Innovation and Responsibility

by Bob Goldfarb

Whom does Jewish innovation serve? It’s a question that needs closer attention as the sector continues to grow. According to a recent report, The Jewish Innovation Economy, this sector “is more focused on Jewish identity and belonging, along with religious expression, than on social services and large-scale institutional action.” That’s markedly different from Federations, which typically have a primary commitment to caring for Jews in need.

Another difference, as we know from earlier studies, is that the leadership of startups is atypical of the North American Jewish population generally. “Fully 95% [of startup leaders] have been to Israel at least once, compared with 35% of American Jews overall,” confirms the new report. In addition, more than half of the founders and leaders have participated in at least one Jewish leadership development program, corroborating how exceptional they are.

Jewish startups collectively receive nearly $200 million in direct funds, not counting in-kind support or volunteer labor. Those funds reach nearly 600 organizations that are “in contact” with 630,000 people, of whom 115,000 are regular participants. That works out to an average of $324,000 per organization and $317 per person, $1739 per active participant. By comparison New York’s Federation has a budget of similar magnitude, around $230 million, and says that some 4,500,000 are “touched” by its work, which amounts to just $50. per person. Even allowing for the fact that attending an event is different from benefiting from a program, the contrast is startling.

These data confirm the emergence of a new class of Jews defined by disproportionate access to communal resources. As several attest in the study, they often use their advantages to pursue their own interests. One speaks of “the drive to create a Jewish community that I would want to participate in myself.”

Another explains, “I feel that doing the work I am doing – following my passions – allows me to live a fully integrated life.” This is reflected in the nature of the top five areas of focus for startups: Jewish education (53%), community building (31%), spirituality (28%), ritual (26%), and 20s/30s engagement/development (25%). In a great many cases these ventures create events and experiences intended for people like the founders, as distinct from contributing to the welfare of others; social service accounts for only 6% of them.

This might be explained as a market correction, filling needs and addressing interests neglected in the past by the traditional institutions of Jewish life. But the new report, invoking the economist Joseph Schumpeter, makes a more radical claim. It proposes that the current era in Jewish institutional life is akin to the dawn of the Enlightenment or the destruction of the Second Temple, a disruptive paradigm shift exemplifying what Schumpeter called “creative destruction.” It’s worth spending a moment to take a closer look at that claim.

In a literal sense it doesn’t really apply. Schumpeter was writing about macroeconomic dynamics predicated on variables like currency, interest rates, import duties, and taxes, which don’t obtain here. Even metaphorically, however, The Jewish Innovation Economy doesn’t document its thesis that “the current cycle of reinvention and creation within Jewish life is an adaptive response to a rapidly changing world.” Its data point to the opposite conclusion: that the vitality of today’s innovation sector is actually the outcome of directing enormous amounts of money to educate its leaders and to support their ventures, not the inevitable result of impersonal forces in technology and the economy.

If the innovation sector displaces older communal structures, the question of whom it serves becomes even more urgent. Here is a sector spending $200,000,000 a year on projects directed by a privileged group of leaders, yet with social services and human services glaringly underrepresented. This would have been a good time to correct that imbalance by recommending incentives to take care of the helpless and the needy among us.

Instead, the report advocates more power for startups (“a vote in communal decision-making”) more money (“capacity building”), and more connections (“networks”). All of us want more power, money, and connections, but the greater good of the community should surely be in our thinking too. As the innovation sector matures, perhaps it will widen its vision beyond its own interests and extend its concerns to those less fortunate than its leaders.

Bob Goldfarb is the president of the Center for Jewish Culture and Creativity, the fiscal sponsor for more than 20 innovative Jewish projects. He earned his MBA at Harvard Business School.