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The Future of Innovation in an Inclusive Chicago

ALESSANDRO COCCO: I'm Alessandro Cocco, Vice President and head of the Financial Markets Group at the Chicago Fed. Today's event is part of a series of events called Project Hometown. My purpose is to bring together civic leaders, expert researchers, Chicago Fed staff, and concerned residents. Through these diverse perspectives, Project Hometown examines how our hometowns can recover from the pandemic, overcome longstanding inequities, grow stronger, and provide all people with the opportunity to thrive.

Today, I'm joined by thought leaders from the private and public sectors. So with me, I have Rodrigo Garcia who is Deputy State Treasurer and Chief Investment Officer of Illinois State Treasurer, Bevon Joseph, Co-founder and President of the Greenwood Project, Rumi Morales, partner and Head of Venture at Outlier Ventures, And Mel Williams, Jr, Chief Legal Officers at Chicago Trading Company. Hello, everyone.

The topic for today's event is the Future of Innovation in an Inclusive Chicago. We plan to tackle innovation and inclusion. To me, these topics are not distinct that, in fact, the purpose of this panel is to understand what we can do to ensure that as we recover from the COVID-19 crisis, we secure Chicago's global role as an innovation hub, but we also do so in a way that lifts up every community in the city and the district.

Today, we will address some questions, such as what industries will be the engines of innovation and economic growth in Chicago's future, and what steps can be taken to ensure all of the city's residents participate in the growth that innovative industries create. We're also going to answer questions that we have received from the audience during the registration process as well as some questions.

Today's event is being recorded, and it will be available on the Chicago Fed's website at chicagofed.org/hometown. We are also planning to release a recording of today's episode as part of the new podcast launched by my group, the Financial Markets Group, at the Chicago Fed. The podcast is called the South Street, and it's available at chicagofed.org/p ublications/lasa lle-street-podcast or by just searching online for Chicago Fed LaSalle Street Podcast.

Just as housekeeping, I'd like to remind the speakers to mute themselves when they're not speaking and unmute themselves when they're speaking. And now, I will turn to the panel. Let's start with Rumi. And, Rumi, please remember to unmute yourself. What industries will be the engines of innovation and economic growth in Chicago's future?

RUMI MORALES: All right. Thank you so much. Number one, just for this opportunity for all of us to speak on this really critical topic. I'm reminded, I'm actually almost up on my 10 year anniversary of living in Chicago, which is the longest time I've lived anywhere. And I also lived in New York, DC, Boston, Tokyo, Hong Kong, London, and Singapore, like the list is ridiculous. Right?

But I think it informs my answer on what the engines of Chicago's innovation and economic growth will be in the future. Because to be honest with you, I was a little surprised when I first moved here and heard the phrase Silicon Prairie as some type of aspirational moniker. Because to me, it should not be any city's current aspiration to be the next Silicon Valley because the attributes which made that area what it is are unique, not just in northern California, but also the time period in which it emerged.

And that was so different than our time today and our people in Chicago today and, especially in the middle of a pandemic, what our needs are today. So as I think about that perfect meaning of time and place together with the competitive advantages that belong only to Chicago and not New York or Boston or Tokyo or whenever, but what makes Chicago unique in terms of its industries, it's at that nexus where I think those innovation and economic engines exist.

So specifically, there is a lot of strong opportunity and momentum in transportation, distribution, and logistics, or TD&L as it's often called. Also, industrials and manufacturing, food and agriculture, and what I call digital plumbing and I'll explain what that is in a second. But these are industries that are historic strengths for Chicago, but also because of recent technology developments, things that are happening today, we're able to bring this right time and right place together with TD&L.

So getting more events, more specific here with TD&L, that we know that Chicago's geography makes it a major hub. But there's also great opportunity to leverage new technology trends in the localization of supply chains, for example. With industrial manufacturing, we're seeing a lot of strong momentum as these industries digitize and an ecosystem flourishes here. For those familiar with mHUB, our digital manufacturing incubator, there's just one clear example of the potential and success here in this area.

With food and ag tech, we're seeing tremendous opportunity with precision data, provenance analysis, predictive analytics, and digital plumbing which, for me, is kind of back office and infrastructure support for a lot of regulated industries whether that's around financial trading or insurance, legal compliance rag tag type of not sexy, but important innovation. Chicago's really a strong leader here. But on top of this, I have to add that TD&L, industrial manufacturing, food and ag, and digital plumbing, to me, will be the drivers of Chicago's growth because there are also some of the most inclusive industries in Chicago and they leverage more strengths than of entire city.

Many African-American, Hispanic workers are largely employed already in many of these industries. So we are starting with a strong base of diverse talent that is really knowledgeable in their fields. Now, I completely understand them, please don't take me wrong. We need to see more Black and Brown people in high tech jobs, clean tech jobs, and absolutely. But I personally feel that rather than making it the priority to bring underrepresented people to new technologies, why not bring new technologies to our underrepresented communities, where they are and where they work.

