What We’re Learning About Entrepreneurship as a Job Creation Strategy

Living Cities is committed to improving the economic well-being of low-income people. Given all of the momentum around leveraging the potential of new and small firms as job creators, we set out to learn more intentionally about the barriers and opportunities to accelerating new firm creation by taking stock of all of the initiatives in our portfolio and the portfolios of our members that aim to support entrepreneurship and small business growth.

To gain a more strategic understanding of what activities already exist and where there are gaps, we took inventory of strategies that we and/or our members are currently investing in and categorized them by the barriers they sought to address. There are common themes that emerge among the barriers that multiple organizations are trying to solve for, and we want to be sure that there is alignment and shared learning around which barriers they are targeting and which solutions are effective in achieving results.

We created this map to reflect to the field where there is already investment, and enable conversation around how we as changemakers can adopt a more cohesive and thus more powerful approach to addressing common barriers. Using that lens, we could clearly see a set of strategic solutions aimed at each barrier, so we categorized each activity according to the following:

  • The barrier to start-up/growth that the initiative tries to solve for.
  • The solution being employed to address the above barrier.
  • The activity being done as part of a solution.

The themes that emerged gave us a clearer picture of what organizations in the field are currently attempting to do, but it doesn’t yet tell us which of those solutions are working. We believe that in order to get better results for low-income people and communities of color faster, we need to continue to codify what works, what doesn’t, and why.

[[big-button “Explore the Entrepreneurship Strategy Map” “https://www.livingcities.org/resources/preview/831886ac-9c7a-4483-88e0-c7c7d6d1b67c”]]


Addressing Barriers to Firm Start-Up and Growth

These eight themes emerged as the major investments organizations are making to support entrepreneurs of color attempting to start up or scale up businesses:

1. Capital & Financing

Starting or growing a business almost always requires some up-front financial investment. The accessibility of different types of financing varies from place to place, and along lines of race and gender. The solutions in this category represent many different approaches to increasing the capital that is available and ensuring it more effectively gets to the entrepreneurs and small business owners who need it.

2. Professional Networks

The individuals who make up an entrepreneur’s personal and professional networks can provide support and advice, and serve as a “safety net” to protect against the risk of business failure. Entrepreneurs with friends and family who are wealthier or have a history of business ownership thus have an advantage. This category includes activities that seek to more equitably connect entrepreneurs to networks that can benefit their businesses.

3. Public Policies & Processes

Regulations around starting and sustaining businesses can often be seen as too slow, complicated, or confusing. In addition, inefficient processes, high costs, and fear of government can add to the disincentives that aspiring entrepreneurs face when thinking of starting businesses.

4. Talent Pipeline

The number of people who could start businesses (including what the market could support) is much smaller than the number of people who end up starting businesses. This is true because certain populations face a convergence of barriers, including the ones we lay out in this post. Creating an inclusive pipeline means equipping people to create jobs by being business owners, rather than preparing people to fill jobs. The theory is that creating more entrepreneurs creates more firms, which creates more jobs.

5. A “Culture” of Entrepreneurship

There currently exists in society a set of mindsets and perceptions about the “type of person” who is an entrepreneur. A culture of entrepreneurship means exposing people to the idea of even being a business owner, and shifting these preconceived mindsets. This includes creating a general environment that is supportive to entrepreneurs, for example, so that communities are enthusiastic about local business and prioritize it over non-local corporations.

6. Targeted Business Supports

A lack of access to targeted business supports can exist for a number of reasons. At times, business support services exist but there is an access issue, either due to geographic location or the extensive effort and time needed to find resources from a variety of sources. At other times, general business services exist but are not specific enough to meet the immediate needs of a business owner. And often, business support services do not exist in a place.

Most solutions we found to this barrier involve aggregating and curating resources to make them more accessible and easier to find.

7. Economic Development & Community Development Alignment

While people who work in economic development and community development often have the same objectives for a place, the former focus on regional work while the latter focus at the neighborhood level. Making these two systems more cohesive, taking place-based needs into account, has the potential to foster a more supportive environment for potential business owners.

