The state of minority business development in New England
10/5/2010, 9:02 p.m.
The current state of minority business development in New England is critical. Its importance to the social and political health of our democracy here in New England cannot be minimized. Business development affects employment, and thus the income of workers. Through employment, families are capable of supporting themselves and contributing to their communities as consumers and taxpayers.
Business development, and in particular small business development, is an indicator of the health of a community. With vibrant stores to enable residents to shop and browse and interact with one another, a community is strong. Where there are only store front churches or boarded up buildings, a community is in despair. In black and brown communities all over this country, minority business development is critical in the struggle for the survival. These communities are suffering by almost every socio-economic standard. Hispanic and black families have less than one-fifth the net worth of white families. Blacks and Hispanics continue to drop out of school at alarming rates at a time when education is so necessary for employment. The recent census reports that for African Americans and Hispanics, the rate of poverty is 25.8 percent and 25.3 percent, respectively. Minority entrepreneurship was once considered to be a tool in the anti-poverty toolbox. It is clear from these numbers that this tool needs to be sharpened.
Minority businesses are often the starting point for minority workers to enter the labor force. Nationally, minority businesses employ almost 5 million workers. Minority businesses are often the primary supporters of the social needs of communities when governments and families fall short. There are countless examples of minority entrepreneurs stepping in to fill the unmet needs of the families of their workers in difficult times like today. And minority business leaders play an important political role in the fabric of American democracy. Thomas Jefferson believed that without small farmers and property owners, democracy would fail. John Adams believed that without well informed citizens, democracy would collapse into aristocracy. Minority business owners are often the most well informed and politically active citizens in our communities. They are the ones who push the agenda for greater opportunities for all Americans.
Minority businesses in New England are significantly underrepresented, undercapitalized and underperforming. It is time for the political and business leaders of this region to pay close attention to this problem. The consequences of failure go far beyond the lines that separate our segregated communities.
GNEMSDC certified MBEs larger than US average
More than 61 percent of certified Minority Bussness Enterprises (MBEs) in the GNEMSDC have annual sales over $1,000,000. These MBEs have enlightened leaders at their helm and have been able to build their sales, even while building a strong team of workers and managers. As a group, these businesses employ hundreds of workers. Our records show that two thirds of their work force are minorities. Minority firms with sales of more than $10 million per year are the clear exceptions. According to the Minority Business Development Agency of the Department of Commerce, minority firms on average have sales of less than $200,000 per year. So a minority firm with $10 million in sales is 50 times greater than the “typical” company. Surprisingly, more than 30 percent of GNEMSDC certified MBEs fall into this group. Most of these large minority firms will survive the current recession. They will likely continue to grow in size and scale, through organic growth and acquisition.