In this way, we can create a win-win where we bolster and upgrade our competitive advantages, positioning them for future growth, but at the same time, being able to upscale and empower the employees currently in those industries. And I'll close on this point. But as the current coronavirus has shown us, the pandemic has shown us, it is really hard to predict the future. Right? But we've also seen how quickly everyone has learned to utilize technology to transform the way we work.

So as challenging as it is, there is a time here, I believe, for Chicago to meet its moment. We will need to be incredibly bold to drive innovation efforts in these traditional industries because large scale transformation of old line firms is hard. We know that. But these industries are where our competitive advantages are. It's certainly where the tech is pointing. There is civic support and a strong ecosystem here growing up around it, and it's where our broadest, most diverse, and citywide talent resides. So that's what I have to say about that. Thank you.

ALESSANDRO COCCO: Thank you, Rumi. Thank you. That was inspiring. And now, turning to Rodrigo. Rodrigo, what do the business government and other sectors need to do to support continued innovation in Chicago?

RODRIGO GARCIA: Yeah, that's a great question. And good afternoon, everyone, who's taking the time out of your day to listen to this panel, and thank you again for the invitation. When we think about the impact of innovation and its impact on society, it's usually it's in relation to technology which, in effect, is almost embedded in everything that we do. From agriculture to transportation to financial services, technology is changing the way that we live our lives and interact with those around us.

This especially is true when it comes to robotics and artificial intelligence. Innovation is also helping in terms of jobs and economic growth. It is estimated that the world economy could more than double in size by 2050 due to technology-driven improvements. On top of this, it is estimated that more than 100 million jobs may be created by 2025. But all that said, in terms of the positivity of innovation, on the flip side, due to innovation such as artificial intelligence and robotics, millions of jobs are also on the line including in many aspects that will impact the Black and Brown community.

There is research that continuously shows how innovation is inextricably linked to a more positive rise or a sustained rise in living standards especially when we are looking at issues such as combating poverty and hunger. So to answer your question a bit more directly, we must work together to increase and facilitate the availability of investment capital across the board.

We must leverage our world class institutions that are here in the State of Illinois or the City of Chicago, like the University of Chicago, Northwestern University, the University of Illinois, et cetera, et cetera. We must leverage our national laboratories. We have two national laboratories in our backyard. It's not like there's 50 national labs across the US, there's only a handful, and we have two in our backyard. Argonne National Laboratory, Fermilab, as well, both in the western suburbs.

We also must leverage the strength of Fortune 500 companies that are here, whether it's Allstate or Kraft or McDonald's or MillerCoors or ADM or Grainger, Caterpillar, United Airlines, you name it, there is a number of Fortune 500 companies here that we can continue to leverage. And we must facilitate investments or continued investments in research and development to continue to increase innovation and technology that we continue to commercialize.

Now, with that being said, with innovation, we must address the inevitable inequity that will follow and that will result into the positive benefits of innovation must be experience by the broad masses. I often say that we must be the action that we seek. We must use innovation as a means to think bigger, not just in terms of the high tech areas of the future, but even some of our existing enterprises that continue to be underserved. And so we must increase access to investment capital.

We have seen that startups and small businesses in underserved areas are a powerful economic engine generating jobs and wealth where resources are scarce. Entrepreneurship is a potent tool enclosing long-standing wealth gaps. And as COVID-19 still continues to threaten and permanently shutter many small businesses and startups, it is important to consider and promote alternative and flexible sources of capital, whether it be traditional forms of debt financing, whether it's equity investments also known as venture capital, whether it's revenue-based financing, whether it comes from institutions such as community banks and credit unions, or whether it comes from impact venture capital work or CDFI's or NDI's.

We need to be able to increase access to investment capital. And then furthermore, we also need provide wraparound services to ensure that not only that we're helping these startups in many of these underserved areas to be a part of the digital future of tomorrow and ensure that they can scale, as well, to make sure that they have the relevant back-end processes to be able to continue to grow and to make sure that they're being provided with a high impact connection. Because it's not just about capital, it's also about customers that are going to be there to bring in revenue to many of this inclusive Chicago.

We need to drive change towards a free, just, and equitable society. The work is probably more important more than ever now. It takes a structured framework to facilitate change in such deeply rooted issues. These are critical dimensions needed to address some of the disparities and to ensure that innovation is one that is driven equitable. When business, government, academia, not for profit sectors come together, I believe we can design and apply policies, practices, and rules that can ensure that the benefits of innovations are shared by everyone.

ALESSANDRO COCCO: Thank you, Rodrigo. Now, let's go back to the private sector perspective, and I have a question for Mel. So what steps can be taken to ensure that all of the city's residents participate in the growth created by innovative industries? And how can we measure success? And how can we hold ourselves accountable on this dimension? Mel?

MEL WILLIAMS: Yeah, thank you for the question, and good afternoon to everyone. I think we really start at the very beginning about if we really mean everyone, then we have to actually mean everyone. I think what this pandemic has shown, in a probably very overused phrase with apologies to Dickens, is that there is a tale of two Chicagos. The pandemic has not only affected different parts of our city depending on where you live, it's also affected-- it's dissymmetry of the health disparities. It's affected where you've lived, but it's also paired with a different pandemic.

