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Jobs and Social Innovation
Rosabeth Moss Canter

March, 2013

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.

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