Each February for more than 40 years, our country has proudly come together to celebrate the rich heritage and significant contributions of African Americans during Black History Month.
Many household brands and iconic American businesses were founded by trailblazing Black innovators. In 1821, Thomas Jennings became the first African American patent holder in the United States, and we have him to thank for modern-day dry cleaning technology. The first self-made female millionaire, Madam C.J. Walker, created a hair-care line in 1906. Johnson Products became the first Black-owned business on the American Stock Exchange in 1971. In 1999, Franklin D. Raines became the first Black CEO of a Fortune 500 company, Fannie Mae. And Oprah Winfrey, who broke the glass ceiling after facing much adversity to pave the way for Black television personalities, became the first African American female U.S. billionaire in 2003.
Our history is long and is still being made. We have much to be proud of as a community, but there are still challenges that must be overcome for Black-owned businesses.
For centuries, Black Americans have fought for equality, including the right — and opportunity — to own and operate a business in America.
Despite there being more than 124,000 Black-owned businesses in the United States in 2017, African Americans own just 2.2% of the nation’s 5.7 million businesses with employees, according to data from the U.S. Census Bureau. And these disparities, which have persisted for years, have only been exacerbated by the onset of a global pandemic, which has disproportionately affected minority communities.
In early 2020, what began as a year of steady economic growth quickly turned into the direst economic crisis our nation had experienced since the 1930s. No industry was immune to the effects of the COVID-19 pandemic. Black-owned businesses were disproportionately impacted by COVID-19 — causing an existing gap in business ownership to grow.
The National Bureau of Economic Research released data early on in the pandemic that showed that active Black business ownership decreased by more than 40% from February to April 2020 — nearly double the rate of decline the nation had seen overall. Another study conducted in May 2020 found that more than half of African American business owners were “very or extremely concerned about the viability of their businesses.”
Navigating the pandemic has been incredibly challenging, but technology has served as an invaluable asset for our nation’s business owners. Technology has allowed business owners to operate virtually, protecting their employees, while continuing to run their day-to-day operations online. It has also opened up new business opportunities, while foot traffic has declined and some shop doors have been required to temporarily close. The internet has provided a platform for businesses with smaller budgets to communicate and engage with customers and market their products amid social distancing requirements. A study by the U.S. Chamber of Commerce found that roughly three-in-four small businesses utilize digital platforms for sales.
While our Black-owned businesses have been disproportionally impacted by the pandemic, we have turned to technology to provide a much-needed boost during these difficult economic times. Now is not the time to enact policies that restrict an open and accessible internet, which allows businesses to grow and succeed – or even to survive.
As the COVID-19 pandemic continues on, we are hopeful that our nation’s leaders will look to policy solutions that drive technological innovation. We’re looking at a long road to recovery, and technological innovation will remain critical to the health and success of the economy, supporting Black-owned businesses across the nation.
Harry C. Alford is President and CEO of the National Black Chamber of Commerce.
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