We talk about this being COVID-19, and with apologies to Reverend Moss who has used this phrase, there's also another pandemic that we have seen and that's COVID 1619 that is talked about exposing the inequity that's here. And so if we're going to make these innovations work, and if we're going to be holding ourselves accountable, they've got to be innovations that support every child, every business, every neighborhood, every hospital no matter where it is in the city.

And how do you get there? That takes really three things I think. One is being very intentional about making sure that the innovation and the technology that we're using, as Rumi mentioned earlier, bringing it to the people. We have to be intentional about making sure that we are bringing communities together, that it shouldn't depend on what your zip code is to whether you're going to benefit from these innovations and this technology and closing the gap between the two Chicagos. Right?

So it's engaging with these communities, asking what they need, listening, and partnering with them as opposed to coming in and assuming that we've got all the answers. So being intentional is one important step. The second is being transparent. It's engaging everyone and being very clear about what can be done, what can't be done, where things are falling short. And that leads to the very, very easy third item is being accountable.

Not only should we be intentional, we should be transparent. We should be accountable about where we're coming up on these results and where we're not and whether that's a grading system, the way that some federal contractors use about how often they are engaging women and small owned businesses in their contracting efforts, there's a grading system that Small Business Administration uses, whether that's something that can be adapted. And it's really focusing on those three things. Making sure that we're intentional, being transparent, being accountable.

Holding town halls throughout the various communities where people have the opportunity to participate in not only helping to engage and close that gap, but also, being an opportunity to talk about the transparency and providing an opportunity for accountability. Now, we've been talking a lot about technology as we have been having this discussion.

But before I stop and I'll be happy to answer other questions, I might dare say that the real innovation, the toughest innovation, and the most important innovation that's going to make the difference as to whether Chicago becomes that city that we all know it can be, and is the reason that we all have moved here or have stayed here or live here, have embraced it. Sure, technology is a part of it, but I think the real innovation is going to come from how we see each other and how we engage with each other.

The real innovation is going to be in how people come together as one Chicago and how we close this gap so that it doesn't matter what zip code you're in or what neighborhood you're in in the city, this is a city that works for you, and it's a city where you can benefit and be your best self.

ALESSANDRO COCCO: Thank you, Mel, much appreciated. So now, to continue on the perspective offered by Mel and the other speakers, I turned to Bevon Joseph. Bevon is actively dedicated to ensuring that we have a diverse pipeline of talent. So this question is particularly relevant to his expertise. How can Chicago's businesses and government agencies attract and retain skills and talent on all seniority levels? Bevon?

BEVON JOSEPH: Yeah, thanks, again. Thanks for having me today. I appreciate it. And Mel actually touched on a lot of the things that I agree on 100%. So Greenwood, just a little context, we are laser focused on developing a diverse pipeline of talent, Black and Latinx, and in particular, the financial industry and fintech. We target Black and Latinx individuals who are totally disconnected, lack the social capital. They're not connected to the industries at all.

We also help companies realize that, at the end of the day, they have to realize that not everybody knows who they are, not everybody wants to work for them. Right? So that's an assumption a lot of firms make, and they wonder why aren't we able to attract any diverse talent? Why aren't they applying? And also, I hear all the time, why can't we find more diverse talent? So my job and Greenwood's mission is to go out and find these individuals and get them ready and present them to the firms.

So I think companies actually need to ask themselves a question, as well. Are we being intentional enough like Mel said? Are they doing enough to attract this talent? And what I've seen in my experience is attracting talent and diverse talent, in particular, comes down to education. Are we educating people about who they are? These firms, their values, what they stand for, and why should I be interested in working for you? Right?

So one thing I've seen with Greenwood Project is we bring companies from downtown to the South Side to the West Side, like Mel said. We are bringing those communities together who, in the past, have not interacted with each other. Right? And that benefits everybody all around. So one practical example I can give you, and this is something I see all the time. I meet so many young people, and they only think of about financial companies as the ATM down the street. Right? They're talking about Chase, Wells Fargo, Bank of America, and so on.

They don't know at these same companies there are career opportunities for them, such as investment management, investment banking, PWM, trading, fintech, you name it because they don't know. Right? So at Greenwood, we like to say students can be what they can't see. So companies need to, again, be more deliberate about building a diverse pipeline of talent to attract these individuals. And they also have to understand, and this is a conversation I've been having a lot this summer given all the moment the country is having right now, don't expect to see a return on your investment for a few years. Right?

So keep in mind a problem that is an opportunity problem that needs to be solved, opportunity cap. Right? And the individuals I work with, they're not starting from the same place. We have to make up that education, that exposure, that opportunity, and that's very expensive work, that takes a while. Right? We're talking about systemic issues that's been going on for centuries. So we try to get ahead of that problem and companies now, again, it's sad that the country had to experience this to get them to this point, but we're here and we will take advantage of the moment that we have them at the table and we have their attention.

