From USA Today 5/15/17, Page 6B.
Racial and ethnic diversity spurs economic progress; sameness spells economic segregation.
The interplay between race, ethnicity, and economic progress in the U.S. has long been a complex and politically loaded one, even before the election of Donald Trump. As president, Trump’s embrace of white supremacists and controversial immigration policies have only brought America’s divisions further to the fore. But ethnic and racial diversity is a key factor in America’s economic growth. My own work has looked at the role of factors like openness to immigrants and gays and lesbians in the innovative quality and economic development of cities and metro areas.
I have previously covered the black and white racial divide in the creative class. Today, I want to turn more broadly to the racial and ethnic diversity of the creative class—the nearly 50 million American workers, who make up roughly a third of the United States workforce, spanning science and tech; business and management workers; and arts, design, and cultural creativity. Economist Todd Gabe of the University of Maine ran the numbers for all 350-plus U.S. metros based on data from the American Community Survey by the U.S. Census.
The first map shows the Hispanic share of the creative class across metros. This includes all Hispanic residents, regardless of skin color. On the map, dark purple indicates a high level of diversity, and lighter blue indicates low levels of it. Hispanics make up the greatest share of the creative class along the southern border areas of Texas, New Mexico, Arizona, and California, as one might expect, but also in parts of the Rockies, Florida, around Chicago in the Midwest, and along the Boston-New York-Washington Corridor.
There are two metros where Hispanic residents make up more than a third of the creative class: San Antonio and Miami. There are two more—Riverside and Los Angeles—where Hispanics make up a fifth to a quarter of the creative class. All of these are in the South and West. Older industrial metros tell the other side of this story: Hispanics make up just 1 and 2.5 percent of the creative class in these places, with Pittsburgh topping the least-diverse list.
A map of the Asian share of the creative class across metros looks much the same: Again, there are large concentrations on the East and West Coasts, plus Texas. But now there are pockets in the South, Midwest, and Mountain states as well.
Join me at #NACCE2017 The Power of Partnership in Tampa, FL (Oct 8-11)! Bit.ly/2017NACCE, Leveraging your communities and relationships through entrepreneurial thought and action. There will be an evening salute to the Pirates of Gasparilla, settlers of the Tampa Bay such as Jean Lafitte.
Jason McCarthy describes his life immediately after leaving the military in 2008 as having hit “rock bottom.” The former 10th Special Forces staff sergeant was nearly broke, out of work, recently divorced, and struggling to adjust back into civilian life. The only thing that kept him going, he said, was his chocolate labrador, Java. “I was like a guy living a country song,” he jokes. “All he’s got is himself and his dog.”
McCarthy did have one other asset, although it didn’t seem very valuable at the time. Drawing inspiration from the heavy-duty survival packs he and his fellow soldiers carried around Iraq—an exercise known as “rucking”—he considered designing a backpack that would have the rugged functionality of military gear, but be designed for civilian use.
McCarthy played around with the idea, but admits that he didn’t know the first thing about sewing, manufacturing, marketing, or distributing a product. Yet believing in the strength of his idea, he founded GORUCK. “People were like ‘what’s the hardest thing [about starting a company]?’ and I’d say, ‘everything.’ Everything was my biggest challenge, because I didn’t know anything about it,” he said.
Though the idea was little more than a hobby at the time, McCarthy wanted to protect it, despite not having the money to file patents and trademarks with a traditional law firm. That’s when he discovered LegalZoom. “I didn’t want to spend thousands of dollars wasting money on that, and I had heard of LegalZoom and thought it couldn’t be that hard, and I was right.” he said. “I still have the napkin sketches that I drew while I was filling out the application.”
The military culture that McCarthy had been entrenched in since 2001 discourages many of the attributes that are vital to entrepreneurial success, like creativity and self-promotion. There was one attribute, however, that McCarthy pulled straight from his military training, and it ultimately helped him get his company off the ground.
“I learned in the military that you can solve any problem if you build a team and just keep after it,” he said. “I don’t think it’s a prerequisite to have been in the military, but in my case it’s the reason why I am where I am.” Those problem-solving skills, along with some help from the fellow former Green Berets McCarthy employed, helped the company adjust its strategy when it became obvious that, in his words, “nobody wanted to buy the bag.”
