Today’s mainstream communities host hordes of businesses on every street corner. So where can growing companies look to position new business opportunities? Contrary to popular opinion, our impoverished neighborhoods have the desired combination of conditions to attract the most astute investors.
Close to one-third of Americans, or 100 million people, are economically disadvantaged. Ironically, it is this low-income population that represents the next major frontier of economic opportunity. They hold enormous human resources of wealth creation and opportunity just waiting to be unleashed.
As America’s economy rebounds, poor communities are proving to be the fulcrum to helping the country achieve its boundless success once again. If Wall Street, banks, large corporations and our government want sustained economic growth, they need to focus their efforts where emerging markets, entrepreneurs and small business owners are most abundant: America’s poor and struggling middle class communities–especially within our inner cities.
Poor communities drive a lot of consumer spending
Fully 70 percent of our economy is powered by consumer spending–not by business or government. It is not wealthy consumers who are driving economic growth in this country; the bottom 80 percent of Americans by income spend 90 percent of their pay every year.
Companies that target only the upper tiers of the economic pyramid are missing out on the massive market that exists at the pyramid’s base. Those in the know no longer buy into the misperception that the poor limit their spending to basic needs alone. Even though individual incomes of the poor may be low, their aggregate buying power is enormous. These consumers may be unable to save for a rainy day, but they still make luxury purchases, from cars to appliances to electronics.
Poor youth offer real hope for future entrepreneurship
Results from a Gallup–HOPE Index and Gallup Student Poll in 2013 showed that today’s low-income youth are more likely than their wealthier peers to develop problem-solving skills (51% to 43%). The poll also showed that traditional minority groups have a higher propensity toward entrepreneurship than their mainstream counterparts.
The traits that low-income youth must cultivate as coping skills can develop into employable strengths, such as outside-the-box, inventive thinkers and driven employees for the budding workforce. These youth are ripe for empowerment, not entitlement. Young people from communities facing economic challenges represent a burgeoning pipeline of entrepreneurial capacity to staff new business and enterprise development.
Poor communities are hidden sources of opportunity
Where many people see poor neighborhoods as communities of discarded people, those with a keen eye to economic opportunities see emerging markets, small businesses, investment growth and job creation waiting to happen.
At the same time, poor neighborhoods have enormous unmet need for mainstream services. These communities need everything from traditional banking to gas stations to quality food stores to entertainment venues. Meeting that need provides a step toward producing effective economic energy and community stability.
Some would argue that there is no money in these communities to purchase the items that businesses sell, but it is precisely by meeting these consumer needs that we will unlock spending–especially from the buying power that will result from increased employment opportunities.
It is time to overturn the myth that the poor are somehow not relevant to our economic growth. In fact, their vast numbers, their drive to break into the middle class and their unmet need for quality goods and services make them the sleeping giant of our country’s economic stability. Investment in our poor communities means we not only can cultivate our country’s economic promise, but also awaken the vitality and idealism of the poor to realize their untapped potential.
This article was syndicated from Business 2 Community: Surprising Ways the Poor Are the New Frontier for Business Opportunities
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