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How many minority-owned businesses do you know? Probably not very many. Investors often overlook Minority-owned businesses, and as a result, they may face significant obstacles to growth. But there is hope! Join the conversation with David Ebrahimzadeh about economic inclusion and how it’s helping minority-owned business owners grow their companies in our latest blog post!
What is Economic Inclusion and How Does it Contribute to the Growth of Minority-owned Businesses?
Economic Inclusion is a term coined by the National Minority Supplier Development Council to describe policies and practices that help minority-owned businesses access opportunities for economic growth. Economic inclusion aims to make it easier for organizations, corporations, and local communities to expand their supplier base with more diverse suppliers – including those owned by minorities or women. By making it possible for all types of business owners – regardless of race – to compete fairly in the marketplace, we can promote greater equality throughout our economy as a whole! Economists have found that diversity plays an important role in promoting innovation. Greater workforce diversity means there are more perspectives at work within companies, enabling them to develop creative solutions and new ways of thinking about existing problems. The result? Better performance and increased productivity – a win for everyone!
The Benefits of Economic Inclusion for Both Minority-owned Businesses and Their Communities
There are many benefits to economic inclusion, but the most important is that it helps improve communities. Helping minority business owners access opportunities they might not have had before can help them provide more jobs in their neighborhoods, which means more people working locally. This also means there will be shops and restaurants nearby to serve those who work at these businesses, better-performing schools, and lower crime rates due to higher ownership of homes (and the corresponding community involvement). The result: stronger local economies! When small businesses grow into larger ones, this stimulates job growth throughout other sectors – including manufacturing and service industries. Investing in minority-owned businesses helps strengthen the economy as a whole.
Economic Inclusion in Action – Specific Examples from Around the Country
There are many examples of economic inclusion initiatives throughout the country, but some notable ones include:
- The Minority Business Development Agency (MBDA) is an agency within the U.S. Department of Commerce that provides business assistance to entrepreneurs and small companies owned by minorities, women, veterans, or people with disabilities. MBDA advocates for federal policy changes to promote opportunities for disadvantaged groups, which help them access emerging markets through mentoring programs, studying trends affecting these populations, and more!
- One example of how this works on a community level is the National Women’s Business Council’s research about barriers to growth for small businesses owned by women. Their research found several barriers to access financial capital, such as the high cost of childcare and lack of flexible work schedules. The NWBC has advocated for changes within government programs like SBA’s SCORE program and CFPB’s Women-Owned Small Business (WOSB) Survey, which helps identify trends in lending towards women-owned businesses with an emphasis on minority business owners too.
Economic Inclusion is Working – Here Are Some Examples!
Economic inclusion isn’t just good news for those who want to see more diversity – it also makes sense from a pure dollars and cents perspective. Research shows that economic inclusion strategies lead to higher levels of firm performance! For example, an organization called The Boston Compact was created to help promote business growth and development within the city of Boston. They provide small businesses with training programs, financial management services, space for collaboration among entrepreneurs, and more!
How We Can Help Promote Economic Inclusion in Our Own Lives, Neighborhoods, and Communities
There are many ways that we can all help encourage economic inclusion throughout our own lives – whether at work or outside of it. For example:
- You are supporting minority-owned businesses whenever possible is one way to support this goal. When you see a minority-owned business advertising they accept credit cards as payment – think about how much easier your life would be if you could pay them just by swiping your card instead of having to carry around cash!
- Volunteering and donating your time is another great way to support this important movement. Organizations like The United Way (particularly their Start Small, Finish Big program) help provide small business owners with the tools they need for success – everything from financial training, mentorship programs, and more.
- Encouraging entrepreneurship in marginalized groups who might not otherwise think about starting a business can be very rewarding as well. You’re teaching kids how to create an online portfolio or helping women develop leadership skills that will allow them to access opportunities previously unavailable.
The importance of economic inclusion in all communities is the moral imperative it represents and an investment opportunity. If minority-owned businesses are given greater access to capital and contracts, they will grow their enterprises even further at a time when our country needs more jobs for everyone. We can help you promote economic inclusion by donating your skills or money to organizations that provide services like mentoring programs or grants with matching funds for start-up costs.
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