So again, this is not a problem that can be solved in one recruiting cycle, it will take a couple of years. For that reason, we've seen a lot of firms partner with us now for like three to five years, not just one summer anymore. And when it comes to retention of skills and talent, many times, that comes down to employees feeling like they belong, that there's a place for them, there's opportunities for them to advance at another firm.

A lot of people I speak with, people of color at companies, and again, there's a saying that people of color, there's no pipeline. All they do is go from firm to firm, up and down LaSalle Street which is true because you don't feel like you belong if you don't feel like there's a place for you to move up there. You kind of just jump around. Right?

From a DNI perspective, I feel like firms need to do more to make individuals feel like they belong and to show them a path upwards or across or wherever that is. So they feel like there's opportunities for them, as well. Put them in a position to take on projects and that kind of stuff and be noticed. Put them in a position of leading things that have a direct impact on the bottom line of the firm. Let's be honest, that's what gets noticed. Right? How are you adding value? How are you contributing to the P&L, just on revenues and stuff like that.

And again, I deal with a younger demographic in Chicago here and other cities, and they don't want to work for a company that doesn't stand for something, especially today. Right? Especially at this moment that we're having in not just Chicago or the US, but the world is having. And of course, all this doesn't even work unless a message doesn't come from the top down. Right? Greenwood has grown exponentially over five years. The only reason for that is because when I meet with individuals at firms, I'm meeting with senior management, managing directors, the C-suite folks who send the message from the top down. That's the only reason this works.

At the end of the day, I think it comes down to social capital. And I think companies, not just in Chicago, but across this country have been leaving a lot of talent on the table and not tapping into the individuals who are in areas of the city or the country that they typically don't go looking for that talent. That's where we find all the talent. So again, we feel like there is no lack of talent, there's just a lack of opportunity and exposure. And the future of work in Chicago, in particular, can be super bright if more and more from realize that, as well.

ALESSANDRO COCCO: Thank you, Bevon, much appreciated. And I'd like to remind our viewers and our listeners that all of our speaker's bios are available on our website so you can read them again and remind yourself of the different perspectives that are represented here. And our website, again, is chicagofed.org/hometown. So now let's turn to some of the questions that we received, and the first question we have, I'd like to pose to Rumi.

And it really builds on what Bevon was talking about. And I guess kind of turning from the pipeline to a even broader perspective of ensuring that once people do receive opportunities, they can leverage them. So thinking about the middle as well as making sure that opportunities arise and everyone can grow. How will we ensure that people disconnected from the labor market are not left behind in the future of work?

RUMI MORALES: Well, I think as this pandemic continues to humble us, we can all safely say that we have no idea really what the future of work will look like for everyone. As we're all here Zooming or Cisco, I guess, Webexing with each other right now, how much longer will this last? Will we continue to have distributed teams? Will we return to offices? Will there be more project based consulting gigs and whatnot? And we can rattle off these questions for ourselves, but I think we also have to know that those questions are only affecting a portion of the overall working population.

And if we're going to talk about the future of work writ large and to be disconnected from the labor market, we're probably talking about being disconnected from technology and technology opportunities. It's proving itself right now as we're on this Cisco Webex together. So to connect people, then, into the labor market, we really need to bring them over onto the opportunity side of the technological divide. And that is just incredibly challenging right now with the current situation that we're in.

We know, as Bevon was just saying, how much work is involved? This is not going to happen overnight. And right now, there are immediate actions that need to be taken for our community where one in three jobs in Chicago is threatened and a tragic portion of those job losses are being suffered by the African-American and Latinx communities. Earlier this year, Mayor Lightfoot, she convened a Chicago Recovery task force. I don't know if anyone had a chance to look through that report which was published in July.

But it had some several recommendations to address job losses and recovery for the future, such as reimagining the region's workforce infrastructure and doubling down on things like short term relief programs and strengthening short and long term worker benefits. But I think that will just get us back onto our feet with no real design on how to walk forward from there. And that's really about empowering people, giving them opportunities, I feel, regarding technology and technology chance. So how does that happen?

And I think Mel had touched on this, too. It needs to be incredibly collaborative. We need to establish, even formalize, a lot of workforce collaboration across industries that also include educational institutions, unions, and workforce development to address that future talent means are inclusively and equitably shared.

So for specific examples, and I apologize, I'm not a government person, and I wish I knew how to adequately and effectively implement all this stuff. I personally would love to see ways to include embedding STEM education early, earlier among the underrepresented groups, upskilling incumbent workers, providing support for job retention, and developing expanded workplace programs with a focus on technology.

I don't know if anyone watches or seen that movie with Charlie Chaplin, Modern Times, which has done so many years ago. And you can see him on the factory floor, and he's confounded by it. But the technology changes along the way have gone hand-in-hand still with people being able to work in jobs that they understand, just their tools will be changing. We need to be able to provide them with the right types of tools, in this case, understanding and access to technology.

