Despite the economic, cultural and social benefits that Black-owned businesses contribute to the communities they serve, stark disparities and barriers to entry remain a significant hindrance to their development. In 2019, only 2.3% of the nation’s nearly 6 million employer firms were Black-owned, according to the Federal Reserve – despite Black Americans making up roughly 14% of the U.S. population.
On a local level, disparities in metropolitan cities with a larger population of Black residents also highlights the challenges Black-owned businesses face. In Memphis, for example, where the Black population is 48.5%, only 7%, or 1,123 of all businesses in the city are Black owned, according to a Brookings Institution study. If Black-owned businesses held parity with the Black population, there would be 15,011 more Black-owned businesses. Disparities like these have contributed to the racial wealth gap that has persisted in the United States.
Non-profit organizations, business leaders and philanthropists across the United States are working to close economic disparities and opportunity gaps that have dampened the ability of people of color to own businesses. The Collective Blueprint in Memphis, for example, leads various initiatives to bolster the competitiveness and resilience of Black-owned businesses in the city. The Collective Blueprint aims to increase the number of Black-owned businesses in the area by supporting corporate minority business enterprises (MBE) as well as MBE startups. The organization launched a $15 million fund to provide more flexible capital arrangements to 400-500 MBEs over five years. Its work also tackles issues of educational inequality, seeking to lower financial burdens placed on Black students attending college and increasing representation of Black workers in key sectors, like STEM careers.
Key to the success of Black-owned businesses in the 21st century is connectivity – particularly access to reliable, high-speed internet. The Collective Blueprint seeks to address that challenge through investing $75 million to install internet connections and new hotspots, as well as offering laptops and other necessary technological equipment – investments that aim to reach roughly 135,000 Memphis residents. Connecting Memphis residents with high-speed internet would have significant economic effects in the community: estimates project that connecting 135,000 residents in Memphis without reliable internet access could unlock $2 billion in economic growth.
Working To Address Business Inequity
Robert F. Smith, Founder, Chairman and CEO of Vista Equity Partners, launched the Southern Communities Initiative – of which The Collective Blueprint is a member – to address these issues impacting communities of color across major metropolitan cities. The Southern Communities Initiative (SCI) supports non-profit and advocacy organization leaders in Birmingham, Charlotte, New Orleans, Houston, Atlanta and Memphis with programming aimed at reducing inequality among Black residents. SCI has garnered substantial grants to make generation-lasting impacts in institutions important to Black communities. A $150 million grant from Cisco, for example, is being used to modernize the infrastructure of HBCUs. This modernization – which will include expanding broadband access – will unlock the potential for businesses to collaborate with these universities, which will in turn bolster the local economy and provide college students with more resources.
Learn more about Robert F. Smith and the Southern Communities Initiative.
