Americans to achieve parity — from wealth to health — there needs to be a comprehensive agenda. On the following pages, each editor provides their personal and professional evaluation of the challenges facing black America and offers some prescriptive advice. Not surprisingly, most of their solutions start with the individual — you.
The history of black entrepreneurship in America spans nearly 400 years, dating back to 1621 when a slave named Anthony Johnson saved to buy his way out of bondage. Along with his wife, Mary, Johnson purchased land and raised livestock in Virginia. The couple eventually acquired 250 acres.
In the centuries that followed, African American entrepreneurs made great gains despite almost insurmountable odds. Contemporary black entrepreneurship coincided with the birth of this publication 35 years ago.
Paradoxically, the Nixon administration developed the black capitalism program, which spawned the agency that eventually became the Minority Business Development Agency and the 8(a) program, which set aside a portion of federal contracts for minority-owned companies. Through these efforts in the 1970s, many BE 100S firms got their start. The continual growth of the BE 100S is an ongoing testament to progress, but there’s still a lot more to be done. Of the thousands of black-owned companies that have been established since financier Reginald F. Lewis developed TLC Beatrice International Holdings Inc. and created the first billion-dollar black business in 1987 only four have ever achieved the size and scale to compete at the highest levels of American business. This illustrates how far black business still has to go to truly compete with their majority counterparts in the global marketplace.
Why should you care? Consider that African American entrepreneurs employ a higher rate of African Americans than white firms. It also means more advancement potential from a career standpoint. Also, black firms are more likely to contract with African American suppliers which, in turn, are more likely to hire black employees. This business activity creates a chain reaction of financial success. Moreover, a number of BE 100S CEOs are tapped for corporate and nonprofit board positions, enabling them to have an impact on diversity programs within major corporations as well as wide-ranging economic development initiatives.
The Census Bureau pointed out in its 1997 survey (sadly the most current statistics available) that black-owned firms generated on average $55,000 between 1992 and 1997. When you compare this to the average white-owned business which generated $276,000, the disparity hits home. Asians generated $205,000 followed by Native Americans at $119,000 and Hispanics at $102,000.
Why? Perhaps too many firms lack access to financing or operate businesses concentrated in industries with low rates of capital investments. Many minority firms have lower rates of investment in production-enhancing IT and Internet use.
So what’s the solution? A good start to fortifying black-owned businesses is the adoption of our Declaration of Financial Empowerment principle No. 8: to support the creation and growth of profitable, competitive black-owned enterprises.
Next, large multinational companies have to fully embrace diversity and ensure that they not only provide contracting opportunities for black-owned businesses but also