With no marketing experience and his every last penny invested in inventory, McCarthy had to find a unique way to sell the bags that were collecting dust in his basement. That’s when he created the GORUCK Challenge. The team-based endurance event takes a group of participants, packs their GORUCK bags with weights, and puts them through a series of challenges led by former Special Forces. During these military-like missions, participants can help carry some of the weight on their teammates’ backs, or ask for help when needed.
The events soon took off, and the bag sales eventually followed. “People don’t want to buy a thing, they want to believe in something, they want to have an experience,” said McCarthy. “The GORUCK Challenge is a real experience.” Last year, live events and equipment sales helped GORUCK pull in total revenues of $15 million: 80% from gear sales and 20% from events. Now McCarthy is able to give back to the military community that helped inspire the idea, both through hiring veterans and through the company’s nonprofit, Java Forever, created in memory of his first chocolate lab and registered using LegalZoom.
Today, McCarthy has a chocolate lab named Monster, who serves as the company’s unofficial mascot and president of GORUCK nation, but it’s no longer just one man and his dog. He and his wife Emily have three kids: Jack, Ryan, and Natalie.
OMAHA — Nearly two decades ago, a 10-year-old shareholder stood in front of a microphone here and asked Warren Buffett how the Internet would reshape companies.
It was 2000. Buffett, the chairman and CEO of Berkshire Hathaway, said fairly little. He saw a threat in the Internet, but said he was unsure how it would ultimately affect his investments, according to a report at the time.
On Saturday, that same shareholder, Thomas Kamei, now a 27-year-old investor based in New York, submitted an updated version of his question at Berkshire’s annual meeting. This time, Kamei focused on artificial intelligence, a technology that threatens to upend the economy just as the Internet did years before. What did Buffett make of it?
Buffett said that AI could be “enormously disruptive,” yet beneficial in making the economy more efficient.
“I would certainly think [AI] would result in significantly less employment in certain areas,” he said. “It would be a good thing that would require enormous transformation in how people relate to each other, what they expect of government, all kinds of things.”
The comments came during a more than six-hour Q&A session in which Buffett and his investing partner, Charlie Munger, repeatedly praised efforts to make businesses more productive, despite job losses. They pointed to past advancements in farming and auto manufacturing, industries able to do more with fewer workers.
The duo also defended their work with 3G Capital, the controversial Brazilian private equity firm known for aggressive cost cutting and layoffs. Kraft Heinz, backed by Berkshire and 3G, laid off 1,000 workers in 2016 and plans to cut thousands of additional positions, a strategy seen at odds with Berkshire’s folksy image.
The fear, though, is that AI may cause even more losses. A recent study by PwC found that about 40 percent of jobs could be automated with current technology by 2030.
Buffett laid out a theoretical scenario at one of Berkshire’s best-known companies, Geico. The insurer employs about 36,000 people, yet the financial services industry is seen as vulnerable to automation. Buffett asked: What if all of Geico’s current functions, aided by AI, could be done by 10,000 people, or a third of the staff?
“I don’t think we’ve ever experienced anything quite like that,” he said. Munger, known for his brevity, told Buffett not to worry. “It’s not going to come that quickly,” he responded.
When a shareholder later asked Buffett if he would push back on a Berkshire subsidiary that wanted to move a factory overseas, Buffett gave examples of previous Berkshire companies like Dexter Shoes that had already been forced to do so.
Global trade, he said, benefited the U.S. by providing consumers with lower prices and more places to sell goods. But he also said that it could create “roadkill” of people, one reason he wants more government programs for displaced workers. He did not outline specific proposals, but said the U.S. needed an “educator-in-chief” who could explain the benefits of trade and come up with solutions.
Unemployment insurance already existed and provided help to those in need, Munger said. “I’m afraid a capitalist system is going to hurt some people as it modifies and improves,” Munger said. “There’s no way to avoid it.”
From LinkedIn by Chip Cutter, Managing Editor
This is what I wish: that my daughters don’t go to school.
I offered my oldest the very prestigious “Altucher Fellowship”. Never awarded before. Only awarded to her. Basically it says: do exactly what I tell you to do for a year and don’t go to college.
I’m not sure she’s going to take it. Here’s my ideal program:
And, by the way, this will be cheaper than you going to college. Her answer, begrudgingly: I’ll think about it. Here are the skills:
A. Networking – A corollary of leadership
B. How to sell – Presentation, vision, motivation, sales.
C. Negotiation – Which means win-win, Not war.
D. The Google Rule – Always send people to the best resource. Even if it’s a competitor. The benefit to you comes back tenfold.
