We know that COVID-19 has hit communities and economies across Indiana hard.
Central, Northwest, Northeast Indiana, and particularly minority neighborhoods in communities like Indianapolis, Gary, and Fort Wayne, were hit exceptionally hard. The economic impacts of COVID exacerbated communities already grappling with significant decreases in population and jobs over the past three decades.
In response to these challenges, businesses have responded in different ways. For example, a McKinsey study reported that more than 40% of minority-owned small businesses had added new services to support their communities and employees, compared with 27% of all respondents. With 22% of all small businesses across Indiana run by people of color, these businesses have been a cornerstone of their communities during these uncertain times.
We also know that the economic impacts of COVID-19 have exposed longstanding inequalities in our financial system. In strong economies, the systemic biases that limit access to minority-owned businesses limit growth. These inequalities result in scaling back during economic downturns, layoffs, and closures. When considering that Indiana’s 113,456 minority-owned small businesses hire more employees than the state average, these trends pose a significant risk to the health of Indiana’s workforce and economy.
The best option for minority communities is to help minority entrepreneurs build mid-sized businesses and develop growth ventures that export from the area and import wealth. In addition to the primary benefit of developing mid-sized businesses and growth ventures to import wealth, the secondary use is that their employees will spend locally – and help create small businesses with jobs.
The Importance of Developing Entrepreneurs
Inclusive economies are simply … better economies by providing equitable opportunities for excluded communities to gain support resources. By nature, they are also more diverse, making them more resilient and able to weather and rebound from economic disruptions like the ones we’re experiencing today.
To effectively shift and improve how future economies function, we aim to design programs through an ecosystem-building lens. Emerging entrepreneurs cannot succeed in a vacuum; instead they require:
- A network of support, including connections to other businesses
- Access to appropriate financial services and capital
- Equitable laws and policies that encourage small business growth
- A broader community and culture that champions entrepreneurship and rewards innovation