Commentary: Entrepreneurship offers path to wealth for minority communities

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The Michigan Minority Supplier Development Council recently released a new analysis estimating that it will take more than three centuries to achieve economic parity in minority communities based on the current growth rate of the nation’s minority entrepreneurs.

Simply put, we must do better. And all of us — corporations, entrepreneurs, and everyday consumers — play a critical role.

Over the past year, corporate America raised its voice loud and clear with renewed commitment to overcome racial inequity. While we applaud those sentiments, we offer that an even louder and clearer message would be delivered by long-range, intentional efforts to revamp supplier inclusion processes and establish significant goals for minority firms. Such an inclusive approach is among the most sustainable methods to truly impact racial inequity as it drives wealth creation for minority-owned businesses, their employees, their suppliers and ultimately impacts ALL communities for greater good. Let me be clear. Certified minority firms aren’t seeking a handout, but access to compete for real opportunities on a playing field that has been uneven and unjust for generations.

Minority business certification works because minority business enterprises or MBE over-index in job creation for minority talent — not relegating such talent to lower-level roles but allowing them to fulfill key operational roles.

MBEs must also drive greater MBE-to-MBE spend, excluding only payroll and taxes from the opportunities for which they allow MBEs to compete. These actions strengthen the ecosystem for which minority certification was designed and create opportunity for the masses. Unlike well-meaning public check presentations, lucrative job experiences, investments and business opportunities drive tangible and sustainable impact.

Why does this matter? Numbers don’t lie.

Today, the median wealth or net worth of families by racial group is as outlined below:

  • Black family is $24,100
  • Latino family is $36,100
  • Asian family is $60,000
  • White family is $188,200

These numbers reflect as much as an 87 percent variance by race. Numbers for education, home ownership and wage/compensation follow similar patterns and for the most part, the patterns have not improved for more than 50 years and the disparity adversely impacts all communities.

Sadly, we continue to repeat the same conversations about racial and economic equality that were raised in the 1960s, yet we’ve seen only a one-percent increase in the growth of minority-owned firms grossing more than $1 million in annual revenue over the past 50 years.

Similarly, in that same timeframe, the average minority spend goal that corporate America once had has not only remained stagnant at less than 5 percent (excluding only payroll and taxes), but is now divided among multiple ethnicities, plus women, veterans, LGBTQ, disabilities, and other classifications.

Corporations committed to inclusion stress the value of third-party certification in their procurement processes as their goal is to vet independently certified firms. Through our certification process, the MMSDC is committed to identifying and vetting minority business enterprises. We certify firms based on three main requirements:

  • At least 51 percent minority ownership.
  • Active day-to-day management by at least one qualified ethnic minority engaged in daily operations.
  • Independence and control.

Certification is most suitable for firms seeking access to major corporations and governments and their respective supply chains. We ensure that our certified businesses are reviewed at least annually and must not only report all changes but must meet all criteria regardless of their size or tenure. Likewise, we routinely engage objective national experts to review our findings. So, you can count on the credibility of our certifications.

Now in its 44th year, the MMSDC works tirelessly to help minority-owned businesses successfully develop their capacity and grow their operations through access to capital, markets and other resources — creating jobs and building generational wealth in communities of color.

The ripple effects of this work are significant. In Michigan, approximately 1,200 certified MBEs — ranging from startups to multi-billion-dollar firms — generate $36 billion in annual economic output and 205,000 jobs.

We remain committed to economic inclusion through vibrant and profitable business partnerships. We ask both corporate America, businesses of color, and all consumers to share in that commitment. Only then can we realize a level of true economic parity that benefits all communities in far less time than a few centuries.