Diversity, it turns out, is good for business — especially at innovative startups.
A 2018 McKinsey report found public companies in the top 25 percent for ethnic and gender diversity are more likely to outperform their peers.
Another study by the Boston Consulting Group also found that diversity increases the bottom line for companies. That 2018 report showed that companies with more diverse management teams have 19 percent higher revenue due to innovation.
Further research bears out the notion that businesses that establish diversity practices from the beginning foster corporate cultures that are open, inclusive and innovative.
These findings are huge for San Diego business startups, tech companies and other industries where innovation is key to growth. They show that diversity is not just a management hiring metric, but an integral part of a successful, sustainable, revenue-generating business.
And while ethnic and gender diversity are clearly correlated with profitability, the latest U.S. Census data shows that minorities and women do not account for their proportional share in the economy, in part due to being underemployed and lacking access to more mainstream resources needed to start and grow their own businesses.
Entrepreneurs and their ventures have huge impacts on the social, political and economic well-being of our local communities and regional cities. But launching a new business has its own challenges and risks. New business owners and startup founders might have courage and passion, but usually lack know-how, skills, networks and funding. Due to limited resources, more than half of new business in the U.S. fail within the first five years of operation.
Fortunately, the City of San Diego, Jacobs Center for Neighborhood Innovation and CONNECT have decided to do something about this resources gap by launching a diversity-focused business accelerator right here in San Diego. Dubbed CONNECT ALL @ the Jacobs Center, it is focused on giving ethnically diverse and financially disadvantaged entrepreneurs the mentors, networks and other vital resources they need to compete in business today.
This new venture has set itself an ambitious target: to find the best innovators in San Diego, no matter their color, culture or socio-economic background, and provide a supportive ecosystem.
The bustling and diverse Diamond District in Southeastern San Diego is an apt location for this accelerator that strives to harness talent that’s hidden among our city’s many communities, including entrepreneurs and new business owners from underrepresented neighborhoods from within the City of San Diego.
We need to make the extra effort to bring them into the pipeline. Ultimately, that’s what we’re here for — to get the best, brightest and highest impact startups from every background and experience level together with mentors, investors, academia, government and other strategic partners to build strong relationships and businesses.
The great opportunity for San Diego is the incredible synergies that happen from different kinds of people connecting with one another. By growing local businesses from small and finite to being diverse and inclusive by nature, we can create opportunities for higher paying jobs and generational wealth in neighborhoods that literally haven’t existed before.
That’s a driving force for us — and an economic driver for our entire region.
We ultimately know that employers of tomorrow are people with startups today, dreaming about something big. And as they successfully execute those visions, that is when we will see more jobs, more diversity in our businesses and more robust revenues for distribution throughout all communities and sectors of our local economy.
Because, as it turns out, diversity is good for business.
Reginald Jones is the president and CEO of Jacobs Center for Neighborhood Innovation, a nonprofit organization serving as a creative catalyst and incubator for revitalizing Southeastern San Diego’s Diamond neighborhoods. Greg McKee is the president and CEO of CONNECT, a San Diego-based nonprofit business accelerator that links technology, life sciences inventors and entrepreneurs with resources, networks and capital.