Authors: Henry C. McKoy Jr. and LaChaun J. Banks
Summary: Inclusive economic development is an area of high priority for many cities. This focus is driven by numerous factors. As demographic shifts in the population transform America into a browner and older country, its cities are faced with both the promises and the challenges associated with those shifts. A key focus of inclusive economic development has been entrepreneurial development among historically underutilized populations, such as blacks, Hispanics, and women. Surface level data on US business ownership reported by the US Census Bureau suggests that as racial minorities increase their share of the overall population, that they are also increasing their share of business ownership. This would appear to be a positive trend. However, upon closer analysis, several important patterns counter what seem to be these positive trends.
This report analyzes 21 cities that participated in Harvard’s Project on Municipal Innovation’s recent convening in Cambridge, MA. This report offers a quick “economic equity scan” of these municipalities, both independently and collectively, across a group of economic equity measurements. Several organizations are focusing on this topic of economic inclusion and grappling with how to accurately measure it. Some analyses focus on a combination of a community’s educational attainment, housing affordability, provision of social services, and other components. The analysis presented in this report takes a different viewpoint by focusing on share capture of America’s five major racial groups (American Indians, Asian Americans, Blacks, Hispanics, and Whites) related to the fundamental basis of community wealth creation – entrepreneurial and economic activity. The fundamental purpose of this report is to offer a snapshot of “community economic equity” at the municipal level, contrasting it against peer communities and nationally.
Key Findings
- Across almost all cities, Blacks and Hispanics are consistently the populations demonstrating the least economic strength. In order to close the economic equity gap, special attention will have to be directed towards those populations.
- Though efforts focused on wealth creation in communities often focus on homeownership, educational attainment, and workforce development as the foundation of improvement, addressing economic equity through entrepreneurial equity is likely a more potent way to address these other gaps.
- Many cities have the potential to face serious fiscal, community and social challenges in the years and decades ahead.
