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Introduction
- The Kent State University Press
- Chapter
- Additional Information
Introduction Sincethe1970s, agrowing number of academiciansand public policyanalystshave focused critical attention on the important role of African American businesses in economic development. Consequently, an important body of literature is now available on this subject.1 While analyzing economic development from a variety of perspectives, many writers seem to agree that economic empowerment is one of the most critical problems facing the African American community today.2 ManystudiesofAfricanAmericanentrepreneurshiphavefocusedoneconomic developmentatthenationallevel;fewhaveexaminedthisphenomenonatthelocal level.3 This study complements the existing literature by providing an in-depth examination of African American businesses in Cleveland, Ohio, and its eastern suburbs. Cleveland was selected as the site of the study because it is a large urban center with a sizeable African American population, and hence it provided a good environment in which to examine some of the major issues selected for analysis.4 In this study, African American entrepreneurship is analyzed in the nineteenth, twentieth, and twenty-first centuries, with emphasis on the contemporary period (1960–2008). The contemporary period is important because it includes the civil rights and post–civil rights eras, which were important in expanding the political andeconomicopportunitiesavailabletoAfricanAmericans.Itwasalsoduringthis period that most of the businesses in this study were established. A critical question then becomes, to what extent have African Americans been able to use their expanded political opportunities to enhance their own economic well-being? This book adopts the definition of small businesses that was formulated by the Small Business Administration (SBA). According to Section 3(a) of the Small Business Administration Act, “A small-business concern . . . shall be deemed to be one which is independently owned and operated and which is not dominant in its field of operation.”5 Small businesses are further distinguished in this study as those in which the owners utilized fairly small amounts of capital (usually less than ten thousand dollars) to start their enterprises; employed fewer than five hundred workers; and earned fairly moderate rates of profit. Although the entrepreneurs in the study reported a broad range of profitability, 68 percent earned less than one hundred thousand dollars per year. Of this group, about half earned less than xxiii forty thousand dollars. Nonetheless, small businesses continue to be an engine of economic growth. According to Timothy Bates, “a growing body of evidence suggests that in recent years the small business sector has yielded the bulk of all new jobs. The highly publicized research of economist David Birch proclaims that firms employing fewer than 20 workers ‘have created about 88 percent of all net new jobs nationwide in the 1980s.’ More credible studies have pegged the small business share of all new jobs at 51 to 56 percent.”6 Small businesses possess a tremendous amount of potential to expand and grow if the owners have access to appropriate business training and technical assistance. Most large black businesses in the United States today started out small because few blacks had the benefit of inherited wealth or access to loans and other sources of capital. This study seeks to answer four major questions: How successful are African American entrepreneurs? What are the predictors of success? What unique problems are faced by African American entrepreneurs? What role does gender play in the economic equation? This study places African American entrepreneurs at the center of the analysis. Although my assistants and I interviewed some business owners over the phone, I also interviewed some of the owners in their actual business enterprises. This enabled me to make my research “user-friendly” in the African American community . As I have stated elsewhere, “the role of an academician at a university ultimately is to produce and disseminate knowledge which can be directed at real world problems.”7 Although the main focus of this study is African American entrepreneurs, white entrepreneurs were also interviewed in order to more clearly understand racial differences between the samples. Hence, over the duration of this research project, I have visited businesses in the inner city, the eastern suburbs, and the corporate area of downtown Cleveland. I have seen the types of business enterprises in operation, the business neighborhoods, the level of economic development in various communities, the employees of black-owned firms, and sometimes, their customers. The entrepreneurs became more than mere statistics. I also interviewed some customers and employees in addition to entrepreneurs who attended my workshops and seminars. I was able to develop a significant database on the characteristics and economic performance of the entrepreneurs. In the narrative portion of this work, special effort was made to replicate...