RELEASE: First-of-kind Toolkit Offers Alternative to the Long-standing Failed Approach to Advance Minority- and Women-owned Businesses

FOR IMMEDIATE RELEASE
Contact: Yusef Robb, Accelerator for America, 323-384-1789

FIRST-OF-KIND TOOLKIT OFFERS ALTERNATIVE TO THE LONG-STANDING FAILED APPROACH TO ADVANCE MINORITY- AND WOMEN-OWNED BUSINESSES, SEEKS TO PROMOTE INCLUSIVE RECOVERY FROM PANDEMIC

Toolkit Measures Black-, Hispanic-, Asian- and Women-Owned Businesses in Top 100 Metropolitan Areas

Los Angeles, CA — Today, Accelerator for America and Drexel University’s Nowak Metro Finance Lab released the Small Business Equity Toolkit, which offers mayors and economic development leaders in the nation’s top 100 metropolitan areas unique insights and innovative strategies for growing Black-, Hispanic-, Asian- and Women-owned businesses. The toolkit offers a data-driven, evidence-based approach to help cities close the long-standing racial, ethnic, and gender wealth gaps that have been exacerbated during the pandemic.   

Developed in partnership with the Mastercard Center for Inclusive Growth, the new Toolkit is comprised of the Small Business Equity Tool (SBET), a data-driven measurement tool, and the National Inclusive Metro Recovery Playbook, a set of recommended best practices to create a more inclusive and sustainable economic recovery. For the first time, the combined use of these tools provides a snapshot of the state of minority- and women-owned businesses prior to the pandemic and a metro-level roadmap for mayors and economic development practitioners to chart a clear, actionable course for an inclusive local recovery that uplifts minority communities.

The Toolkit draws on research, expert analysis and pioneering approaches that cities are implementing to strengthen their small business ecosystems. In addition to the National Playbook, Accelerator for America and Drexel have also created individual Recovery Playbooks to help leaders in Birmingham, AL; Dayton, OH; Los Angeles, CA; and St. Louis, MO develop tailored strategies based on the small business gaps in their metro regions. 

“Pre pandemic, our racial and gender wealth gap trapped too many Americans and held back our entire economy,” said Aaron Thomas, President and CEO of Accelerator for America. “We must use our recovery from COVID-19 as an opportunity and inflection point to aim for equity in business ownership for Black, Asian, Hispanic, and women entrepreneurs to build a stronger, more resilient economy within underserved communities and for all of America.”

“Leading a successful recovery from COVID-19 means closing persistent racial and gender wealth gaps — and making that mission central to our policies, programs, and leadership,” said Mayor Eric Garcetti of Los Angeles, CA, who co-founded and is Advisory Council Chair of Accelerator for America. “The Small Business Equity Toolkit is a roadmap for economic justice, fairness, and growth — giving us insights into the inequities laid bare by the pandemic and helping us create a blueprint for unlocking inclusive prosperity across America.”

“As we begin to rebuild a more inclusive and sustainable economy, minority- and women-owned businesses are primed to serve as catalysts for growth and job creation,” said Shamina Singh, founder and president at the Mastercard Center for Inclusive Growth. “By harnessing the power of data, we can empower local communities to develop evidence-based strategies that help close the wealth and opportunity gaps in our country.”

“We cannot waste this opportunity to build all of our communities back even stronger than they were before,” said Mayor Nan Whaley of Dayton, OH, who is a member of the Accelerator for America Advisory Council. “Creating strong pathways for business ownership for Black, Asian, Hispanic, and women entrepreneurs is essential to ensuring everyone is part of our recovery.”

“Black residents make up 71% of Birmingham's population but only 6% of the city's employer firms,” said Mayor Randall Woodfin of Birmingham, AL. “One way we're working to address that gap is by looking inward at the City of Birmingham's spending capacity with minority-, women-owned, and disadvantaged business enterprises, and we are rallying corporate and institutional partners to do the same. The Recovery Playbook and Small Business Equity Tool are valuable resources to help us craft additional strategies for an inclusive economic recovery."

“The Small Business Equity Toolkit is a smart synthesis of data and action, aligned to this crisis.” said Bruce Katz, Founder of Drexel University’s Nowak Metro Finance Lab and member of the Accelerator’s Advisory Council. “We hope cities and metros will use it to set targets and design evidence-based strategies that leverage their distinctive economies and harness expected federal and private investment to drive inclusive growth.” Read Bruce and Aaron’s recent newsletter on the toolkit here.

The Small Business Equity Tool provides unprecedented insights on the state of Black-, Hispanic-, Asian- and women-owned businesses in the nation’s 100 largest metropolitan areas, and it provides groups of comparison peer cities based on demographic and economic characteristics. The Tool also details the gaps that exist between each group and their white-owned or male-owned counterparts and for comparison and measurement against the nation’s top-100 metropolitan areas.

The Tool uses a Small Business Equity Index comprising three categories of metrics to reveal the baseline of city and metro small business economies prior to the Coronavirus pandemic: the number (business density), size (average annual revenue), and sector of businesses (percentage of businesses in high-wage sectors). These metrics have never been compiled before. As a result, for decades, local, state, and federal initiatives focused solely on increasing the number of businesses owned within a particular demographic group while ignoring the size and type of businesses. The Tool reveals just how short the nation’s approach to increasing Black wealth has fallen. Between 1972 and 2017, 3.7 million businesses with employees were added to the American economy. Just 100,000 of those were Black-owned. 

Furthermore, the Tool reveals that America must create seven times the number of Black-owned employer firms and double the average annual revenues of Black-owned businesses to achieve equity with white American business owners. The growth of these businesses is a function of both business size and the sector in which they operate.

The Tool draws on Census data from 2017, the most recent year from which relevant data was available. While it has been widely reported that there are roughly three million Black-owned businesses in America compared with more than 31 million white-owned businesses, the Tool illuminates the fact that these totals have limited utility when it comes to developing and implementing strategies to close our nation’s racial, gender, and ethnic wealth gaps. The Tool’s unique insights reveal that there are three Black-owned businesses for every 1,000 Black Americans compared with more than 20 white-owned businesses for every 1,000 white Americans. The Tool also reveals that Black-owned businesses in America had average revenues of $1 million compared with a $2.4 million average for white-owned businesses. It also shows that one out of every two Black-owned businesses are in the lowest-wage sectors (Health Care, Food Service, and Administrative), while only one out of every four white-owned businesses are in those sectors.

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