Ultimately, it's almost like a cradle to grave or more like kindergarten to retirement tech access learning and opportunity across one's education and career. I have no doubt this would be very time consuming, probably expensive, but completely worth it. Right? It will require this entire community of us to collaboratively work together to achieve. And it's no easy lift, but I think it can be done.

ALESSANDRO COCCO: Thank you, Rumi. My next question is, again, a question from the audience, and I'd like to ask Rodrigo to address it. And the question is, how do we make funds available to a community population that is being kept from having the equity positions or credit worthiness to play a role in the development of underserved areas when the population doesn't have even the means to take advantage of any resources that the system creates for brick and mortar repair or build out for these areas? And those who do take advantage of these opportunities, often, are not from the communities in question.

RODRIGO GARCIA: Yeah, that's actually a great question. Decades of disinvestment and undercapitalization have left entire communities vulnerable and marginalized. Black and Latino owned businesses comprise about, I believe, like 8% to 10% of total business owners with employees in Cook County. Yet, together, they make up nearly 60% of the county's population. As a group, Black and Latino business owners have not participated fully as members of Chicago's entrepreneurial ecosystem nor have they enjoyed the fruits of Chicago's small and medium sized business economy to the same extent as, say, their Caucasian counterparts.

Based on recent reports that I've read over the last several months, Caucasian entrepreneurs attract 17 times, 17 times, more equity capital than Black and Latino entrepreneurs nationally. Now, here in Chicago, it's a very similar reflection as those experienced at the national level. I want to say about 80% of Black and Latino entrepreneurs that have their equity capital needs go unmet compared to about 45% of their Caucasian counterparts.

There is about a gap of at least 150 million in terms of the supply and the demand of equity capital. I'm being right now very specific to equity, not loans, but equity capital among Black and Latino entrepreneurs. There are just too few equity capital providers of scale that are focused on entrepreneurs of color within the city of Chicago that are providing this type of capital.

If you think about it, usually, what's known as a friends and family round or friends and family support in order to get your business off the ground is even much more difficult for Black and Latino communities due to lower levels of intergenerational wealth that is found in Caucasian communities. Not to mention, some of the cultural stigmas and risk and tolerance that is also involved in asking and investing money in these communities.

And that is why we believe that the benefits of addressing this gap and access to equity capital are clear and measurable both in terms of job creation, wealth building, and an opportunity to shape a more equitable and robust and even resilient economy that is built on inclusive growth, especially as we recover from the loss of life, obviously, and the economic impact of the COVID-19 pandemic.

On top of that, there is also meaningful upside in terms of the opportunity set for those who are willing to invest in overlooked, and often undervalued, assets of communities throughout our region, and much more specifically, within the confines of the City of Chicago. I said earlier, but we believe entrepreneurship is a potent tool alongside education in closing the wealth gap. That is why we have initiatives in the pipeline to make equity investments in marginalized and underrepresented communities in Chicago.

This is our continued push toward increase in economic equity to broad swaths of Chicago, not just those parts of the city known for their entrepreneurial bonafide. If we know that there is already a significant gap when it comes to, say, venture capital for Black and Brown founders. And these are individuals who have privilege, the privilege of certain degrees from well-known universities, imagines the barriers that our entrepreneurs out in the South and West Sides experience that may not have access to that same privilege.

It is even much more when you overlay the socioeconomic status alongside that of race, ethnicity, and gender. So stay tuned for an announcement tomorrow for what we plan to do to provide equity investments in the South and West Sides of Chicago. This will only be reinforced by additional initiatives in the pipeline that will be released in the ensuing weeks and months that will allow us to augment business loans for the Black and Brown and low-income in Chicago and in the broader state of Illinois, so just stay tuned.

ALESSANDRO COCCO: Thank you. Thank you very much, Rodrigo, and it's great to see that we can look forward to some proactive steps, actionable steps that you and your team are taking to ensure that we address some of the issues that we are discussing today.

Now, moving on to Mel for his perspective, we have a very similar question. So we received a lot of questions along these lines understandably. And so the question for Mel is, how can low-income entrepreneurs who have a bad credit and very low household income get inclusive opportunities from financial organizations like low-interest rate loans so that they can develop a business of their own with the support of grassroots community organizations as their business mentors? Mel?

MEL WILLIAMS: Sure. Thank you. Thank you for the question. And I promise I'm going to answer it, but I do want to pick up a thread that was put down earlier because I think this is important. We talked earlier about making sure that we're closing these gaps and bringing technology to people. There are examples of some of this already going on now. And one of the things that we can do is also lifting up and amplifying those things that are already working and already happening.

I think Rumi mentioned the mayors report which is something that I'd commend everyone to read. There's a lot of good stuff in there that can be lifted up and amplified. One example I'd like to share is what the Chicago Botanic Garden is doing over in Lawndale where they have actually created something called the Farm on Ogden which is basically growing local food, teaching hydroponics.

And they've entered into a partnership with a vegetable prescription program where they're addressing not only food insecurity through food that's being grown there locally, but also some of the medical health gaps by having prescriptions for fresh, locally grown fruits and vegetables that are being grown right there in Lawndale. And they're partnering with one of the local organizations in Lawndale along with the Chicago Botanic Garden.

