INTRODUCTION
To the distinguished President of Tuskegee University, Dr. Benjamin Payton, Dr. Blackwell, the Tuskegee family, Mayor Johnny Ford, Mr. W. Ronald Evans, President of the National Business Leagues, Dr. Velma L. Blackwell, faculty, guests ladies and gentlemen. On behalf of the President of the United States, and he U.S. Secretary of Commerce Don Evans, I bring you warms greetings from the nations' capitol.
It is a special honor and privilege for me to here at Tuskegee. In the biblical history of creation, we have been taught the words “in the beginning” God created the heavens and the earth and all therein, and it was good. In the developmental history of educational and entrepreneurial leadership on behalf of Africans in this nation known as America, it is widely recognized that in the beginning there was Tuskegee.
Tuskegee, the vision of Dr. Booker T. Washington, who transformed an idea into the critical center of early innovation and entrepreneurial energy. Tuskegee, the academic and spiritual home of George Washington Carver. The training center during World War II, for Negro pilots who later distinguished themselves in the annals of aviation and military history as the Tuskegee airmen.
MBDA: THE ENTREPRENUERIAL ORGANIZATION
[The Transformation from Administrative Agency to Entrepreneurial Organization]
THE MBDA VISION: “Without a vision, the people shall perish”.
The Minority Business Development Agency (MBDA) is an entrepreneurial and innovative organization committed to wealth creation. Our mission is to enhance the growth and expansion of minority business enterprises (MBE’s) nationally. During the past three and one half years there has been a strategic effort to transform MBDA from an administrative agency to an entrepreneurial organization.
We are committed to focusing our technical and managerial assistance to MBE’s based on the culture and characteristics of the “entrepreneur”. The great scholar and guru of business entrepreneurship is Dr. Peter Drucker. Dr. Drucker noted year ago that the great success, wealth and competitive advantage of the United States compared to the rest of the world is the fact that we are an “Entrepreneurial Economy” An economy based on highly creative innovative invention, and discoveries. An entrepreneurial class that is unafraid to risk, an innate sense of urgency, and a competitive drive and pathos to be the best in the world.
The American entrepreneur and the American worker when joined in a common goal or challenge are unsurpassed in the industrial and modern age. We are the leaders in the age of technology. As our good friend Dr. Alvin Toffler notes, we represent the “Third Wave”
The new MBDA seeks to immolate the culture and character of the entrepreneurial mindset. We believe that social capitol is equally important as financial, political and intellectual capitol. We often say “where there is a contact, there is a contract” We believe that you are a winner or a whiner, victor or a victim, a contender or a pretender. We believe in the national minority business enterprise community. We believe in you. I am hearing to say today that we believe in TUSKEGEE.
We believe there are Three Keys to Entrepreneurial Success. The first, is Access to Capitol; the second, Education, the third Technology. The major conclusions of the Report note that “…although entrepreneurial energy is high and the number of minority-owned firms are increasing, entrepreneurial success appears to be lagging – minority-owned businesses are remaining smaller than other (majority and female- non-minority firms).
We have also learned from the Kaufman Report on Entrepreneurship and Access to Capitol that minority males, (particularly Hispanic and African males), have a very high propensity to pursue entrepreneurial endeavors than any other group. Unfortunately, they fall through the cracks at the stage of accessing capitol and thus are underrepresented in the business enterprise arena.
We believe in entrepreneurial parity, a strategy to “move the number” and to challenge the “opportunity gap” between the number of the minority population in the United States, and their proportional share firms, number of employees and gross receipts.
[Overview of National SMOBE Data ]
I would like take a few moments to briefly inform you about some other developments at MBDA and the general direction we’re moving. First, the President’s 2005 Budget request to Congress includes a recommended increase of $5.6 million in funding.
In addition, we’ll continue to make the business case about the importance of minority firms to the overall U.S. economy. We believe that minority firms are critically important to the overall U.S. economy. When you look at a number of key factors that drive the business case for increased investment in MBE’s – the fact that minority firms are growing much faster than U.S. firms, that the minority population is expanding much more rapidly than the majority population and that business development within minority communities generates long-term employment and economic growth in this country – the national imperative becomes more apparent. Unfortunately, no one has developed a quantitative economic argument about the danger of policy and strategic mis-step regarding these opportunities. We cannot as a nation continue to limit the focus on minority firms and their growth from governmental or the private sector attention.
