Apr
17
Class #22 – Technology and Entrepreneurship – Mohd Sakib
April 17, 2015 | Leave a Comment
When technology is discussed in relation to economics and income, it is usually frowned upon due to the many ways it increases the income inequality gap within the United States. Critics focus on the argument that only small groups of people benefit financially from innovations and technological advancements, whereas supporters argue that the wealth and benefits made from technology is eventually distributed back to society. Indeed, both technology and globalization have contributed to a great divide between lower-middle income classes and capitalists who reap profits from various inventions and the labor systems that are derived from these machinations. Recently, in fact, we read about innovative scheduling technologies implemented by large corporations such as Starbucks and McDonald’s, which increased profits and cut costs at the expense of the employees.
Having this perception already instilled in mind, I was surprised to read the NY Times article “How Technology Could Help Fight Income Inequality” by John Hersey. The author proposes unique solutions as to how technology can actually reduce income inequality. One of the propositions that I thought was both realistic and helpful was cheaper online education through various alternative-learning services such as MOOCs. Developing fundamental skills such as these at a relatively cheap or no cost at all can possibly lead to better jobs and income mobility. Another realistic suggestion that he put forth was that since our world is becoming increasingly more focused on computers and programming, our youth will obtain more technical skills and be accustomed to the digital world, unlike generations before them. This again can lead to more jobs, or even better, more businesses/start-ups that will uplift the poor. Some of the propositions however, seemed a bit idealized or unrealistic, such as workers obtaining more jobs with smart robots due to the need for human assistance, or medical diagnosis through artificial intelligence. I don’t necessarily see those options as viable solutions to alleviate income inequality, but nevertheless, more policymakers and entrepreneurs should have Hersey’s approach to help increase income mobility.
The “Launching Low-Income Entrepreneurs” report by Kahliah Laney, Jonathan Bowles and Tom Hilliard provides excellent commentary on how entrepreneurs can possibly serve as a closure to this income inequality gap. Even though it seems that entrepreneurship may be a great vehicle to escape one’s social and income class, the report shows that many low-income New Yorkers are not actually taking the risk. I’m not really surprised by the findings however, since it takes a considerable amount of risk and capital to start a business. But building businesses can be a path to economic betterment within low-income communities as “massive numbers of immigrants in New York, Boston, Houston and Los Angeles have turned to entrepreneurship and in doing so have transformed neighborhoods as well as their own economic fortunes. Some of these entrepreneurs have been wildly successful, generating numerous jobs for their communities and significant financial rewards for themselves.”
It does seem that more foreign-born immigrants within NYC are more self-employed than native-born residents. In Queens, NY for example, the self-employment rate was 11.5% for foreign-born residents whereas, only 6.3% of Native-born were self-employed. These statistics accurately show the trend of how immigrants come over to this country and immediately developed businesses to support their family. This was the most logical step to take, as education was probably unaffordable or not directly accessible due to language barriers. I have experienced this chain of events in action because when my family arrived to this country, my parents worked incessantly for about 20 years to develop a chain of businesses in downtown Manhattan to support us. Our stores provided jobs to our community as we hired other immigrants from Bangladesh who came here looking for work. Additionally, my family business has been able to support me up to adulthood, where I along with my siblings are obtaining college degrees to achieve successful careers. We hope to climb the income ladder ourselves, and so, I now truly understand the domino effect that entrepreneurship can have on closing the gap of income inequality.
Indeed, “The evidence that income inequality in the United States has been growing for decades and is greater than in any other developed democracy is not much disputed.” Instead of having Republicans and Democratics throwing around the word ‘income inequality’ for political points, concrete plans need to be organized and actually implemented for real to change to transpire. Technology and entrepreneurship may be viable options for this kind of change, but more analysis and think thanks must be formed to understand how these vehicles can lead to income equality. But these responsibilities cannot solely lie upon immigrant and native-born entrepreneurs. There must be a collective reform on part of Congress, business owners, and CEOs of large corporations among others who are at the helm of economic machines and systems.
