Boston – A new report from MassINC and the newly-formed Coalition for an Equitable Economy lays out the needed elements of a plan to strengthen opportunities for entrepreneurs of color post-COVID. The report, entitled Unleashing the Potential of Entrepreneurs of Color in Massachusetts: A Blueprint for Economic Growth and Equitable Recovery, was released today at the Boston Foundation. Ithighlights both the need and the opportunity to put inclusive entrepreneurship at the core of the state’s economic growth in 2021 and beyond.
The report explores what authors call the “three pillars” of business success: skills and relationships, access to capital, and access to markets and customers, and key elements of inclusive entrepreneurial ecosystems. The report also reveals the shortcomings — many of which pre-date the pandemic — that serve to hold back entrepreneurs of color and perpetuate inequality.
“This report lays out a sensible framework of program and policy priorities needed to close racial and ethnic gaps in small business ownership by the end of this decade,” said Betty Francisco, a Boston Foundation board member, co-founder of Amplify Latinx and General Counsel for Compass Working Capital. “The Coalition for an Equitable Economy will activate this blueprint for building inclusive entrepreneurial ecosystems, and continue to provide coordinated action, research, and leadership to revitalize our small business ecosystem and enhance racial equity in Massachusetts’ economy.”
The second report and forum in this series from the Coalition for an Equitable Economy, The Color of the Capital Gap, will be released in May. That report will feature data and analysis from Boston Indicators, the research arm of the Boston Foundation, and will explore the disparities in access to capital among businesses of color and propose bold solutions to close the funding gap.
Understanding the experience of entrepreneurs of color is a critical step in creating more opportunities for people of color across the Commonwealth,” said Orlando Watkins, Vice President for Programs at the Boston Foundation. “Our current failings to support an equitable system are rooted in multiple systems, and it will take a multifaceted approach, evidence-driven and a long-term effort, to overcome them. We are committed to making it happen.”
The case for investing in entrepreneurs of color
Unleashing the Potential of Entrepreneurs of Color in Massachusetts opens by highlighting a troubling trend in the Massachusetts economy: While entrepreneurs drive innovation and create jobs, the number of new businesses with employees in Massachusetts has dropped sharply since 2005, and gains among Black and Latino businesses are not nearly enough to stem the trend. This lack of growth is a missed opportunity when research shows that inclusive entrepreneurial ecosystems are vital to the health and development of the state’s critical tech sector, and can have a measurable impact as a vehicle for closing Massachusetts’ well-publicized racial wealth gap.
Ironically, the COVID-19 pandemic, which has devastated Black, Latino, Asian and immigrant-owned businesses, has helped illuminate possible paths to accelerate improvements. The growth of programs to support entrepreneurs of color during the pandemic has given greater visibility to their needs and opportunities, and also provided potential roadmaps for longer-term programs post-pandemic.
“The data demonstrate clearly both the power of programs to support minority-owned small businesses and the impact of those businesses on their owners and employees,” said Ben Forman, Research Director at MassINC and co-author of the report. “But we must work to give them the scale they need to have the transformational power needed to create a more inclusive, equitable sector.”
Three Pillars of a New System of Opportunities -- and next steps
The Coalition report lays out “three pillars” of business success that would create more equitable opportunities for entrepreneurs of color:
- Building skills and relationships through technical assistance and network building;
- Improving access to capital, particularly early-stage capital, through alternative funding models, accelerators and innovative approaches to investment, and;
- Increasing access to customers through procurement programs, strategies to aggregate opportunities for minority-owned businesses, and efforts by commercial districts and other networks to market and increase visibility.
With those key pillars in mind, the report offers several potential avenues toward equitable entrepreneurship in the Blueprint for Inclusive Entrepreneurial Ecosystems, spelled out more fully in the complete report.
The Coalition for An Equitable Economy
Once the real impact of the pandemic began to be fully realized, a number of local organizations ramped up their efforts to provide small businesses owned by people of color with the resources they desperately needed to survive. These resources included assistance navigating the PPP loan process, access to new equipment and financial capital, and direct technical assistance. “While these efforts were moderately effective and needed, there was a recognition that the impact could be more effective and far-reaching by working together," said Segun Idowu, President and CEO of the Black Economic Council of Massachusetts. "That's why we founded the Coalition for An Equitable Economy. It was born of the need to centralize support for entrepreneurs and business owners of color. With a united network of resources, contacts, and support systems, we not only enhance the efficiency of each organization, but also support a greater number of small businesses, helping to close the racial wealth gap in Massachusetts.”
Inspired by the possibilities, a number of organizations, including the Foundation for Business Equity, Massachusetts Association of Community Development Corporations, Amplify Latinx, the Black Economic Council of Massachusetts, and LISC, started conversations about creating a coalition, and formed an initial steering committee with leaders from over 15 community-based groups.
The steering committee for the Coalition for an Equitable Economy includes:Larry Andrews, President and CEO, Massachusetts Growth Capital Corporation
Amine Benali, Managing Director, Strategy and Development, Local Enterprise Assistance Fund
Alberto Calvo, Treasurer, Hispanic-American Institute
Frank Carvalho, Principal Owner, Frank Carvalho Consulting and former Executive Director, Mill Cities Community Investments
Nia Evans, Executive Director, Boston Ujima Project
Betty Francisco, General Counsel, Compass Working Capital and Co-Founder, Amplify Latinx
Samalid Hogan, Regional Director, MA Small Business Development Center Network Western Office
Segun Idowu, Executive Director, Black Economic Council of Massachusetts (BECMA)
Karen Kelleher, Executive Director, Local Initiatives Support Corporation (LISC) Boston
Joseph Kriesberg, Executive Director, Massachusetts Association of CDCs (MACDC)
Lianna Kushi, Programs Director, Entrepreneurship for All (EforAll)
Priya Ashok Lane, BizGrow Director, Lawyers for Civil Rights
Glynn Lloyd, Executive Director, Foundation for Business Equity and CEO, Mill Cities Community Investments
Derek Mitchell, Executive Director, Lawrence Partnership