Secondly, MBDA, over the past year, has re-defined our target client. For some time, we’ve been discussing the need to focus many of our services on developing larger and stronger minority firms – firms that create employment and wealth in minority communities. One of the startling statistics we’re aware of is that 80% of minority firms generate $100,000 or less in annual revenues. There are approximately 2.5 million firms in this size range; however, these firms employ just 246,000 employees. At the other end of the scale, minority firms with $1 million in revenues constitute only 2.8% of all minority firms. However, these firms generate 55% of all jobs of minority firms and 65% of all revenues.
To truly empower minority firms, we believed that it is important to put more emphasis on the development of larger firms than we have in the past. These are the firms that have the most potential to successfully play in the government and corporate supply chains and to work with smaller minority firms over time to move them to the next level in operations and revenues. For these reasons, MBDA is increasingly focused on working with high-growth minority firms or those with at least $500,000 in annual revenues. This effort is known as the Strategic Growth Initiative (SGI).
Third, MBDA as part of the White House Initiative on Entrepreneurial Development, we provide coaching assistance to the National Urban League (NUL) in the areas of technical and managerial assistance targeted nationally to micro (start-up) businesses in urban and rural areas. This effort as outlined by the President at the National Urban League Conference earlier this year welcomes the focus of business enterprise development by traditionally civil rights and social services organization. We embrace this new emphasis on business enterprise development by the Urban League and welcome as we move forward the participation of other like minded organization. I certainly would encourage the National Business League with its historic roots in business development to engage in the White House Initiative on Entrepreneurship.
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Minority Business Enterprise: The National Priority
Tip O’Neil, the former Democratic Speaker of the U.S. House of Representatives is famous for his observation that “all politics are local”. Today, I believe we would all agree that business is global. This Administration through the MBDA has pursued the business case for minority business enterprise in the global (world-wide) economy. For African Americans and other minorities, participation in the world-wide economy is now a business imperative. Unfortunately, the business participate rate for African Americans lags behind all minority groups. Although Access to Capitol, Education and Technology are the three keys to entrepreneurial success, the mounting evidence is that minorities in general and African Americans in particular, do not see themselves in business or as business owners.
Looking forward to the future, I content that if America is to maintain its preeminence in the world market place, we must ensure that our entrepreneurial economy is alive and well. Accordingly, we have to put in place strategic business policies and an infrastructure that fosters an environment where entrepreneurs can realize their hopes and dreams of business ownership and prosperity.
Predictions abound that the fastest growing population segment in the U.S., between now and the year 2050, will be among racial and ethnic minorities. Over the last decade, minority businesses have become a driving force behind U.S. economic and productivity growth. In fact, the growth of minority owned businesses have substantially exceeded those of non-minority firms during the 1990’s. Collectively, minority businesses generate 4.5 million jobs and $591.3 billion in gross receipts. How we plan for this demographic shift will significantly impact our domestic living standards and the competitive advantage of the United States in the worldwide economy.
According to a white paper by Professor Matthew J. Slaughter of the Tuck Amos School of Business at Dartmouth which was presented at the 22nd Annual Minority Enterprise Development Week Conference this September,”The success or failure of minority-owned businesses will increasingly drive the success or failure of the overall U.S. economy.” Professor Slaughter and his co-author, Andre B. Bernard, make the business case of why minority business enterprise is and should be the national priority.
By masterfully linking population demographic and historic labor forces trends to current longitudinal data bases, Slaughter and Bernard have reopened the discussion of U.S. productivity to shed light on the future.
For the last three decades, the United States has had the competitive advantage of a rapidly expanding U.S. labor force across all racial and ethnic fronts. Women entering the labor force, the baby boom generation and the baby boom echo have provided the U.S. with unprecedented labor skill, innovation and entrepreneurial energy. In future decades, however, the U.S. labor force will grow much more slowly than in the past and any growth that is realized will be accounted for entirely by minority groups. A large contingent of this growth will be from immigrants— individuals and families from different shores and distant lands who continue to see America as the place of freedom opportunity, security and prosperity. Slaughter and Bernard caution us that a “slower growth in the U.S. labor force will mean greater pressure to raise the rate of U.S. productivity growth.” Based on their analysis, this can only be accomplished by generating higher incomes and greater productivity from minority workers, increasing business ownership among minorities and building existing minority firms into larger and more dynamic enterprises.
