Evolution of Black American Entrepreneurship
Updated: Sep 19, 2018
After the Civil War, Black business ownership was minimal at best. Many places in the nation forbade Blacks from business licenses. Construction and farming were the major income providers until the turn of the century. The Industrial Revolution created a big demand for entrepreneurship and employment. What became known as the First Migration caused millions of Blacks to leave the South and populate northern urban centers with the prospect of working in plants. The National Urban League was formed by well meaning whites to encourage Blacks to leave the South and provided assistance in assimilating them in these northern urban centers.
A counter to this was a movement created by Booker T. Washington, President of Tuskegee Institute, AL, which encouraged Blacks to remain in the South and develop agribusiness and locally based retail establishments to recycle their precious dollars and economically empower themselves. Based on the model established by the newly formed US Chamber of Commerce, Booker T. founded the National Negro Business League. There were 40+ chapters of this organization and they provided economic activity and leadership within Black communities from Texas to Maryland. Some of the business communities formed by these chapters such as Greenwood, OK and Durham, NC were burned to the ground by white extremists and then rebuilt.
Another organization was formed by white liberals of Western New York. The Niagara Movement founded the National Association for the Advancement of Colored People and appointed Harvard educated W.E.B. DuBois as its Spokesperson. The NAACP encouraged the federal government to become more involved in the assimilation of Blacks into American society and was opposed to the approach of Booker T. Washington. Mr. DuBois and Mr. Washington held famous debates over their differences.
As President Theodore Roosevelt rudely found out (after he had Booker T. Washington for dinner at the White House), it became politically incorrect to support Booker T. Washington and his vision of Black capitalism. While the Urban League and the NAACP gathered significant financial support, the chapters of the National Negro Business League withered with many becoming no more than social clubs. Black entrepreneurship went on the “back burner” and social programs began to spring up especially during the Great Depression. The Second Migration began as World War II evolved and the demand for increased industrialization to support the war effort created many jobs for Blacks leaving the South for the North and Western urban centers.
With the victory of World War II the nation established the GI Bill of Rights. This provided significant educational, employment and home ownership opportunities for veterans. Black veterans took full advantage of it and the new evolving American Middle Class had its Black representation. This provided a good base when the Civil Rights Movement would obtain new opportunities for all minorities and females beginning in the 1960’s. All industries of the United States, through law and serious litigation, became seriously diverse. The skill sets of African Americans transformed into managerial and executive expertise by the early 1980’s.
By 1990, the stage was set for this seasoned crop of educated and experienced business executives to venture into entrepreneurship. The timing was right for organized business organizations addressing and promoting Black business ownership as a vehicle to empowerment and a guarantee for the gains realized from the aforementioned experiences. The vision of Booker T. Washington was ready for a big rebound.
The National Black Chamber of Commerce, Inc. was formed in May, 1993, with 13 local chapters. At the time, according to the US Census Bureau, there were 300,000+ Black owned businesses doing $33 billion in annual sales. Today, according to the US Census Bureau, Black businesses are more than 1.5 million strong with sales exceeding $88 billion. According to the Selig Center for Economic Growth at the University of Georgia, Black consumers have buying power after taxes of nearly $1 trillion. Economically, African Americans are the fastest growing economic segment of American society. The NBCC and its 140+ chapters are proud to have been active participants in this phenomenal growth.
Despite the phenomenal growth of small business including all segments of minority populations, the amount of available technical support resources has been on a steady decline. When the NBCC was formed, the Small Business Administration had an annual budget of $980 million and a staff of over 5,000 trained employees. Today, that budget is less than $400 million and the workforce has shrunk to less than 1700 very demoralized employees. It is a conspiracy.
The downturn has taken its toll. Black business, when the Clinton Administration arrived, was at 6% of all federal procurement. Today, it is at 1%. It is time to stand up and fight to win our share back. The good news is that Black Capitalism has arrived and nothing is going to turn us around. On a worldwide basis we are soaring.