A decade from now historians will discuss the economic impact of a two-day event that took place on Nov. 15 & 16, 2011 at Rutgers University, which brought together more than 120 minority business leaders, investors and entrepreneurs for the first-ever “Gathering of Angels” summit. The catalytic gathering is destined to be viewed as a turning point in Black American history from a focus on 20th century civil rights battles to 21st century economic engagement.
There were no cries for a government-led solution. No one blamed President Barack Obama for anything. Not a soul called for an act of Congress. This was the stage upon which visionary economic leadership would emerge for Black and urban America. And the stakes were extremely high.
Consider the current economic state of Black America:
All of America’s 1.9 million Black-owned businesses produced revenues totaling less than 1 percent of GDP.
1.8 million of Black-owned businesses are sole proprietors with zero employees.
Black-owned tech startups received just 1 percent of tech investments last year.
Black investors comprise less than 1 percent of the angel risk capital investment space.
In America’s 21st century knowledge-based, tech-driven global innovation economy, these stats are devastating. Consider also the fact that such stats were compiled from 2007 government data before the economic collapse. Consider also the Kauffman Foundation proclaims that all net new job growth since 1980 is the result of companies five years old and younger. These fast-growing startups are fueled by risk capital investments.
Question: If Black Americans are neither an appreciable amount of the high growth and high-tech entrepreneurs funded by risk capital nor an appreciable amount of the risk capital investors betting on high-growth companies, how is job growth generated and wealth created in Black America?
Answer: There is no job growth in Black America. And the median wealth in White America has grown to 20 times the wealth in Black America.
The problem, however, isn’t isolated to Black America. It is a serious national problem when the nation’s “private sector” and federal and state governments have all failed over six decades to invest sufficient resources into ensuring equitable economic opportunities — from the education pipeline to entrepreneurial productivity — for all sectors of society.
America’s Unsustainable Economic Disconnect
The result is significant portions of America are today disconnected from the job growth and wealth creation processes that account for all net new job growth in the nation.
Unfortunately, vast regions of urban America have not benefited from the job growth and wealth creation process.
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