How Opportunity Zones Can Break the Cycle of Wealth Export
Forbes OZ Summit Series: Ross Baird, Founder, Blueprint Local
On May 21, we interviewed key opportunity zone players at the inaugural Forbes OZ Summit in Newark, New Jersey.
Ten years ago, Ross Baird co-founded Village Capital, a venture capital firm that invests in early-stage enterprises dedicated to solving global problems in agriculture, education, energy, financial services, and health. Baird views opportunity zones as a way for a collective of individual developments to reach a larger impact on a community scale. Hailed as a leader in social entrepreneurship, Village Capital utilizes a unique, peer-selected investment model that focuses on making venture capital more accessible to entrepreneurs outside of the three states (California, Massachusetts, and New York) that collect 78% of all venture capital disbursements. Since its inception, Village Capital has invested in over 100 entrepreneurs and supported many more through training and resource initiatives, and its goal of democratizing capital has become a recurring theme for Baird.
Earlier this year, he founded Blueprint Local, a venture dedicated to “mobilizing local wealth into meaningful and impactful projects across the country.” Echoing the mission of Village Capital, Baird says that a destructive cycle of wealth export has become entrenched across the nation, leaving “tens of thousands” of formerly prosperous and middle-class neighborhoods in an economic rut, while a small number of areas flourish. “In our economy, its seems like everything is buy local, except for money itself,” he says. Underlying this cycle are distance — “most people’s money is managed in New York, which is far away from the main streets where people live” — and decades of conditioning to believe that some parts of the country are inherently uninvestable. Reversing the cycle requires raising awareness and conversations among investors and showcasing examples of successful projects in disinvested communities.
In his work to achieve these objectives and encourage local investment, Baird quickly recognized the transformative potential of opportunity zones. In particular, the program has accelerated a much needed conversation around investment impact. “The biggest boost of opportunity zones is that it’s awakened a conversation where people are thinking very differently about their money and their resources and their community,” Baird says, and it's challenging people to ask themselves, “What is my money doing in the world? What do I want for my city and kids, and how is money contributing and working towards that?”
Beyond raising awareness, Baird points out that opportunity zones also facilitate the logistics of local investment. The people working in opportunity zones “are really diplomats and translators” helping investors to see the potential of disinvested communities while also facilitating open and transparent dialogue with members of the community. By engaging the support of community members, Baird believes that both investors and local residents can benefit from development, and projects are more likely to succeed.
Additionally, Baird sees an important shift in the way the economic development projects are viewed and undertaken in opportunity zones. “Neighborhoods don’t grow in wealth through one big thing; it’s a lot of little things.” Using the metaphor of thriving street corner with housing, main street business, and larger, high growth businesses, Baird explains how it takes an ecosystem of interactions to generate wealth. Likewise, the wide array of opportunity zone projects allows people to invest in an entire “street corner,” in line with Blueprint’s goal of rebuilding entire communities. For Baird the implications are clear: “If we are able to create a virtuous cycle, I think we’ll be a much stronger country.”