So again, taking innovation, bringing it to folks, and bring it right to where it impacts them in their communities and where they live, critically important. Now, for the question that was asked. In a prior life, I spent some time as the general counsel of the Small Business Administration. So I'm going to talk a little bit about them, but the model that I'm about to lay out that is used in the SBA at the federal level is replicated at state and local government level, as well, and they're are also non-profits that link arms here.

So to the people asking this question, there are resources out there. So let me talk a little bit about the SBA that really does three main things. They provide loans, counseling, and contracting. Those are really the big three things that they do. And in terms of loans to the people who may not be a great credit risk, one of the powerful things that the SBA does is they provide loan guarantees to encourage banks to take that chance, to take that risk on that next great entrepreneur or person has got this wonderful idea by giving them that guaranteed loan and helping them get their business started.

So that's at the bank level, but there are also community organizations called Community Development Corps that actually also provide loans to small businesses. So there's the loan aspect guaranteed, backed by the full faith and credit of the United States government tax dollars going towards that. But it's also the counseling component of what the SBA and other organizations do to help people be business ready, anywhere from how do I write my business plan to how do I take this idea in my head and get it into something that is now bankable or that is now someone is willing to provide a loan for.

The third thing is in contracting where the SBA has been pushing very hard to make sure that a certain percentage of every federal dollar of all federal contracting dollars are going to women and minority owned businesses. And we had a question earlier about how do we make sure we hold people accountable. One of the things that the SBA does is they publish a report card every year, every federal agency and where they are on their contracting spend with minority and women owned businesses.

And I can tell you from past experience, no secretary of a cabinet likes to get a C or D or worse grade on this. It is a bit of a name and shame. I'll be candid, there's not an enforcement mechanism behind that to make agencies do better. But the pressure and the acknowledgment that they are falling behind often works a lot better than any particular enforcement. And so again, what the SBA is doing and what their counterparts throughout the State of Illinois and the City of Chicago and Cook County and elsewhere are leveraging those three essential elements.

Making sure that people have access to capital, making sure that people are ready to be banked, and find a contracting opportunities for them whether it's with the federal, state, or local government. So I would commend-- and the other thing is, look, a lot of that stuff on the SBA website is completely free. There are plenty of tutorials, and I know that they have counterparts at the state and local level. There are tons of free resources readily available at a click to be able to get that and also references to very partnering organizations that can assist.

I think the last thing I'll talk about is something that we've learned from other communities, and that's the entire microfinance angle. And it was touched on earlier, I think, by Rodrigo where communities come together and they help fund one another, they help finance one another. And these are not huge dollar loans. Sometimes, it's just for one piece of equipment that may help an entrepreneur get started, but that is yet another angle that can be a means of access to capital.

ALESSANDRO COCCO: Thank you, Mel. So my takeaway from the points that you were making and the points that Rodrigo was making, so I think about the range of opportunities that are available, often, with free great resources. So from the perspective of equity investments, but also financing via through the SBA or through microfinancing. And then I think the point you made about food insecurity is a key one. And having access to healthy food should not be a luxury, it should be a basic point where nobody should be left behind.

So I think all of the initiatives you've mentioned are extremely important. And now, building on the comments by Rumi, Rodrigo, and Mel, going back to Bevon, thinking about the higher education aspect. Of course, education plays an extremely important role in this framework that we're building. So, Bevon, how can universities be leveraged to help improve an innovative and inclusive Chicago?

BEVON JOSEPH: Yeah, thanks for the question. And that kind of plays directly into our model that we implement every year here in Chicago. And in my opinion, and I get into this discussion with a lot of academics all the time, I think universities need to do a better job of connecting the classroom to the real world. I think what I see in practice every day with Greenwood, and I talk to a lot of HR managers a lot of head of recruiting and stuff like that, and they said, listen, these students are really smart, doing well in school, but nobody's teaching them how to be at work. They have no idea.

And there's a study that comes out every year by LinkedIn around talent trends. And the most important part-- the most interesting part of that 2019 study was in today's world of software engineering, ever more technology, soft skills is what employers want. 91% of the companies in the study cited this as an issue, and 80% of the companies are struggling to find better soft skills in the market. Right?

So colleges-- and this is something I actually spoke to three Chicago schools about just a couple of months ago. And we proposed to them, like, listen, a lot of students, especially students of color in Chicago and the African-American community in particular, leave the state to go to school, they follow the money pretty much. Wherever they're getting the most money, that's where they're going to go to school. A lot of them would prefer to stay here.

And my proposal to them was, listen, I have access to 50 plus high school juniors and seniors every summer, and that number is when go to 76 next year. And that's going to continue to grow every summer. These are students who are looking for colleges to attend. They would love to stay in Chicago. Why don't we do this? Why don't I pipeline them into your college. You leverage all your corporate relationships, all your donors, all your alumni who are at firms here in the city to give them a meaningful career experience every summer. Right?

