Investing in Technology is Investing in Economic Empowerment
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Between 1970 to 2018, the share of aggregate income going to middle and lower-income families dropped 20% from 72% to 52% as a percentage of total aggregate income. At the same time, the share of US aggregate wealth held by middle and lower-income families also dropped by almost half. In fact, since the Great Recession, the only income class that has not dropped is the highest which further reinforces the continuing concentration of wealth at the top. This wealth gap is made wider by increasing education costs and quality of living.
But these trends are not just seen on the individual level. The gap between large and small public companies grew by over 10x between 1980 and 2017 — a gap which continues to expand as more than two-thirds of smaller businesses cannot recover expenses. As larger companies are able to invest 50x more in R&D, they drive innovation, and thus the market, monopolize talent, and stunt new business growth.
Education
Over the last 30 years, the cost of secondary education has increased by nearly 500% while the median household income has not matched that rate of growth. Therefore, we’ve seen a concomitant, and exorbitant, increase in student loan debt forcing people to move away from obtaining a traditional college education. With this prospect, job seekers are looking for ways to gain marketable skills without a college degree.
The only recent change in education has not been the cost. The Internet revolutionized access to information and the COVID-19 pandemic revolutionized teaching (and learning!). As students move away from requiring a traditional classroom to facilitate learning, they are met with information overload. Filtering through thousands of sources to optimize learning and stimulate curiosity in order to make self-learning easy and commonplace has the potential to fundamentally change the structure of education in our country.
Wealth Building
Compared with those who earn $250k+, up to 60% fewer investments are made by those who earn less than $100k. Some may argue that a lower salary leaves one with less disposable income to be invested, butmany workers allocate their, not insignificant, disposable income to low growth investment vehicles such as savings accounts or bonds.
Though this trend may be multifactorial, there remain numerous barriers to wealth building.
For example, lack of confidence prevents potential investors from acting while lack of knowledge about smart investing forces individuals to take unnecessary chances with their money. While websites and apps like Robinhood and Coinbase pioneered the democratization of public investing, significant barriers in implementation and utilization of these services exist.
Technological innovations have already begun to disrupt both of these markets, but there is still a way to go. At Scale, we see the emergence of new technologies as vital to revolutionize social mobility through our educational and financial systems. We are passionate about finding the people who are driven to build companies that propel individuals and businesses through barriers and solve the biggest problems we’re facing today.
