Black business, group resources, and the economic detour: Contemporary Black manufacturers in Chicago's ethnic beauty aids industry (original) (raw)
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Increased national attention to racial and economic inequality has created public conversation on approaches for wealth building; but far too often, entrepreneurship is not included in the conversation. Nationally, white-owned businesses without have an average of 508,405peryearinannualrevenue,comparedtoblack−ownedfirmswith508,405 per year in annual revenue, compared to black-owned firms with 508,405peryearinannualrevenue,comparedtoblack−ownedfirmswith58,119, a difference of over 8 times. Creating strategies that increase black firm revenues is critical to expand owner wealth, as well as create jobs and raise income for workers, who are more likely to be people of color. As the nation becomes increasingly diverse, promoting the scalability of non-white firms will also be critical to U.S. competitiveness. This study uses data from the Kauffman Firm Survey (KFS), a panel dataset of startup firms founded in 2004, to understand why white-black revenue gaps exist and policy solutions that can help address it, through the following questions: (A) Is there a significant difference between white and black firm revenue?; (B) What variables significantly explain the gap between white-black firm revenue?; and (C) What variables are most significantly impact a firm’s revenue? The study finds that there is a significant difference of $150,774 between white and black firms in the dataset, 9% of which can be explained by financial, human, and social capital variables. Sales to government agencies are both the most significant variable reducing the gap between white and black firms, as well as the most significant predictor of firm revenue, once time and firm fixed effects are added. The study recommends the preservation and increased adoption of race-conscious procurement policies by both the public, private, and nonprofit sectors, while also expanding access to financing opportunities and business training to help firms succeed – all of which can play a role in reducing the racial wealth gap and expanding domestic competitiveness.
Black Entrepreneurship: Contradictions, Class, and Capitalism
Journal of Business Anthropology 3(1): 79-108, Spring , 2014
This article examines philosophical contradictions faced by black business owners who benefited from racial segregation, yet were often active participants in the civil rights movement. The research provides a critical analysis of the Atlanta Life Insurance Company, examining and revealing conflicting ideas of class and color during Jim Crow, as well as the contradictions of gender, the company’s program to “uplift” the community, and hierarchies within the company. This case provides a unique perspective for examining black entrepreneurship, its history, and complexity in the African American community.
Entrepreneurship is often touted as an economic opportunity that embodies American ideals of individualism and financial gain. Yet social scientists have long noted divergent entrepreneurial outcomes among various groups. In this paper, we consider how race informs entrepreneurship for minority business owners. In particular, we focus on the ways black entrepreneurs use racial counterframes as a means of defining various aspects of the entrepreneurial experience. Furthermore, we introduce the concept of intersectional counterframes to show how black entrepreneurs understand business ownership as a response to categories that interact with not only to race, but other social group categories as well, such as gender. We argue here that these business owners use both counterframes to construct entrepreneurship not simply as a potential pathway to economic stability, but perhaps more importantly, as a response to existing inequality.
Legitimizing black businesses: three examples from the Civil War to civil rights
Journal of Management History, 2020
Purpose-In "Reinventing Entrepreneurial History," Wadhwani and Lubinski (2017) encourage the study of legitimacy, the sense that a new organization or venture "belongs" to, or fits within, the social construct of its time. Design/methodology/approach-To this end, this query will consider methods used in the period between the Civil War and the Civil Rights Movement to show legitimacy in black economic endeavors. Three Atlanta entrepreneurs' efforts will be used as demonstrative examples. Findings-The overarching aim of this investigation of economic legitimization is to give practical examples of three distinct strategies in play: endorsement, authorization and storytelling. In addition, a fourth external actor, social organizations, that exists outside of the realms of media, government and law as noted by Bitektine and Haack (2015) is illustrated to grant validity within the black community. Also, the storytelling strategy is used to illustrate promoters, actors pushing legitimacy to benefit the community at large. Originality/value-Arguably the search for economic and collective legitimacy within black businesses is not confined to the past. Stated in another way, black businesses still fight for legitimacy, and future research should be undertaken to show the similarities and differences in the two aforementioned periods.
Market structure and the pattern of black-owned firms
The Review of Black Political Economy, 1988
This article discusses the relationship between industrial concentration and the presence of black-owned firms. Strong evidence is found that more monopolistic industries have a smaller black presence. This demonstrates that the monopolistic industries in which black workers are known to face the worst discrimination are also the industries in which blacks face the highest structural entry barriers as entrepreneurs. Indeed, entry barriers may cause the monopolistic conditions which allow discrimination while simultaneously frustrating the entry of black entrepreneurs.
Black Progress through Business Improvement: Two Articles by Joseph R. Houchins, 1900–1989
The Review of Black Political Economy, 2017
In the spirit of further expanding the heretofore unsung contributions of African American economists, we present two unpublished works from the 1930s of Joseph Roosevelt Houchins. They focus on Black business development and strategy. Biographical information and historical context for Houchins's life experiences during the twentieth century are included in an introduction. Houchins was a member of President Franklin Roosevelt's Black Cabinet, a leader of the Division of Negro Affairs in the U.S. Department of Commerce, and a chair and professor of economics at Howard University. These two writings reflect a strategic effort to strengthen the efficiency and impact of Black business as an engine of Black progress. The first document presented here analyzes the high failure rate of Black-owned insurance companies, a mainstay of Black business especially in the 1920s and 30s. Houchins determined that their failure was due to several factors: lack of business knowledge; lack of...
African-American Business Ownership: Strength In Numbers, But Where?
2005
Federal and state governments have seen fit to create enterprise and empowerment zones which benefit community redevelopment. Are these areas good for minority businesses? Data from Broward County, Florida show that African-American owned businesses tend to be in ethnic communities. They also tend to be in enterprise zones moreso than the other groups, and less likely than women-owned businesses to
THE BITTER TRUTH: A COMPARATIVE ANALYSIS OF BLACK MALE AND BLACK FEMALE ENTREPRENEURS
The paper examines variables stated to be central to entrepreneurial success and reports differences between black male and black female entrepreneurs. Variables studied include task-specific efficacy, firm performance and opportunity recognition. Using a sample of 85 males and 58 females, results indicated that although black male and female entrepreneurs are somewhat similar in terms of business environment and demographics (e.g., education levels, years of business industry experience, likelihood of having a business mentor, etc.), black females trailed black male entrepreneurs in firm performance, task-specific efficacy and opportunity recognition. Overall, findings suggest an expressed need to enact specific-policies to increase success rates among this group of understudied entrepreneurs, black females.
Entrepreneuralship in the Black Communities
Entrepreneurship is sometimes seen as a process of few peoples. Although some persons have innate abilities as entrepreneurs, many can also develop this capacity in their life through a learning process. According to Timmons (1999: 27), entrepreneurship is a way of thinking and reasoning. At the heart of entrepreneurship is the creation and/or recognition of opportunities. Therefore, entrepreneurship can help disposed people to change their social life, from poverty to wealth. In the other hand, Black Economic Empowerment (BEE) is a policy aimed at empowering previously disadvantage in South Africa. Therefore, what is the link between BEE and entrepreneurship?