Why Inclusion Isn’t Just Good, It’s Essential for Economic Growth

An inclusive economy is no longer a moral aspiration or a ‘nice-to-have’ side project. For business leaders and investors alike, it’s a fundamental truth: without inclusion, we simply cannot build a resilient, thriving economy capable of delivering sustainable returns for everyone.

Think about it. In places where inclusion is woven into the very fabric of the economy – from supply chains and procurement processes to capital access and business ownership – people don’t just survive; they thrive. Inclusive economies inherently create more resilience. They broaden the base of potential business owners, fostering innovation, job creation, and a deeper sense of community investment. As our economic landscape becomes increasingly stratified and volatile, this kind of inherent resilience isn’t just a bonus; it’s a necessity.

The Proof is in Our Cities: Inclusion in Action

At Living Cities, our extensive work with mayors, financial institutions, philanthropies, and community partners consistently demonstrates that cities and companies prioritizing inclusion and equity actively reduce long-term risk, deepen trust, and unlock new economic opportunities. Conversely, those that ignore the profound benefits of economic inclusion often see capital, talent, and residents seek opportunities elsewhere.

Memphis: Turning Procurement into a Growth Engine

Consider Memphis, where Black residents constitute a majority of the population, yet historically owned only a fraction of local businesses. Through strategic support, the city and local partners created Contractor’s University. This cohort model equips small firms – many led by entrepreneurs of color – to successfully bid on and win city contracts. Within months, participating firms translated their training into new contracts and rising revenues, effectively turning a major barrier to business success into a powerful growth platform.

Miami: Inclusive Capital for Community Longevity

In Miami, inclusive capital has become integral to the city’s resilience strategy. Local leaders, in partnership with community organizations and investors, acquired commercial property in a cultural district. This initiative preserved affordable space for dozens of small, often new American immigrant-owned businesses, safeguarding a burgeoning commercial corridor and future revenue streams for the city.

Austin: Seed Grants for Sustainable Growth

Austin showcases how cultural incubators and entrepreneurial training programs are converting modest seed grants into new firms, jobs, and community wealth. By offering targeted support – something entrepreneurs have lacked for generations – these programs are unlocking growth opportunities and fostering sustainable businesses.

What Business Leaders Can Do Differently in 2026

The question for business leaders and investors is no longer whether to support an inclusive economy, but how quickly to align their own practices and policies with what is already proving successful. Three crucial shifts can help leaders tap into the immense benefits of an inclusive economy:

1. Redesign How Capital Moves

   It’s time to replace outdated audit underwriting and investment criteria with “bias-adjusted” frameworks. These frameworks recognize the positive track records of entrepreneurs and neighborhoods long – and often unfairly – labeled high-risk. Coupled with innovative credit products like first-loss capital, guarantees, and flexible lines of credit, challenging preconceptions about what constitutes a “risky” investment can lead to an expanded deal pipeline and a wealth of new opportunities.

2. Treat Procurement as a Growth Engine

   Moving beyond mere diversity pledges, leaders should implement codified inclusive procurement standards. These standards make it easier for local and small firms to become ongoing vendors, simplifying contracting processes, offering technical assistance, and publishing clear inclusion metrics tied to executive performance and the cost savings derived from more resilient local supply chains.

3. Invest in Ownership, Not Just Access

   Support models that keep wealth rooted locally. Think cooperatives, employee ownership transitions, and community land trusts. Align corporate philanthropy, impact investing, and civic partnerships around shared-ownership pathways. For example, in St. Paul, a down-payment assistance program has invested in families who lost homes through the execution of the Federal Highway Act, effectively stabilizing neighborhoods and the local economy.

A Mandate for the Next Economy

The past year has been turbulent, marked by federal shutdowns, rising costs, and contracting labor markets that strain both households and balance sheets. Yet, the path forward is clear: Cities across America are proving that local economies that expand the concept of who can be full participants are inherently more productive, predictable, and investable.

In 2026, neutrality is not a safe middle ground. Choosing not to prioritize inclusivity and resilience is, in effect, choosing to operate inside an outdated standard for risk, talent, and growth. Business leaders who aspire to usher in the next era of American prosperity must spend 2026 recommitting to inclusion as a core economic strategy.

Joe Scantlebury is the CEO at Living Cities.

Source: Original Article