About 40 people gathered to hear Jerry Davis, the Gilbert and Ruth Whitaker professor of business administration, present a lecture titled Creating Green Energy and Equitable Enterprise in Detroit on Oct. 20. The event was part of the University of Michigan’s “Real World Perspectives on Poverty Solutions” Speaker Series, a weekly talk with leading experts in policy and practice surrounding poverty.
Davis started the lecture by giving a brief overview of how changes in the economy are related to poverty in the modern U.S. He explained that technology has enabled companies to increasingly contract out parts of their business, particularly production, a process he referred to as “Nikefication,” based on Nike’s business model.
Davis claimed that out-sourcing results in companies operating with less full-time employees, which hinders career mobility.
“If you think about where the middle class came from in the United States, it was General Motors, and Ford, and Eastman Kodak, and Westinghouse and General Electric that had giant factories and giant bureaucracies,” Davis said. “The middle class relied very heavily on large-scale corporate employers that had career ladders for people, and they don’t exist anymore.”
Davis said because outsourcing production typically cuts costs, some people think that it would be easier to start a business, resulting in increased entrepreneurial opportunities that would compensate for a loss of middle class jobs. However, he went on to say this is not the case, and that rates of entrepreneurship have actually been declining over the past 45 years. Davis argued that this trend could be due to the high costs of health insurance in the U.S.
“It turns out that employer-provided health insurance in the United States is astoundingly expensive,” Davis said. “If you start a business, if you’re self employed, and you have to find your own health insurance, that is astoundingly costly. If you hire other people and provide health insurance for them, it is astoundingly costly.”
The lecture then transitioned into a discussion of the +Impact Studio at the Ross School of Business, which aims to utilize knowledge of business, research and design tools to implement impactful ideas. Davis teaches the Business Administration 670: Designing Equitable Enterprises class through the +Impact Studio and serves as the faculty director.
U-M students in BA 670 learn about the foundations of business and green energy, and they also conduct paid interviews with small business owners from Detroit to discover potential ways to make a tangible impact with their research. According to Davis, it was important for the students to be ready to engage and collaborate meaningfully with people from Detroit.
According to Davis, the course aims to help bring about a green energy transition in Detroit and beyond, especially by taking advantage of incentives offered by the Inflation Reduction Act, such as tax credits for installing solar panels or purchasing electric vehicles.
“Your potential small business person does not have time to read through the Inflation Reduction Act,” Davis said. “That’s where the University of Michigan can be really helpful. You’re all smart. If I give you a grade for translating nerd stuff into plain English for small businesses in Detroit, you’ll probably do a pretty good job.”
This past term, the students conducted more than 40 interviews with business owners to better understand what the priorities of Detroit small-business owners were. The students then collectively build an online how-to guide for the business owners that includes resources on saving money through green energy, securing low-cost healthcare for employees and accessing funding opportunities.
“We created a website you can go to right now, and this is all of the students’ work,” Davis said. “It’s a bunch of very plain English how-to guides written with the assumption that a typical reader is going to be a contractor at a job site.”
Social Work student Sadie Mrakuzic has attended several previous Real World Perspectives on Poverty Solutions lectures as part of Davis’ class and said his talk offered a different perspective from the presentations she has seen before.
“I liked that it had a different focus,” Mrakuzic said. “It was more on the economic and business side. A lot of our speakers have been more focused on other grassroots levels of poverty.”
Social Work student Savanah Rayyan also attended the event and said the lecture gave her new insight into connections between social work and business.
“I think there’s so much overlapping of fields,” Rayyan said. “I think we need to take all mindsets into account to approach these types of situations, and taking an economic approach as well as a social work lens can help us all attack poverty from all frames.”
Daily Staff Reporter Nadia Taeckens can be reached at firstname.lastname@example.org.