Author investigates problems facing black business

July 13, 1993|By Mark Guidera | Mark Guidera,Staff Writer

Bob Wallace recalls with clarity the anger and bewilderment he felt several years ago on a visit to his boyhood haunt, South Baltimore's gritty Cherry Hill neighborhood.

The mechanical engineer had stopped by the neighborhood to catch up with old chums.

Instead of camaraderie, he found himself haranguing a group of old friends because virtually every corner store was owned by Asian Americans.

"I was standing on a street corner yelling at my buddies. I was so angry. None of them owned their own business. Their response was they were locked out of the system. There was this intense sense of powerlessness among them. I was furious," recalled Mr. Wallace, a graduate of the Minority Business Executive Program at Dartmouth College's Amos Tuck School of Business.

As a result of that encounter --which even today causes his voice to rise as he recalls it -- the Columbia resident embarked on a search for answers to a question that deeply troubled him: Why is it that so many black Americans don't fully participate in the nation's economic opportunities?

The fruit of that search was "Black Business Through Black Entrepreneurship," a 289-page book published by Duncan & Duncan Inc. of Edgewood, which is just hitting bookstores.

The work is part exploration of why blacks have failed to capitalize on economic opportunities and part guide to what minorities, particularly blacks, must do to capture a larger share of the nation's economy.

Sprinkled throughout the book are case studies of 10 highly successful black-owned businesses and their founders, such as Jim McLean, founder of Seven Seas and Seven Winds Travel Agency in Baltimore.

In his search for the right mix for a successful minority business, Mr. Wallace, 37, traveled around the country interviewing black owners and founders of businesses, draining his family savings in the process.

"I didn't start out with the intention of writing a book," said Mr. Wallace, who is co-owner of ECS Technologies in Baltimore, a computer engineering firm.

"My intent was to find an answer to why some African Americans survive so well in the business mainstream while others are powerless," he said.

His conclusion: The black community as a whole has failed to build what Mr. Wallace calls in his book "the Triad of Power" -- ethnic "rooting," or pride, political power and economic power.

Mr. Wallace said that during his search he found a stark gap in economic power between blacks and whites.

Among the telling statistics: The average black's net worth (assets minuses liabilities) is about a quarter of the average white's -- $24,000 compared with $103,000.

More troubling to Mr. Wallace was this statistic: Blacks make up 12 percent of the nation's population, but only 3 percent of U.S. businesses are owned by blacks.

Mr. Wallace became convinced as he continued his interviews and research that the gap could not be blamed solely on racism.

He also became convinced that the other oft-mentioned culprit -- the decline of the family among blacks -- was a myth and so could not be held accountable for the missing triad leg.

He argues that while blacks made great gains in political clout and ethnic pride during the civil rights movement of the 1960s, they missed the explosion of economic growth in the United States during the 1980s. That missed opportunity, Mr. Wallace believes, is a cause for so much of the hopelessness found among black youths today.

"The triad is incomplete because it has a shaky leg," Mr. Wallace said. "Because African-Americans don't have the triad completely constructed," they are not in a place of empowerment.

To bolster their economic power, Mr. Wallace argues, blacks face four challenges.

"We need a movement similar in magnitude to the 1960s civil rights effort, but on the economic front," he said. "The problems black communities face -- drugs, violence -- are directly tied to the communities' inability to control their economic destiny."

Three of the challenges Mr. Wallace argues blacks must take up are recapturing local businesses that serve black communities, increasing joint ventures with mainstream businesses and matching well-known professional black athletes' financial and media muscle with that of young entrepreneurs.

The fourth challenge, which the author dubs "sports transmutation," involves altering the perception among young blacks that their most likely avenue for achieving economic success is professional athletics.

"We need to show our young people there are options other than football and basketball," Mr. Wallace said. "A big problem in the black community is the fact that our youth are too channeled into sports.

"Blacks are way overrepresented in the NBA. My theory why is that they spend a lot of time honing basketball skills instead of business skills. But the same skills that can make you a success in sports -- team effort, determination, cunning -- are also what it takes to be a success in business."

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