E. The 1% Rule – Every week, try to get better 1% physically, mentally, and emotionally.
F. Idea Sex (but with protection!) – Get good with setting up with ideas. Then combine them. Master the intersection.
G. Reinvention – Which will happen repeatedly throughout life.
H. Leadership (which is really a course about how to deal with both Vision and Anger at the same time) – Give more to others than you expect back for yourself.
I. Mastery; How to master any field – You can’t learn this in school with each ‘field’ being regimented into equal 50 minute periods. Mastery begins when formal education ends. Find the topic that sets your heart on fire. Then combust.
J. Finding Signal in the Noise – News, advice books, fees upon fees in almost every area of your life. Find the signal outside of the noise everyone else marches to .
K. Themes > Goals – Goals will break your heart. Have a theme. You can build your days around your themes. In the short blink that thins out your life, when you reach the point where goals matter no more, the themes of your life will shine bright.
L. Creativity – Take down a pad. Write down a list of ideas, everyday.
M. Failure (a skill not taught until many years after the degree. But it is taught, believe me, you will learn it or die). – Learn how to fail so that failure turns into a beginning.
N. Give and you will Receive – Give constantly to the people in your network. The value of your network increases linearly if you get to know more people, but exponentially if the people you know get to know and help eachother.
O. Simple tools – To increase productivity
UNIVERSITIES THAT ESTABLISH their own startup incubators often see a decrease in the quality of university innovations. That’s according to a new study that analyzed nearly 56,000 patents granted between 1969 and 2012 to more than 60 U.S.-based, research-intensive universities that have established incubators. About half of the incubators in the U.S. are located on a university campus, or otherwise sponsored by a university.
According to the researchers, “Not only do university attempts to encourage innovation and entrepreneurship by incubating businesses seem to reduce the quality of subsequent scientific and technical innovations, but they also appear to reduce the income generated by innovative activities.” The study was conducted by Christos Kolympiris, associate professor in innovation and entrepreneurship at the University of Bath School of Management in the U.K., and Peter Klein, professor of entrepreneurship at Baylor University’s Hankamer School of Business in Waco, Texas.
Klein emphasizes that the study focused on the quality not the quantity of the patents. Researchers tested innovation quality by looking at the university patents and their “forward citations,” or the number of times these patents were cited in the bibliographies of subsequent patent applications.
“For example, if I had a patent in 2005, how many future applications cited my patent?” Klein asks. If the answer is none, his patent would not be “as ‘foundational’ as a patent that was cited in a bunch of future applications.”
Universities often create incubators as a response to reduced public funding and increased calls for accountability. But university resources are finite. If too many resources are dedicated to incubators, entrepreneurship and other forms of academic innovation may suffer. Moreover, the more universities invest in incubators, the less they can devote to other activities such as basic research.
However, the study stresses that incubators still provide value to universities-and that value is only partially educational. The authors write, “The presence of an incubator may attract particular kinds of faculty and students, enhance the prestige of the university, generate economic multiplier effects, and benefit the community as a whole.”
“The Effects of Academic Incubators on University Innovation” was published online January 2017 in the Strategic Entrepreneurship Journal. Read the article at onlinelibrary.wiley.com/doi/10.1002/sej.1242/full.
Video available – 5/10/17 at 7AM EST at www.thatbusinessnetwork.com & iTunes = https://itunes.apple.com/us/podcast/that-business-show-jamie-meloni/id967290698?mt=2 You Tube – https://www.youtube.com/jamiemeloni
It’s Small Business Week in America, time for the country to recognize the many contributions small businesses make to our economy, our communities and our fellow Americans.
Now, if you own a small business — especially if you work from home or have just a handful of employees — acquaintances might not give you much respect.
When I started my business, my friends and family didn’t think I had a “real” business. They’d ask me to run errands, meet in the middle of a work day, or ask when I was going to start looking for a job. It wasn’t until one of my clients hired me for a project in Australia (that wowed them) that it dawned on them I might actually be doing something others valued.
So the next time you’re at a cocktail party or family gathering and asked when you’re going to get a “real” job, wow your friends and family with these small business facts.
Most small businesses survive. No doubt you’ve been told most small businesses fail. Well, check this out: Nearly 80% of businesses started in 2014 were still in business the following year, the U.S. Small Business Administration reports — the highest survival rate since 2005. About half of all businesses are still in business five years later, and many of those that closed were because the owner decided to do something else, not because of bankruptcy. A third of all establishments will still be up and running 10 years later.
