The 138,700 individuals who worked in finance, insurance, and high-skilled services in Suffolk County in 2011 earned an average of $138,000. Yet in the same year, almost 80,000 households in Boston — three out of every 10 — made less than $25,000. This region’s enormous inequality cries out for spreading new business opportunities more widely. One place to start would be a second innovation district, located not on the expensive waterfront, but in Dudley Square.
Boston should not be ashamed of its inequality. When cities offer good social services, welcoming ethnic enclaves, and public transportation, they attract people of limited means. Boston also appeals to the rich, some of whom gain from the city’s free flow of knowledge, and some of whom just like shopping on Newbury Street. It’s the suburbs, which are superficially more equal because land-use controls zone out poverty, that should be embarrassed. But Boston’s inequality still demands some policy response.
Earlier this month, I facilitated a town hall meeting on economic development in Roxbury, and an initiative to revitalize Dudley Square was a crowd favorite. This could take many forms; the most promising would be to emulate Mayor Menino’s Innovation District in this lower-income but more affordable locale. A Dudley Square “entrepreneurship district” should try to appeal not only to technology startups, but also to a wider range of entrepreneurs: food trucksters as well as educational software designers.
Dudley Square is not rich, but it has promise. The median household in its zip code earns $27,000, but it is only a 15-minute walk from Northeastern University. Dudley serves as a high-volume bus hub, and the Orange Line and commuter rail are short walks away. It has plenty of space for development. While Boston is marked by its large employers, only one of the 388 business establishments in Dudley Square’s zip code has more than 250 employees.
Dudley Square will also be the home for the new Boston Public Schools headquarters but needs significant private investment to thrive as a neighborhood. An entrepreneurship district could lure that investment by reducing the barriers to opening new businesses. The Dudley Square district should, like the former Fort Devens military base, get one-stop permitting with guaranteed decision times.
State legislation and local ordinances would be needed, but the advantages of encouraging startups in a less-advantaged area should be obvious to all. Neighborhoods rich and poor in Massachusetts have a history of using the extensive state and local permitting processes to hold up or head off new commercial development; for the entrepreneurship district to work, the Dudley Square community would need to accept fast-track construction permitting as the price of bringing in new economic activity.
Boston should be wary of following one of the more common economic-development practices: bribing businesses with tax breaks to locate in particular areas. This approach is often wasteful; a firm can claim its tax breaks for building in certain target areas, even if it would have located somewhere nearby without the incentive. A good entrepreneurship district should pioneer policies that don’t drain public coffers and can easily be exported elsewhere if successful.
New business clusters emerge because of the intrinsic advantages that exist in and around a neighborhood; close proximity to the school system headquarters, for instance, could prove helpful for technology startups interested in developing and promoting educational software that frees teachers up to do more one-on-one instruction.
A Dudley Square district would need to foster strong connections between emerging employers and the area’s many educational institutions, such as Roxbury Community College. With help from nonprofits, local high schools could create pathways to new local businesses.
There is still a role for hands-on political leadership. The area will need a prominent tech-sharing space, similar to the space that startup accelerator MassChallenge has in the existing Innovation District. Mayor-elect Martin Walsh needs to find the right partners and the right space to make this happen.
If successful, a Dudley Square entrepreneurship district could be Walsh’s legacy: a vision of using new technology to reduce inequality, rather than increase it.
Edward L. Glaeser, a Harvard economist, is director of the Rappaport Institute for Greater Boston.