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Published by Niche Marketing & Planet Mogul, 2017-04-08 19:52:15

Brief History on Minority Business Enterprise

Minority Business Enterprise

_____________________________
A Brief History of Minority Business Enterprise
James H. Lowry
Billion Dollar Roundtable
August 19, 2015
Plano, TX

BDR Speech August, 2015

 

I have been asked to discuss the evolution of minority business by the Billion Dollar Roundtable
(BDR), an institution that I have been honored to partner with for fourteen years.

Although the fastest growth for Minority Business Enterprise has occurred over the past fifty years,
many historians will tell you minorities have been involved in the US Free Enterprise System since
1776. At the beginning of the 20th century, Blacks and Hispanics had robust businesses serving their
communities in inner cities and rural areas. We will never forget the riots in Tulsa where jealous
non-minorities destroyed millions of dollars of businesses overnight. Ask John Rogers of Ariel
Capital whose grandfather was a victim of this riot.

We cannot forget the contributions of our Native American, Hispanic, and Chinese citizens who
helped build the west. I could devote more hours to discussing the many contributions of these
ethnic groups, and their role in building our great country, but I focus my remarks on the past 65
years. In the early 50s, growing up in Chicago, I saw many businesses flourish, the most significant
being the businesses started by icons such as John Johnson, Earl B Dickerson and Madam Walker.
However, for the majority of the individuals living in Chicago and other communities, business and
entrepreneurship was not encouraged or supported.
We began to see a major change with respect to minority business development with the start of the
Civil Rights Movement.

The 50s – Civil Rights Movement led by Martin Luther King
Demonstrations in numerous places throughout the United States where people lost their lives,
forced our nation to address historical discrimination and barriers to change. Initially the focus was
on securing the right to vote and equal access, but soon minorities started to demand opportunities
to grow businesses.
BDR Speech August, 2015

 

The 60s – War on Poverty led by Lyndon Johnson
In response to the riots of the 50s, President Lyndon Johnson’s administration designed the war on
poverty. There was a massive investment in urban and rural communities that started many small
businesses and more importantly the beginning a class of minority entrepreneurs, managers in the
poverty programs. I saw it firsthand working in one of the nation’s first Community Development
Corporations (CDCs) in Bedford-Stuyvesant. CDCs were a noble concept that did not work mainly
because community boards were ill-equipped, under-utilized, and had no incentive to manage
businesses. The US Free-Enterprise System demanded inspired entrepreneurs to lead, no appointed
community boards.

The 70s – Black Capitalism led by Richard Nixon
President Richard Nixon designed its initiative on Black Capitalism. This began as an alternative to
the poverty programs. The blueprint for this phase was written by a Harvard trained lawyer and
Wall Street entrepreneur who wrote two major books, Black Capitalism and the Black Power
Imperative, Ted Cross. However, the real change agent was White House Advisor, Bob Brown: a
visionary from North Carolina. Highlights from this period were the

-­‐ SBA’s Section 8(a) program that was established to enhance federal purchases from socially
or economically disadvantaged owners of small businesses.

-­‐ Office of Minority Business Enterprise that was established with the passage of Executive
Order 11458 in order to provide minority business owners more federal resources.

BDR Speech August, 2015

 

-­‐ Three critical amendments and laws that were passed:
o The first was an amendment to President Jimmy Carter’s $4 billion public works bill,
an alteration that requires state, county, and municipal governments seeking federal
grants on public works projects to set-aside 10 percent of contracts for minority-
owned firms.

o The second was Public Law 95-89 which increased loan authorizations and surety
bond guarantee authority to minority businesses and helped Congress enact the
Community Reinvestment Act, which encouraged banks to help meet the credit
needs of the communities in which they operate, including low- and moderate-
income neighborhoods consistent with safe and sound banking operations.

o The third was Public Law 95-507, which mandated that bidders for federal contracts
in excess of $500,000 for goods and services and $1,000,000 for construction submit
prior to contract award, a plan which includes percentage goals for the utilization of
minority businesses.

