On Friday, May 1, I had the pleasure to appear at the Poverty, Justice and Jobs Think Tank, hosted by Harvard University’s Advanced Leadership Initiative in association with the Charles Hamilton Houston Institute for Race & Justice. The panel, titled Economic Empowerment and Job Creation: Microfinance and Enterprise Solutions, was moderated by Harvard Business School’s Peter Tufano and included Michael Chu, Senior Lecturer, Harvard Business School; Nancy Barry, former CEO, Women’s World Banking; Gail Snowden, CEO, Freedom House; Andrea Titterington, Regeneration Director, Liverpool Football Club; and Tim Williamson, Co-Founder and CEO, Idea Village.
Tim Ferguson
Economic Empowerment and Job Creation: Microfinance and Enterprise SolutionsPoverty, Justice and Jobs Think Tank, Harvard University
Here’s the problem, as I see it: Our attention – our focus – is not where it should be.
Michael Porter has said that no social program can rival the business sector when it comes to creating the jobs, wealth, and innovation that improve standards of living and social conditions over time. And yet so much of our focus is either on big business on the one hand, philanthropy and micro-finance on the other, that we essentially neglect – some of it’s benign, some not – that part of the business sector that is most productive, creates the most jobs, represents the fundamental drivers of our economy.
I’m talking about the missing middle. Those businesses that James Surowiecki described in The New Yorker as bigger than a fruit stand but smaller than a Fortune 1000 corporation. They have revenues between $1 million and $100 million, and are responsible for more than 60 percent of all jobs, making them absolutely essential to our economic prosperity.
Ironically, they are more or less ignored by traditional financial institutions and are barely on the radar of VCs or foundations. Sustained economic growth requires businesses like these that reach for scale. It requires that we invest in resources that help build and support them, and in so doing, provide momentum for job growth and wealth creation. And yet our tendency is to ignore these innovative, hard-working, persevering and profitable entrepreneurs, and we continue to do so at our collective risk.
I am extremely passionate about this, so much so that I founded Next Street, a merchant bank dedicated to providing advice and access to capital to urban-based, small and medium sized businesses. In fact, Next Street’s model represents a new enterprise for a new economy: a for-profit business focused on maximizing the growth, profitability and success of high-performing urban businesses. Our goal is nothing less than enhancing economic development, wealth and job creation and transforming the way that financial and business advisory services are provided in this market.
Our client businesses are often – but not always – minority or women owned. They’re creating real jobs, the kind of careers you can raise a family on, and improve standards of living that build up communities.
