milwaukee Committee to work collaboratively to establish venture capital and loan programs backing underrepresented founders.
The Hispanic Collaborative is a partner organization with the MMAC. Collaborative President Nancy Hernandez says it's “not as easy lift” to reach the tech diversity goal. She says 80% of the local Hispanic workforce is in non-tech industries — like food prep and service, building and grounds, and light industrial. But Hernandez says there are programs to train more high-tech employees.
On the business ownership side, she says many Hispanic innovators would like access to advice and financing.
"We want to make sure they're connected with the accelerators and the venture capital dollars out there. Whatever we can do to strengthen those conduits is what we're looking to do on that entrepreneurial and innovation side,” Hernandez said.
Hernandez says she remains optimistic. She says she believes investors looking for a return on their money realize that great ideas come from a variety of communities — when those communities are given a chance.
Support for Innovation reporting is provided by Dr. Lawrence and Mrs. Hannah Goodman.
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