8. Corporate Policies & Processes

Corporate procurement can have a huge impact on small firm growth: it sometimes unnecessarily displaces small businesses or competes with them. Business-to-business sales require production at a certain scale that some small firms need support getting to, and helping small businesses navigate process and policy barriers has the potential to help them achieve scale.


The creation of the inventory was led by Brittany DeBarros, now of Brittany DeBarros Consulting, and supported by Living Cities team members Demetric Duckett, Ratna Gill, and Hafizah Omar.

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My Equation for Systems Change Results

In my last post, I argued that creating conditions for economic security requires more than job creation and wage growth. In fact, it requires transforming systems across public and private sectors so that economic well-being for all people living and working in a city is possible. Through my ten years doing results-based work, including on The Integration Initiative, I have watched an array of initiatives across the country work to harness the principles of collective impact to drive results for people and the communities where they live, work, and play.

Even with such efforts and despite the fact that this work spans different sectors and issue areas and takes on many forms, we continue to see incremental and/or segmented change rather than large-scale, transformative systems change and results for whole populations. Disparities remain, inequities prevail, and gaps widen in education, housing, health, business, jobs, income, wealth, and more. So the question remains: What will it take to achieve results at scale?

I’ve observed relationships and resources as the common denominators in successful initiatives led by highly impactful leaders. This phenomenon is consistent with leaders and communities increasingly embracing a results-based approach for their programs and strategies.

For practitioners, leaders, funders, and community members, the inception of Results-Based Accountability framework reinforced the belief that “relationships plus resources equals results.” Relationships are a means to engaging likely and unlikely partners to align around a common result, creating and building trust to accelerate the partners’ progress toward results, and facilitating greater accountability among partners for a shared result. Resources, intangible and tangible, enable stakeholders to design and implement a set of strategies that have a reasonable chance of making a measurable contribution to the shared result.

But while we’ve seen relationships and resources harnessed to positively impact communities, it is not enough. We actually need to undo the social, political, and economic structures that were created to maintain the status quo, which historically and disproportionately keeps people of color out of the social, political, and economic marketplace in ways that will enable them to thrive. Examples include the burning down of Black Wall Street, predatory lending to poor communities, and charging higher interest rates to families of color with the same credit risk ratings as white families.

Living Cities faces this now as we work to close racial income and wealth gaps for all people in US cities so that they are economically secure and building wealth. We know that we cannot do this alone, so we are leveraging our relationships and resources to come together around an audacious goal, disrupt prohibitive structures, and build transformative ecosystems where all can thrive. In order to achieve more than incremental and segmented change, I offer a third element: risk.

Introducing a Third “R”

As I have participated in, facilitated, and led collective impact efforts, my mental model for results has evolved to include the necessity of risk, which is to challenge the status quo; put personal, professional and institutional capital on the line; and acknowledge failure as an opportunity to learn and grow. I’ve seen results at scale in places where cross-sector leaders are willing to take risks and be disciplined and unrelenting in their quest for change.

We exist in systems where risk is associated with loss, scarcity, and failure, and we therefore avoid taking risks that can actually move us closer to results. Philanthropic and nonprofit institutions are largely designed to combat the ills that plague our society and facilitate well-being for people, communities, and the planet. Unfortunately, we allow the strength of our relationships and the power of our resources to be overcome by our risk aversion. And, I’d argue this behavior is in part due to the legacy of the social constructs (race and class) designed to advantage some (the “one percent”), entangle others in the perceived personal and financial risk that would be undertaken to fight systems of oppression (the so-called middle class), and simply exclude the rest (low-income people and racialized groups).

We exist in systems where risk is associated with loss, scarcity, and failure.

