9.22.2010

Helping Disadvantaged Groups or Just Keeping Them Permanently Disadvantaged


I won't say where I was because I don't want to get anyone or myself in trouble, but I was sorely disappointed in the tenor of conversation at a recent business gathering I attended. I went wearing my Enterprise Center Board of Directors hat, to hobnob with other minority entrepreneurship advocates, swap notes, and strategize about how to better advance the cause of ventures run by people from traditionally disadvantaged groups. Instead, I got a little bit of my bubble burst.

To me, accelerating minority entrepreneurship is a matter of regional and national competitiveness: in an increasingly globalized world, those who minimize institutional barriers that hinder entire groups of people from adding their skills and contacts into the pot will suffer. It's also a matter of equity: starting and growing a business and then cashing out for a big wad of money is the way to generate wealth in this country, and it is the wealth gap and not the income gap that is the real difference-maker when it comes to the financial plight of some minority groups.

What this means is that if you are a minority entrepreneur, your path to success comes from making your unique contribution to a complex and competitive economy, a contribution that you alone can make, which the economy is worse off for if you can't make it. And your measure of success is the ability to do that well enough and long enough that what you have created in the end is a great company that has inherent value, not as a minority-owned firm but as a successful firm; failure to do so robs you of the ability to sell your firm for the highest bid, stuck as you are to keeping it within the family or selling to another minority if the biggest part of its worth is its minority ownership status.

I hope nothing I have said above is too terribly controversial or innovative; it just is what it is, and I feel I have no special dispensation of insight on the subject. Alas, this is not what I saw at this recent convo. Everyone seemed to be relegated to figuring out how to game the set-aside rules to max out on business opportunities afforded to certain designations of disadvantaged businesses. When I proffered that it was paramount to build value outside of one's certified status, I got glares of confusion and disbelief that marked me as a maverick and my views as decidedly not welcome there.

I don't want to sound high and mighty here: I understand that entrepreneurs have businesses to run, revenue to earn, workers to pay, and I understand that advocates have budgets to protect, missions to fulfill, and performance targets to hit. But, at a big picture level, the whole thing strikes me as horribly unjust. It is as if everyone has decided that certain disadvantaged groups are good for nothing more than second-class status, left to fend for the scraps reserved for them while the rest of the economy rages on right next to them. Businesspeople themselves seemed to think there was no other playing field to play on, and so thoughts turned to how to maximize their advantage on this secondary, much smaller playing field. And advocates had no regard to this shunting of certain groups off to the side; even as they claimed to be all in for them, it was to cement their second-class status rather than to help them compete for mainstream success.

This is not the approach we advocate at The Enterprise Center, or that I bring to related studies I do at Econsult Corporation. But, sadly, it is the M.O. for many who circulate in this space. The status quo may not be fair, but if I can make a decent living off of its rules, why not do so instead of changing the very rules I've figured out how to benefit from?

Perhaps I am being naive, but I for one am not ready to give up on an economy in which everyone participates, and in which everyone wins when certain groups who need extra help to participate get that help. I am not at all ready to concede that certain groups need not apply to this economy, and can be left to compete for the scraps set off to the side, with no real prospects for success to scale given the relative tininess of opportunities that have been walled off for them. That approach does not overcome the very real disparities faced by some disadvantaged groups; rather, it institutionalizes and reinforces their permanent underclass status.

That does not sound to me at all like minority entrepreneurship advocacy. I hope that in time we will see more instances of what does pass for true advocacy. Unfortunately, I did not see much of it at the meeting I recently attended.

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