So these students, again, keep in mind where they're coming from. We only work with students who come from under-resourced communities in Chicago. So the need to make money. They need to be able to afford to go to school. And they need to learn how to enter the workforce through internships, apprenticeships, and all that kind of stuff.

So my proposal to these colleges was, yes, we will work with you to bring more young people to your college, but we want you in return to give us access to all your corporate partners and guarantee, don't just say to us have your kids apply and hope to get in. Right? Because for example, I'm focused on fintech, financial services, and get through the interview process at an investment bank is really hard for someone who comes from privileged already, who has access or who is familiar. Think about how challenging that is for somebody who's never been exposed to this all before.

So what companies are doing for Greenwood right now is guaranteeing internship positions for us, our young people, and trusting us to go find the right talent, educate them, get them ready, and bring them to their doorstep ready to go. So again, colleges and universities play a huge part in that, but I think when it comes to Latinx and Black students, in particular, there's even more work that needs to be done. So what Greenwood does is we go after the students who don't show up to career fairs. They don't have a resume. They have nothing to wear in professional attire. Nobody's told them how to network before. And they don't know who these companies are.

And even though a lot of friends might show up at these career fairs and the line might be out the door to come see them, the line is much longer for students who don't know they are, and who needs again that deficit made up. Right? And that's what we are focused on. So a lot of companies, they're all fishing from the same pond really, when it comes to trying to find diverse talent in particular, we are going after the students who they are not looking at or that's not on their radar at all.

So I think colleges have a lot of work to do. I think they are way behind right now because, again, the pace of technology, the pace of fintech and all this stuff that's going on is far outpacing the kind of just curriculum focus only that colleges have. I think there has to be more collaboration. And again, they also have to be innovative when it comes to figuring out ways to attract more diverse students, the students who could really benefit from their education. Because remember, there's a ripple effect that's going to happen there. Right?

If you can help Black and Brown students stay in the City of Chicago for college, partner them with companies to get internships every summer, that's the future workforce right there, from Chicago born and raised, educated, and will be employed here. So I think colleges, universities have a lot of innovation themselves they have to kind of think about. Again, we are partnering with DePaul, University of Chicago, and some other schools, and they're kind of seeing how our model works and they're getting behind it.

But I think colleges and universities have a big, big part to play in a more inclusive Chicago. And again, the students are out there. We just need to connect the both sides and kind of make it work, I think.

ALESSANDRO COCCO: Thank you, Bevon. So continuing on the questions that we have received, going back to Rumi for the perspective from the corporate world. So when it comes to corporate innovation, do you believe that innovation should be practiced as a mindset and a core value for the organization as a whole or should one employ a specialized team within an organization? And the concern here is that making sure that innovation is not only a formal core value, but something that's actually put into practice. Rumi?

RUMI MORALES: Sure. Yeah. I don't know if I'm fortunate or unfortunate to have given 14 years of my life to large financial institutions at CME Group and Goldman Sachs. But I was lucky to kind of be like an intrapreneur in both firms where I helped to launch and lead new initiatives. And so that will inform some of this answer. But also, I was one of the very few women in my field and an ethnic minority, as well.

So when I think about this question of innovation and corporate approaches to it, I'm also reminded of corporate approaches to diversity. I think it's kind of similar here. When it comes to corporate innovation, I feel that whether it's stated at the top as a core value or it's championed by an internal innovation team, people will say they support it just like people usually say they support diversity initiatives.

But I feel if it's not a mandate that's tagged to each business unit's bottom line or a performance review, it just likely won't be as effective. I think one of the challenges with implementing a firm-wide mandate on innovation is for some people, innovation can seem threatening. The word is often used in very extreme contexts like innovate or perish or people feel like if they don't innovate, they're a dinosaur or a has been. And that can really breed some negativity.

And again, it's not unlike diversity where if there's a corporate push to employ more people different races or genders and gender identities, there are some other people who can see that as a threat to their own identity and almost push against it. And this, for me, is also magnified when there is a separate innovation group as a result from the rest of the organization. That separate group can seem coddled or it's like not doing the real work of the firm or it's a cost center.

Personally, I've experienced that, but similarly, just like diversity, I've also just hated it when you've got one HR person who's the diversity guy or the diversity girl as opposed to everyone in HR having that mandate and then making sure that every business unit and every person in the organization is employing people, is working with colleagues, is thinking about hiring practices with diversity in mind.

So no, again, I really feel like with innovation and diversity, it needs to be tied to business unit success metrics, ideally tied to compensation. We need to take some of the Darwinian angst out of the word. So instead of saying you need to be innovative, to say just creatively find improvements to your bottom line or demonstrate resourcefulness as you drive revenue. It's kind of the same thing. Just like hire the best people, hire people that you know will bring different and varied ideas to your job. Search outside your comfort zone for those ideas that you seek.

And I think if you catch it, less it's sometimes a buzzword, but extracting the real tangible value that it provides, that's where you'll see, I think, more effective impact with both innovation and diversity in corporations.