For example, there are plenty of people in power who would wince at the vision of “all people economically secure and building wealth.” Their immediate reaction is to think that it’s a zero-sum game, and that they must have less in order for others to have more. On the other hand, people who have largely been without resources and power may doubt that they could benefit from a thriving economy given the longstanding structures that have excluded them. Finally, there are those of us, like myself, who see the aspiration in the statement, but not without some skepticism and fear of failure.

The underlying assumption of each perspective is that we are operating in a system of scarcity rather than abundance. This mental model is part of the dark magic of European Imperialism, which led people to fiercely protect their resources, jobs, land, relationships and even white/light skin color from being taken away, conquered, and exploited. The fear of loss is so profound that we’ve created communities, systems, and structures that reinforce the belief that there isn’t enough for us all, even though we’ve learned over time that America’s resources are bountiful and that the diversity of its people–socially, economically, politically, and morally–is an advantage.

If you are still not convinced, note Angela Glover-Blackwell’s work that shows that “an equity-driven growth model would grow new jobs and bolster long-term competitiveness while at the same time ensuring that all—especially low-income people and people of color—have the opportunity to benefit from and co-create that growth.” In other words, we have no reason to go running scared. Equity and inclusion are just as much an economic imperative as they are a moral imperative.

For cross-sector leaders who set out to achieve results at scale, the risk is to leverage the power of complex relationships and the heft of collective resources to actively and unapologetically dismantle exclusionary structures that have become the bedrock of our society, shift our mental model to equity and abundance, and harness democratic capitalism in a way that allows all people to thrive economically.

Completing the Formula for Results At Scale

My equation is completed by the discipline in how we approach relationships, resources, and risk.

Discipline & Relationships

People make up systems and the processes, practices, and policies that govern them. Too often, however, we discuss the system as completely separate from the people (leaders, managers, staffers, customers) who ensure systems function. By separating people from systems, it is easy to avoid being accountable for the impact systems have on people within and without.

As leaders, managers, staffers, and customers, we must ask ourselves: “What is my relationship to the result of this program/strategy/institution/system, and what must I reconcile with my personal self and in my role in order to ensure that I am making the best call in service of results for people?”

“As a leader, What is my relationship to the result?”

Discipline & Resources

Thinking of money as the only resource needed to improve outcomes for all people is a limited view. We have a tendency to assume that all we need is money. I challenge you to think of a system that is not working well for people—this could be education, healthcare, or the criminal justice system. Would unlimited capital make the problem go away? No. The structural inequalities that exist in the system would perpetuate the asymmetries that already exist. Rather, we have to be good stewards of our financial resources and focus on how and when we deploy all types of resources, including, but not limited to human capital, social capital, time technology, knowledge, and information.

Discipline & Risk

There are a number of different kinds of risks that we in philanthropy, from a position of privilege and power, should challenge ourselves to take on. Specifically, we need to embrace the risk associated with long-termism that achieves population-level results over time, even though it is easier to show our boards quick wins and successful projects than to invest in the grueling work of systems change that can sometimes take years to yield tangible population-level results.

It is easier to show our boards quick wins and successful projects than to invest in the slow and grueling work of systems change.

The tension here is that the problems we need to solve are urgent and the pressure to show impact dominates. Because we believe we have to choose between quick wins and patient progress, we default to the former. We actually don’t have to choose. In fact, we can set a population result (e.g. economic security and wealth-building for all people in cities) that may take 10 or more years to accomplish, and shore it up by designing bold, systems-level strategies that are oriented to our result. The key to success is being disciplined in our approach to establish performance measures that allow us to track progress and make adjustments, but stay the course to see systems change and realize the result.

In service of our relationship to the result, we must also push ourselves to take the risk of naming the structural inequities that caused the outcomes we see today. As leaders, it may be a risk to name racism, white supremacy, and anti-blackness, but these are risks we must be willing to take on in service of bettering outcomes for all people.

Given the growing disparities across multiple social determinants of economic security or health, we need to push harder, take more risks, and be disciplined in our approach to results.

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– Italo Calvino, Invisible Cities

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