Small businesses with one to nine employees have an even higher survival rate.Of all small businesses, 3.7 million have between one and nine employees. A whopping 62% of these are over five years old, meaning they have an even greater chance of survival than larger small businesses.
Apple, Whole Foods, Starbucks, Coors, Mattel all started out as small businesses. Many new businesses start with venture capital enabling them to grow quickly, and some businessmen inherit money and start out big. But most small businesses start from scratch and grow over time. Remind your friends of the humble origins of many of the companies now on the Fortune 500 list.
You have a better chance of being in the Fortune 500 than the ones there now. Talking about that list of the biggest companies in America, small businesses are going to push most of them off the list. Nine out of every 10 companies in the Fortune 500 in 1955 weren’t there in 2015, 60 years later. Over time, small upstarts replace stalwarts of our economy.
Small businesses create most of the jobs.According to the Small Business Administration (SBA), small businesses create 64% of new private sector jobs in the U.S. We hear constantly about the importance of jobs from politicians. Small businesses actually go out there and create them.
Small businesses are big innovators. When comparing companies than create a large number of patents (15 or more in four years), small businesses create patents at a rate 16 times higher than larger businesses.
Small business is a path toward the American Dream. With greater economic disparity and the loss of many good paying blue collar jobs, today, more than ever, small business ownership is a path toward a middle-class lifestyle. That helps explain the relatively high rates of small business ownership by minorities (29.3% of small businesses), immigrants (14.4%), and women (36.3%). Veterans also make up a large number of small business owners at 9.3%. When other paths are blocked to making money, small business ownership and self-employment is a way forward.
Being in business is cool. Successful entrepreneurs are this generation’s role models. Where once corporate executives were the business media darlings, today, they are people like Mark Zuckerberg and Sheryl Sandberg of Facebook; Elon Musk of Tesla, Jack Ma of Alibaba and the late Steve Jobs of Apple. Entrepreneurs are inspiring.
Small businesses change the world. They innovate, creating new industries and new products. They provide vital services. They support their communities. Most importantly, they create jobs. When you create a good job with fair pay and good working conditions where people take pride in their work and are treated with respect, you change their world, your world and the world in general.
Rhonda Abrams is the author of 19 books on small business. Connect with Rhonda at www.PlanningShop.com.
To the intrepid entrepreneur getting ready to make a big bet on a big dream, I say to you: Go head. There has never been a better time to start a small business. To the hard-working small business owner, I say to you: Way to go. There has never been a better time to own a small business. And to those in corporate America, I say to you: Thank you. There has never been a better time to support small business.
The reason for all the optimism is that his is the golden age of small business, for all sorts of reasons (which I will belabor in a moment), but the bottom line is this: A confluence of attitude, aptitudes and interludes have created a time when starting, running and growing a small business has never been easier, more affordable or more acceptable. Hooray, small business!
Sunday marked the start of National Small Business Week. Honoring our country’s small businesses is right for many reasons, including -Their incredible economic impact. (There are 28 million small businesses in the U. S. vs. 17,000 companies with more than 500 employees.) The number of jobs they create (about half of private sector employment). So yes, three cheers for small business generally. But that also raises the questions: How is mall business doing today? Here we also have (mostly) good news.
According to the latest Bank of America Small Business Report, while small businesses are confident and work hard, they also find their gig pretty darn stressful. How stressful? Survey respondents said that owning business was four times more stressful than raising a child (41% vs. 9%) and almost a quarter had nightmares about their business failing. Despite the pressure, it turns out that our small-business brothers and sisters pretty much love what they do. The vast majority, 82%, said they have achieved that ever-elusive “work-life balance”, and even more -92%- stated that what they love is the flexibility their business affords them. Indeed, according to the Small Business Owner Report, entrepreneurs and their teams seem to be a generally contented, happy lot.
So, if the state of small business is so sound, the questions then becomes, where are we headed? Not to sound any more Pollyanna-ish than I already do large companies create ever more powerful tools and solutions for us, not only has technology made our jobs easier, more profitable, and more fun, but the zeitgeist generally favors us. People today love small business and know how important it is to shop small. For that, we are very grateful. And so to our small-business customers, friends, and readers, I say to you: Go ahead, hug a small-business person today. We deserve it.
From 5/1/17 USA Today, Page 3B, by Steve Strauss.