Minority business had its fastest growth in the early 80s with the government acting as the catalyst
and the private sector representing the accelerant.

80s – Private Sector Awakening (Accelerated growth in the 80s)
During this period of time, the key change agents were Congressman Parren Mitchell, Rev. Jesse
Jackson, the NMSDC, and the Hispanic Chamber of Commerce, and many others.

BDR Speech August, 2015

 

Although President Nixon initiated the progress in the 70s, it was President Carter who accelerated
the growth of minority businesses with advisors such as Richard America, Ron Brown, Al Osborn,
Len Greenhalgh, and the Black and Hispanic Mayors Carl Burton Stokes, Richard G. Hatcher,
Henry Cisneros, Andy Young, Maynard Jackson, and Ken Gibson. With the leadership of the big
three automotive companies in Detroit, other Fortune 500 companies started designing and
implementing State of the Art programs represented by the companies in this room. I was proud of
being apart of this change effort with

-­‐ Preparing the report: The New Strategy For Minority Business Enterprise Development in
1978 for the Department of Commerce;

-­‐ Working with Ford, AT&T, Pepsi and other major corporations;

-­‐ Developing the first Minority Business Enterprise Development program for the City of
Chicago.

90s – Supreme Court Challenges
Growth continued within the M/WBE industry, but legal challenges slowed the momentum.

-­‐ City of Richmond v J.A. Croson Co.
-­‐ Adarand Construction Inc. v. Pena
-­‐ Engineering Contractors Association of South Florida, Inc., et al v. Metropolitan Dade

County
And the focus shifted from Supplier Diversity to Diversity and Inclusion. The positive impact of the
shift was a dramatic increase in the number of women and minorities on corporate boards. The goal

BDR Speech August, 2015

 

of our 1978 study was to achieve parity by the year 2000. Unfortunately, we are nowhere near
parity as minorities.

21st Century
The dramatic growth expected at the beginning of the 21st century has not occurred. When you look
at the growth of the U.S. and world economy, the vast sums of capital available, the size of global
markets in South America, Asia, and Africa, and the fact that a person of Color occupies the White
House, one is forced to ask the question, why not? Len Greenhalgh and I outlined some of the
barriers and strategies for growth in our book Minority Business Success. Our joint effort was based
on our combined knowledge of over 80 years and the lessons we learned from historical events.

Not wanting to be an alarmist, but I strongly believe that we all have to change our mindset and
change dramatically how we participate and collaborate in the global economy and invest in growth
industries in the U.S, the most significant being the Tech industry. We should all think about how
we can leverage the work of Jesse Jackson and the Rainbow PUSH Coalition, Brian Tippens at HP,
Freda and Mitch Kapor, and many others in Silicon Valley to increase diversity and inclusion
efforts in Silicon Valley. There are major plans developing from the tech industry that will affect
every industry, every company, and governmental agency in the U.S. If we miss out on this major
economic and business change, we will not only lose many of our businesses, but our ability to
represent our community at the tables of power.

If we are to be successful as we face this challenge, it will depend on us in this room: the MWBE
leadership, organizations, corporations and MWBEs. The BDR and its leadership can assist and
facilitate, but it will depend on us. One of the most innovative and brilliant leaders in the tech field
is Joan Robinson-Berry of Boeing. She has helped many women and minority entrepreneurs grow
BDR Speech August, 2015

 

their businesses, but in a manner that helps not only the entrepreneurs, but also Boeing and the
communities they serve. Listen to Joan Robinson-Berry; she brings much wisdom, dedication, and
commitment to the struggle.
We can learn from history in developing our businesses to survive in a rapidly changing global
economy. But if we want to achieve parity we have to think big, we have to work collaboratively,
and have to expand globally. As long as I am able, I will continue to be engaged as will Len
Greenhalgh, but there is much to be done if we even want to dream of achieving parity.

BDR Speech August, 2015

 


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