In 2020, the Greater Cincinnati and Northern Kentucky African American Chamber of Commerce (AACC) commissioned the UC Economics Center to analyze a completed study that aimed to measure the economic impact of Black-owned businesses in the Tri-State area. The findings reveal that Tri-State Black-owned businesses have an economic impact of more than $1.4 billion annually. According to AACC President and CEO Eric Kearney, the impressive analysis emphasizes “the importance of Black businesses in the Greater Cincinnati region” and that businesses there are “contributing to the quality of life and the economy.”
The result did bring good news, but it also challenges us to go further and ask ourselves, “If the Greater Cincinnati and Northern Kentucky Tri-State area experienced such economic growth, what if the same trend exists in other US states with the growing businesses run by entrepreneurs of color?” Without a doubt, the nation’s economy will grow significantly because of such a business collective. But clearly, there is still so much work to do, especially in addressing the disparities that prevent these numbers from being more extensive across the US. Establishing initiatives and action steps geared towards empowering black and brown entrepreneurs are essential to achieve economic equity that contributes significantly to the rising of the American economy.
How Empowering Black and Brown Entrepreneurs Looks
An article by consultants in McKinsey’s New York office entitled “Building Supportive Ecosystems for Black-Owned US Businesses” suggests interventions that empower black and brown business owners. At the same time, it strengthens the bonds of racial justice in the business culture.
Produce Equitable Outcomes through Policy Implementation
All sectors of the community – public, private, and social sectors – can participate in removing institutional barriers for Black-owned businesses. Stakeholders, policymakers, groups of industries, and affinity groups can enforce laws and policies that prevent inequitable processes and outcomes. Anchor institutions and large organizations can also be more inclusive of Black-owned businesses, like simplifying minority-supplier certification processes and dedicating funding to supplier-development programs to help entrepreneurs of color better participate in supply chains.
Equitable Access to Capital
Black and Brown SMBs need direct investment or in-kind equity contributions like grants, subsidies, loans, and revenue agreements. The experts at McKinsey & Company say that increasing the availability of financial resources, like start-up and expansion capital, is crucial to improving the business experience and replenishing the pipeline of growing entrepreneurial ventures. Possible programs to facilitate access to capital include guaranteeing funds and programs that help business owners from marginalized backgrounds, conducting fewer in-person transactions for loan processes, and providing a high-growth small business with capital and R&D funding to accelerate the growth of Black Brown-owned companies that hold intellectual property.
Facilitate Knowledge Sharing and Build Business Capabilities
Black- and Brown-owned businesses need support for knowledge sharing and building capabilities to rise above market barriers. Organizations can lead these capacity-building efforts to protect and strengthen Black-owned enterprises and build business networks with these SMBs as hubs. Private and social sectors can help provide upskilling and reskilling the workers of businesses owned by people of color to make them more competitive. On-the-job training and free online learning for business are also necessary resources that can be made available across multiple entrepreneurial projects. Fostering a culture of lifelong learning will go a long way in sustaining businesses.
In addition, business service providers can help businesses identify new market opportunities through digital transformations. Private and social sector organizations provide free managerial assistance and technology services that can go as far as free or subsidized installation, tech support, and staff training of these businesses. Digital capabilities will increase the share of opportunities for entrepreneurs of color.
Enlarge Mentorship and Sponsorship Opportunities
Black and Brown entrepreneurs can overcome many sociocultural barriers through participation and representation in networking, mentorship, and sponsorship programs. Private sector companies can build more inclusive teams. Managers should develop and sponsor the careers of more leaders of color. Community groups can create programs to help entrepreneurs connect with commercial networks and role models that encourage Black and Brown potential entrepreneurs to pursue owning a business with confidence and support.
In summary, consultants at McKinsey & Company highlight the importance of investing in more ecosystems that provide Black and Brown entrepreneurs access to opportunities and resources. Embracing these interventions can unlock “part of the $1 trillion to $1.5 trillion in annual GDP that would come from closing the racial wealth gap.” More importantly, creating a supportive and inclusive business culture leads to a restorative effect with economic gains. This “could be a step forward for US society.”
Newark Business Hub and Rutgers University Forge Partnership to Empower Black and Brown Entrepreneurs
The Newark Business Hub program, delivered in partnership with Rutgers University, was established to help non-profit, corporate social responsibility, and community leaders to connect to and empower Black and Brown entrepreneurs. The program provides access to the NBH online learning community, which includes self-paced business modules, live interaction between coaches and participants, a 24/7 community to get business answers, and one-on-one coaching.
Newark Business Hub aims to empower 1 million Black and Brown entrepreneurs globally and provide them the skills, mentorship, and community they must have to succeed and create wealth.
