Black entrepreneurship has skyrocketed from the 1970s to today, yet business-generated PRODUCTIVITY outcomes have been meager despite high growth ACTIVITY. Today, Census data show that all Black-owned businesses nationwide produce less than 1% of GDP. Black EMPLOYERS represent a mere 2% of the employer Landscape nationwide.
Recent studies found that for every percentage point increase in the rate of entrepreneurship in a state, there is a 2 percent decline in the state’s poverty rate.
Separately, the Aspen Institute followed low-income individuals running micro businesses for five years and found that 72 percent of these entrepreneurs increased their household income over five years (the average increase was $8,484), enough to move 53 percent of these entrepreneurs out of poverty. Because of these household gains, they were able to diminish their dependence on public assistance programs by 61 percent on average.
Investments into Black entrepreneurs and small businesses are direct investments into Black communities and economic recovery. In order to support Black owned businesses, we can not only invest in building their capacity, but we must also invest in building the capacity of the entire entrepreneurial ecosystem that they rely on for success.
By understanding the diverse paths founders from marginalized communities take to entrepreneurship, designing programming to meet their unique needs, and building an inclusive entrepreneurial ecosystem that surrounds them with resources they need to overcome systemic barriers, we can create an equitable economy for all, and particularly for communities of color.
To build supportive entrepreneurial ecosystems, we start by leveraging previously conducted community need finding activities and execute human centered design thinking sessions to understand who is active in each community, how decisions are made, what resources exist and how they are allocated, existing strengths and how they have developed, and the culture and history that guides it all. We use an ecosystem diagnostic tool to understand these and other characteristics, informing how we can best support the development of an entrepreneurial ecosystem in Indianapolis, and across Central Indiana .
Incubating Entrepreneurial Ecosystems
Building economies relies on a strong entrepreneurial ecosystem. With an initial focus on Indianapolis, we will shift beyond entrepreneur support to focus on development of an interactive ecosystem map that answers the foundational question of “whoʼs doing what, where and incubating the entire ecosystem. Instead of duplicating efforts that already exist, we will identify gaps, and align and coordinate partners across the entrepreneurial ecosystem to meet those needs. In some cases, we may need to provide direct support, and in others we build the capacity of existing stakeholders to meet those needs.
We know that capital is a critical resource to an entrepreneurʼs success. Capital is the lifeblood of any business. Black businesses that are in the early stages of development, often lack the resources and capital necessary to sustain themselves and grow. Via partnerships with Elevate Ventures, Urban Capital Network and MEI Capital. We support Early Stage Black Founders in the USA and Sub-Saharan Africa with the capital they need to fund their operations, expand their customer base, and develop their products and services.