ALESSANDRO COCCO: Thank you. Thank you, Rumi. That's truly inspiring. And I think we have just time for a few concluding remarks from our other panelists. So I'll turn it over to Rodrigo for his thoughts.

RODRIGO GARCIA: Yes. Well, I would just say this. Ultimately, opportunity and innovation is going to be driven by the availability of talent capital, as was alluded to earlier, investment capital, as it was alluded to earlier, the idea, this whole notion of the value proposition is, like, what is your thesis in terms of how you're going to be able to leverage that idea into revenue and then this whole notion of innovation. And to a lesser degree, some of the public policies but knowing that they also make a play.

So as we are thinking about the future, it's not only what types of actions and decisions or policies that we can promote and implement in order to foster innovation and the technology that will underpin the future of our work, but also to ensure that that technology is available to our communities in a equitable way in terms of privacy protections and data and so forth. But also, to ensure that the fruits of innovation are shared by those who, for far too long, have been left on the bench and who have not necessarily enjoyed the upside that innovation has provided, we'll say, for others over the last 20 to 40 years. With that, I think I'll leave it there.

ALESSANDRO COCCO: Thank you, Rodrigo. Mel?

MEL WILLIAMS: Look, I think it's everything has been said but not everyone has said it perhaps, so let me try. One, thank you for the opportunity to be on the panel, and I really enjoyed being with my fellow panelists. They are amazing. I would suggest that we think about this. We have been in this pandemic for seven months or so. And after we've perfected our sourdough recipes and come up with all of our different attire that we wear on Zoom calls from the waist up and the waist down, we will come out of this pandemic.

And I think the question really is we're going to look back and we ask ourselves, what did we do with this time? And how are we going to come out of this pandemic? Are we coming out better? Are we coming out the same? And what have we learned from this very unusual, perhaps, only once in a century experience? And I think as we've been talking about what's happening with Chicago and the passion that I think the people who are on this panel, but also the people who have tuned in, have for wanting to see a more innovative, a more diverse, a more inclusive, a Chicago that works for everyone, regardless of zip code, well, this is our opportunity.

And every action that we're taking, whether it's where you're hiring, where you're sourcing your talent from, where you're going to focus your dollars on in terms of your budget are all decisions that we make as individuals and make as companies as to what type of Chicago we want to see and what type of Chicago we want to have, whether we really are going to be this innovative and inclusive Chicago.

So the time is now, the opportunity is now. We are the ones that we're waiting for to quote Rodrigo's point earlier. And I hope that when we look back on this, we will have made the most of this opportunity. It's weird to talk about a pandemic as an opportunity, but there is an opportunity here. And it's up to us as to what we'll make of it.

ALESSANDRO COCCO: Thank you, Mel. And, Bevon, over to you for your concluding remarks.

BEVON JOSEPH: Yeah, definitely. And again, thanks a lot for having me today. Appreciate it. When I think about the future of work and the theme today, COVID-19 has really accelerated a lot of the digital transformation that many firms were already doing, undertaking before the pandemic. But I also think, in many ways, it's both leveled and exposed a lot of stuff on the playing field. Right?

So technology is great. It's not so great for the folks who weren't exposed to it as much before. And because it really shows that there's a lot of work to be done to get communities up to speed and again of the future work, and if we're going to be in this virtual world for a little bit, there's a lot of changes that need to happen on the companies and communities and government.

One thing I'm seeing is our young people in Greenwood have been able to quickly adapt to technology, which is great. There wasn't much handholding that was needed there. But many didn't have the technology to participate. So we had to go out and raise money and get companies to donate laptops and bring out internet access. We had to do all that stuff. I worked with 80 young people this summer, but there's hundreds of thousands of them out there.

Again, like Mel was saying, we at Greenwood, we've actually found a lot of opportunity in the midst of all this chaos, again, given our mission and our purpose and all that stuff. So we're going from 80 students to probably almost 200 next summer in multiple cities. So again, it's sad that we've had to endure multiple pandemics to get to this place, but it's going to accelerate the number of students that we can help get into financial services, fintech, and other industries. And we'll start to do that outside of Chicago, as well, in 2021.

So I think we have been able to find the silver lining in the middle of all this chaos and stuff. And the most important thing for me is I have the attention of some firms here in Chicago and other cities as well, and it's bringing them to the table to have a very serious, long overdue conversation around equality opportunity and closing the opportunity gap which we focus on, as well.

ALESSANDRO COCCO: Thank you, Bevon. And thank you to all the panelists. I know that we cannot solve in one day the difficult problems we all face, but I hope that this panel helped highlight some of the issues and some of the possible practical solutions. I would like to take this opportunity, once again, to thank each panelist for their insights, and also thank our audience for the thoughtful questions.

With hard work and determination with an eye on innovation and a firm determination to make sure we are a more inclusive city going forward, I hope that we can take meaningful action to implement lasting change towards a more inclusive society. That concludes today's event. Thank you very much, and I'll see you next time.

MEL WILLIAMS: Thank you.

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