America’s economy was born out of an entrepreneurial spirit. We have a legacy of free enterprise and innovation that has established a historic preeminence of competitive advantage in the world-wide economy. Entrepreneurs develop and commercialize innovative products and services; generate new industries and firms to replace those that have run their course; and create employment opportunities and wealth that is reinvested in new economic enterprises and in communities. Yet, minority-owned businesses only account for fifteen percent of all U.S. firms, four percent of all U.S. employees and three percent of total gross receipts.
As the National Director for the Minority Business Development Agency (MBDA), I believe minority business enterprises present a period of historic and dynamic growth opportunity for the United States and we cannot accept the status quo. Our nation needs the burgeoning racial and ethnic minority population to embrace an entrepreneurial spirit and to succeed. We must approach the demographic change with open eyes and champion the formation of yet another “Nation of Immigrants” who, with America’s historic minority communities from the rural south and urban centers, will continue the growth and productivity which is the American entrepreneurial legacy. By adopting a policy that makes minority business enterprise “the” national priority, MBDA and the Bush Administration are striving to increase business ownership among minorities and thus improve the overall business participation rate particularly for African American and Hispanics. It is only through becoming major stakeholders in the American economy that minority entrepreneurs can significantly enhance America’s gross national product (GDP), consumption, savings, and tax base. We must move forward to the future now!
THE VALUE OF AFRICA. I applaud Mr. Ronald Evans pledge this morning to commit the National Business League to Too many Americans of African descent do not appreciate the value of Africa. We do not recognize how much we can and should give back to Africa. We grossly underestimate how much Africa wants to connect with us and how it looks to America for leadership and partnership. The minority business enterprise (MBE) community in America, despite its challenges (and there are many) has the advantage of living in a wealthy and historically secure country. The emerging business enterprises in Senegal face similar challenges of: 1. Access to Capitol; 2. Education (financial literacy); and 3. Technology (e-Commerce).
Unfortunately, as with the debate between Dr. Washington and Dr. W.E.B. Dubois, there still remains an intellectual schism, a split among the Black leadership class with regard to achieving the upward, social, political and economic mobility of African Americans specifically, and the African Diaspora generally around the globe.
This schism remains essentially between two rival camps. The Booker T. Washington business enterprise school of business enterprise and the W.E.B. Dubois school of the Talented Tenth. Analytically, a divide between the civil right agenda and the “cast your bucket where you are (up from the bootstrap) agenda or what I term the business enterprise agenda.
Tonight, I am here to reinvigorate the business enterprise agenda whose historic origins and ancestral roots are here at Tuskegee. Why, because today “Black Power” is the Power of ownership. Possession, so it is said, is 99% of the law. We must become a people who recommit itself to ownership. The main reason why Black political power has not brought economic clout is because Blacks do not start enough new businesses. Our heroes should not be athletes or entertainers, but those individuals, families and communities that create jobs, encourage wealth creation and invest in our children’s future.
We have a Black leadership class dominated by strategy of victimization and reparations at the expense of a strategy of victor and appropriation. We have a leadership class dominated by those who whine instead of those who to lead by winning. We must resist the dogmas of the past. We must seek a beginning building on the past, learning the lessons from failure and building on the strength of our successes. The new approach of which I speak reaches back to Dr. Washington and the notion of establishing strategic competitive advantage for the participation across the economic spectrum of the worldwide economy. Let’s look at a comparison of the Traditional Model versus the Entrepreneurial Model.
The National Business League must re-emerge and re-establish itself as the premier business organization for African Americans. We all owe that to Dr. Booker to Washington. We also owe Dr. W.E.B. Dubois a rededication to be the best scholars in the world, more than the Talented Tenth; we must strive to be “The Talented”. If we can accomplish this designation in sports, we can accomplish it in scholarly endeavors. Education or education training in a trade should be our mantra. It is not an "either /or" proposition. It is not a zero sum gain. We must as Dr. Ray noted at lunch combine the two strategies.
Let me close with a poem I wrote last January as I flew across Africa. It is entitled “Son to Mother.”
