Black businesses as boon to city

Wiley A. Hall 3rd

July 23, 1992|By Wiley A. Hall 3rd

In 1952, an auto executive named Charles Erwin Wilson told the Senate Armed Services Committee that "what is good for the country is good for General Motors, and what's good for General Motors is good for the country."

Folks were aghast -- particularly at that last part.

To much of the country, Wilson's assertion that what is good for GM is good for the country illustrated the cynicism, the selfishness and egotism of corporate America.

Yet, we understand now that there was a certain truth there, too.

You take a weak automotive industry and you get a weakened economy. You take a weakened economy and you get a weakened America.

You get layoffs and recessions and budget deficits.

You get crime and substance abuse and a panic-stricken populace ready to follow any Pied Perot who offers simple, ready-made solutions to complex and difficult problems.

Now, a presidential commission is preparing to recommend that President Bush and Congress make minority-owned firms a national economic priority, arguing in effect that what is good for minority enterprises is good for everybody.

"In this context," says the U.S. Commission on Minority Business Development in a draft copy of its final report, "minority business programs will be seen as a tool for economic solutions, not an obstacle on the road to sustained economic growth. It can be demonstrated that such programs generate far more national wealth than they may consume."

The commission will recommend that Congress create a new agency within the Department of Commerce that will put all minority business development efforts under one roof.

It also will recommend that future federal assistance to minority business enterprises focus especially on ways to increase minorities' access to sufficient capital and that business development be steered toward industries Congress deems crucial to the national economy.

Some of the commission's recommendations are far-reaching and many, such as the proposal to consolidate programs in one agency, will be controversial.

But don't expect the kind of uproar to this report that accompanied the Wilson statement in 1952.

Love it or hate it, people take General Motors seriously.

Minorities, on the other hand, traditionally have been seen as threats, as hinderances, as nuisances, as charity cases -- as anything, in short, but a group possessing, in the commission's words, "immense talent, creativity and entrepreneurial energy."

Thus, we have every reason to expect that the opinions of the U.S. Commission on Minority Business Development will be met with the kind of strained silence -- the averted heads, the polite coughs -- that accompany the public babblings of madmen. But there is a great truth in this apparent babble.

The Greater Baltimore Committee reported recently that the economic health of Baltimore is irrevocably tied to the economic health of the entire region.

It is also true that the economic health of the city's minority community -- in our case, blacks who make up better than 60 percent of the population -- is crucial to the health of Baltimore.

Studies have shown that black-owned businesses, for instance, are most likely to hire, train and promote black employees. Black businesses also are most likely to trade with other black-owned businesses so that success feeds on success.

The encouraging news is that the number of black-owned businesses here continues to grow. Maryland, at last report, had the highest proportion of black-owned firms in the country.

Moreover, new black entrepreneurs were more likely to be college educated and less likely to open high-risk, low-yield, Mom and Pop ventures than ever before.

The bad news is that blacks still enter business woefully, and often fatally, under-capitalized, compared with their white counterparts.

After two years of fact-finding, the president's commission on Minority Business Development concluded that part of blacks' lack of access to sufficient capital is due to the overall disparity in wealth between the black and white communities.

But part also is due to prejudice on the part of lending institutions.

Whatever the cause, the commission believes there should be a national push to strengthen the chances of minority business success by eliminating red tape and refocusing programs.

Many of their recommendations will be a tough sell.

But the toughest sell of all -- yet the most crucial -- will be the notion that what is good for minority business is good for the country.

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