In an article by Mike Green at Dominion of New York, he offers an eye opening perspective on Black entrepreneurship:
The Bureau of Labor Statistics data show a 60 percent spike in Black entrepreneurship between 2002 and 2007, equivalent to 1.9 million Black-owned businesses.
However, more than 1.8 million of those businesses were sole proprietors with zero employees. Thus, it's no surprise there's zero job growth and chronic high unemployment across Black America. According to a 2010 report published by the Kauffman Foundation, nearly all net new job growth in the nation since 1980 has come from "high-growth" growth companies, those whose revenues grow quickly.
To add insult to injury, the nation's 1.9 million Black-owned businesses combined produced less than 1 percent of the nation's GDP. And that was at the height of entrepreneurship in Black America ... before the economic collapse.
Why do our businesses stagnate? Many reasons have been put forward, but one that is critical - lack of funding - will very soon have a potential solution.
There is no "culture of risk capital" in Black America. But this month, President Obama signed into law a bill that could change that.
The JOBS Act (Jumpstart Our Business Startups), signed into law on April 5, 2012 allows entrepreneurs to raise money - through a process called "crowdfunding" - from people previously ineligible to participate in certain types of investments. For communities and entrepreneurs that have historically been disconnected from investing in private companies, the law is a boon.
No one yet knows the ultimate impact of the JOBS Act, because the rules for the new law are still being deliberated and will be decided by the SEC within 270 days from the day it was signed by President Obama.
But we do know this: Under the JOBS Act, companies will be able use the crowdfunding option to raise up to $1 million without a requirement to sell only to accredited investors.
This promises to open the door for high-growth entrepreneurship and job growth in economically disconnected sectors nationwide.
Despite the omission of black America from the current national innovation ecosystems, black innovators continue to emerge, suggesting there are investment opportunities within black America. To create more of these innovators, we ought to foster, nurture and augment urban innovation ecosystems, by investing in STEM education and other resources that help create entrepreneurs who produce job growth.
He concludes, "Black Americans have never had a better opportunity to engage in America's economy. But let's not forget this is a race - a competitive landscape in which millions are rushing past us toward the unknown and unseen. It is time for an economic movement across black America. We are witnessing history being made. We have to decide now whether we intend to enter through the economic doorway opened by a black president and transition from a past of poverty to a future of prosperity, or remain flat-footed while the race into the 21st century leaves us in the past."
Mike Green is an award-winning journalist and Co-founder of The America21 Project, a national nonprofit dedicated to connecting Black and Urban America to the 21st century global Innovation Economy. Contact him at
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