The barriers to minority business growth are well documented and persistent. In its report The Tapestry of Black Business Ownership in America, the Association for Enterprise Opportunity calls these barriers: the Wealth Gap, the Credit Gap, and the Trust Gap. As well, minority businesses tend to cluster in lower-profit industries where start-up costs are low, but revenues tend to stagnate.
In New Orleans, low educational attainment and poverty limit not only the cultivation of an in-demand workforce, but often limit avenues for entrepreneurship. According to the Urban League of Greater New Orleans’ report The State of Black New Orleans: 10 Years Post-Katrina, in the region, 83% of high school dropouts are African American. In a 2015 study by Raj Chetty and Nathaniel Hendren, New Orleans ranked 99th out of 100 metro areas with respect to income inequality. This directly correlates to lower level in intergenerational wealth transfer that non-minority entrepreneurs are often able to leverage in the starting of their businesses.
This phenomenon, a collision of limited education, poverty, limited access to capital and opportunity are what our organization works to address among entrepreneurs. Good Work Network aspires to help minority- and women-owned businesses start, grow, and succeed. We envision a community where the economy is diverse and inclusive and where all dedicated and competent entrepreneurs have access to the resources they need to succeed.
In nearly every social indicator studied in New Orleans – education, criminal history, poverty – black residents show glaring disparities between and lag behind white residents. There is one data point that gives us at Good Work Network pause: As of 2012, minority-owned businesses in greater New Orleans received only 2 percent of all receipts—a share that has remained stagnant both pre- and post-Katrina.
Efforts by the city and region to address economic inequity in 2013 became part of ProsperityNOLA: A Plan to Drive Economic Growth for 2018. Focused on catalyzing the city’s economy in five industry clusters, the plan calls for equity as a growth strategy. We see opportunity to more directly focus our work on several cross-cutting issues that will both open avenues of opportunity and strengthen minority business capacity. Among them: Increase the market share of minority businesses; (continue to) Partner with anchor institutions to increases participation of minority businesses; Identify, connect, and nurture the entrepreneurship and business development ecosystem for sustainable products and services.
Moving the needle will require a multi-disciplinary approach to dismantle legacy systems of institutional racism that have limited opportunity for minority businesses; finding creative models to open up access to capital, advocacy that encourages policy supporting economic inclusion; and investments in youth entrepreneurship education to better prepare the next generation of successful, minority business owners.
We are committed to doubling down on efforts to bring a new spirit of creativity and partnership to grow stronger, more market-driven minority businesses. It isn’t enough to find the best practices and evidence-based approaches working in other cities and import them here. We must consider what is promising in conjunction with what our economy and citizenry require. As discussed recently among the Good Work Network staff, the challenges small businesses face – and will continue to face as state, local, and federal policy changes play out this year – require a willingness to do what has not been done in order to get results we have not yet seen.
We welcome the thought leadership, collaboration on advocacy and interventions, and financial support from partners across the city, region and country helping us build a stronger community for all of us.