Call it the problem of the middle—the middle states and the middle class—two groups that have struggled with problems that, while they are inexorably linked, are different all the same.
Historically, most of the venture capital in America has been active on the coasts, leaving a vast portion of the country without seed money for innovative new startups. At the same time, the Midwest has suffered from a loss of manufacturing jobs and, as a result, has in some ways failed to flourish in the same ways as other parts of the country. And, of course, there is no shortage of news articles outlining the many struggles facing the middle class, in general, in America.
“We live in a fractured society,” argues MIT economist Peter Temin in an MIT News article on America’s two-track economy. “The middle class is vanishing.”
According to Temin, America now features two sectors: an FTE sector, where people who work in finance, technology, and electronics tend to thrive, and a low-wage sector, where workers often struggle. The middle class, traditionally an area of national strength, is starting to disappear. Moreover, the FTE sector, overwhelmingly focused and fixated on both coasts, has for a long time neglected investment opportunities in the Midwest.
Venture capital—specifically venture capital aimed at the oft-ignored middle states—could be part of the solution. The central part of our country is often ignored as an ideas hub. Most accelerators, venture capitalists, and startup programs are focused on a few key cities on the east and west coasts. The Kauffman Foundation, known for its emphasis on education and entrepreneurship, recently published an article focusing on both the middle class and the middle states, asking: “Is the Middle the New Edge?”
It states: “The middle ground is too often dismissed as unremarkable, when it is truly necessary. The middle should be appreciated as an admirable place to be – where people work together to solve big problems and move our nation forward.” Read More