Progressive Enterprise: Innovation Through Intervention?

Entrepreneurship is a wonderful thing. New businesses account for about half of all job creation in the U.S. and represent the fullest vision of the American dream. Underlying much right-wing animosity toward Liberals is the sentiment that we just don't 'get' the free market. There is a notion that Liberals dislike autonomy and innovation; that they are unable to appreciate the majesty of enterprise; and that all 'leftist' activity is in opposition to the market.

Obviously, this is hogwash. But I found some intriguing data that suggests that such attacks are not just wrong-headed, but flat-out self-contradictory. Lo and behold, 'leftist' policies of aiding low-income minority populations and socioeconomically disadvantaged demographics might just make a lot of sense from an entrepreneurial perspective. A 2005 Assessment of entrepreneurship found that:

• Black men with graduate experience are three times as likely to report participation in a start-up activity than white men with the same educational background; Hispanic men are 50% more involved than comparable white men.
  
  
• While educational attainment and household income are not associated with more participation in start-ups for the majority, for blacks and Hispanics educational attainment is associated with much higher levels of participation.
  
  
• The impact of income is often a distinction between those with the lowest annual income, under $30,000 year, and all other individuals. In a similar fashion, the impact of education generally involves those that have gone beyond high school compared to those that have no training beyond high school.
  
  
• The determinants of if people got involved in start-ups were if they answered affirmative to the following sorts of questions: (1) Do you know someone personally who started a business in the past two years? (2) In the next six months do you think there will be good opportunities for starting a new business where you live? (3) Do you have the knowledge, skill and experience required to start a new business?
  

So what can we take away from these points? Let me repackage the above points a bit to make their relevance to progressive policy a bit more clear:

Blacks and Hispanics are very engaged in entrepreneurship, but their degree of participation is more dramatically contingent on educational achievement than it is for whites. Thus they represent an active demographic that is generally more 'uneven' with regards to the dynamics of educational distribution.

Indeed, the poorest and least educated people--who are more likely to be African-American or Hispanic (both have a poverty rate of about 20%)--get the least changes at entrepreneurship. So minorities are more active, but more vulnerable to conditions averse to entrepreneurship (poor education, poverty).

Lastly, social capital and community context--who you know, the immediate hopes you have, and the conditions in which you have to function--are critical determinants of entrepreneurship. Thus again, those in disorganized, struggling, or marginalized communities are probably less likely to have the first-hand experience and contextual encouragement necessary to take commercial risks.

See where I'm going with this? Progressive policies aimed at helping working families and low-income individuals aren't strategies to keep 'undeserving' people fat and happy. Its a recipe for helping to build whole new demographics of dynamic, productive individuals. Individuals who represent a high-potential group of innovators and entrepreneurs, but who are disproportionately inhibited by some of the socioeconomic correlates of entrepreneurship.

See, right-wing blowhards? We're actually looking to infuse the American economy with a shot in the arm. It's just going to take a bit of compassion and progressive pragmatism to give would-be Google guys a fair shake at changing the world.