Jobs and Social Innovation

Jobs are the best social program, it has been noted frequently. If that’s true, we can expect to see social problems rather than progress in the United States if we continue to have high rates of youth unemployment, especially among minority males. Youth unemployment is an even greater problem in other countries—Greece, Italy, South Africa, to name just a few. Furthermore, the gap between the highest income-earners and the rest continues to grow, and social mobility has declined. Opportunity has become one of the most perplexing questions of our times. Job creation is an imperative, and it calls for innovation in social institutions.

The global financial crisis hurt everyone, but it had two pernicious effects on specific populations, and it pointed to underlying structural issues that make the problem harder: global competition from emerging markets and productivity through technology, which can replace people with machines. Small businesses, especially startups, long the engine of American job creation, fell behind in job creation and failed at a slightly higher rate. At the same time, as many as 3 million jobs went unfilled because of a mismatch between the needs of employers and the availability of workers with appropriate skills. (Both according to data I collected for the Harvard Business School US Competitiveness Project.)

Two broad strategies are needed: 1) to boost the success rates of innovative new enterprises with growth potential and 2) to innovate in education and training to ensure that those who have been falling behind can find opportunity. Venture creation is a way for people to create their own jobs and provide employment for others as well. Both nonprofit and for-profit enterprises can create jobs, although for-profit enterprises can attract capital to allow for scaling up faster and to larger size.

Promoting entrepreneurship has a human capital component. The Kauffman Foundation has long been at the forefront of urging the teaching of entrepreneurship skills. The number of academic programs has been growing. There also has been growth in the number of nonprofit incubators and accelerators, often university-related. A classic lesson about innovation applies here: To get more successes, you need more failures. In short, increasing the volume of startups, and supporting them with mentors, is likely to produce many more viable growth enterprises.

In the next decade, civilian national service has the potential to take its place beside military service as a universal training ground for young people and a bridge between education and careers.

In the next 10 years, student entrepreneurship will be the norm. Stealth all-nighters by the next Mark Zuckerberg, Bill Gates, or Michael Dell, who started Facebook, Microsoft, and Dell in their college dorm rooms, will be replaced by pizza workshops in university facilities where venture creation is woven into the curriculum and supported by the faculty. Moreover, cities will create innovation districts with shared work spaces and affordable post-student housing, to support graduates as they build a venture. Boston is creating such an innovation district in its still undeveloped waterfront area, anchored by another sign of things to come, the offices of Mass Challenge, one of the world’s largest business plan contests.

Some incubators and contests will reach inner cities, motivating left-out populations to remain in school and gain skills to “do cool stuff.” But a range of other human capital innovations can build on recent successes to accelerate progress. Apprenticeships are an underused mechanism for ensuring job-ready skills; apprentices are employed in only a handful of the industries eligible, according to the US Department of Labor. Social enterprises have emerged to fill the void—such as Year Up, which prepares selected youths from disadvantaged backgrounds for good jobs. With the national spotlight on this challenge, such innovations will likely scale up in the next decade, with community-based organizations, new social ventures, and traditional educational organizations creating collaborations with employers.

Educational bridges will be built to connect school to work and to make working an integral part of schooling. They will increase the relevance of education to at-risk youth populations and motivate staying in school; they will also ensure job-ready “middle skills,” those involving more than high school but less than four years of college. Some examples: a six-year high school pilot in New York City, Pathways in Technology Early College High School (PTech), opened in 2011; the community college system, which offers college-level classes to the students and an associate’s degree on completion; and IBM, which supplies mentors, field experiences, and the promise of a job interview upon graduation. (I have been an IBM senior advisor.) This model is spreading quickly. It should become an integral part of urban school systems in the next decade, replacing failed high schools with a skill-building alternative.

The military has long been an effective job-training mechanism providing opportunity for upward mobility. Veterans services were long left to the federal government, but there are signs that social entrepreneurs want to tackle the problem of matching veterans with civilian job opportunities. This trend is likely to grow, as social ventures apply technology to make matches and provide online mentoring.

In the next decade, civilian national service has the potential to take its place beside military service as a universal training ground for young people and a bridge between education and careers. In the United States, civilian national service is the province of social enterprises that can receive (limited) federal dollars but also enjoy private sector support and, in some cases, funding from the entities being served. For example, City Year, a model for President Clinton’s AmeriCorps program, has focused in recent years on deploying corps members to alleviate the US high school dropout problem, adding literary and math training for corps members and turning them into “near-peer” paraprofessionals. (I serve on the City Year national board.) National service can thus create jobs directly by employing young people to address national needs; it also works on human capital formation for future jobs.

One mega-trend could be the most important of all. A future arena for innovation is in quality-of-life services: health care, education, and improving the environment. The application of new technologies—for example, home health monitoring, smart water meters, and digital classrooms—will produce new service models that will shake up established organizations, but also will create demand for a range of new professional and paraprofessional roles that will provide job opportunities for middle-skill jobs.

Investments in entrepreneurship and human capital through innovative institutional models can broaden the pool of jobs as well as the number of people ready to fill them. That would expand opportunity and restore more inclusive economic progress.

© Copyright 2012 by Rosabeth Moss Kanter. All further rights reserved.

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