By Todd Cohen
DURHAM, N.C. – In the mid-1980s, fielding requests for information on businesses owned by minorities or women, the Minority Business Development Agency in the N.C. Department of Commerce lacked the data to respond.
To help fill that data gap, three agency employees formed the North Carolina Institute of Minority Economic Development. Housed in the former North Carolina Mutual Life Insurance Company building in Durham in the business district known in the late 1800s and 1900s as “The Black Wall Street of America,” the agency focuses on business development, research and policy, and education and training.
Operating with an annual budget of $2 million and a staff of 12 people, the Institute in the fiscal year ended June 30, 2013, served over 4,000 businesses that created 480 jobs. It provided education and training for 5,100 people.
It helped firms secure $6.4 million in loans from major bankers and nontraditional investors. And it helped firms secure $81 million in contracts.
The biggest challenge for businesses owned by minorities and women is access to affordable capital, and access to market opportunities and an available skilled labor force, says Andrea Harris, president and co-founder of the Institute.
(On October 1, Harris will become a senior fellow at the Institute. Farad Ali, senior business consultant to the Institute who for 14 years was its senior vice president, will become its president and CEO.)
In 2007, the most recent year for which minority business data are available from the U.S. Census, North Carolina was home to nearly 132,000 minority-owned firms, up from over 61,500 in 1997, Harris says. Those firms employed nearly 129,500 paid employees and generated $16.1 billion in gross receipts.
The number of minority-owned firms likely is much higher now, Harris says.
The state also was home to 267,800 businesses owned by women that employed 208,300 individuals and generated $35.9 billion in sales.
When the Institute was formed in 1986, Harris says, firms owned by women “were not at the table or getting contracts.”
The Institute also has been working with an economist at the University of Georgia at Albany, updating data it published five years on the economic impact of the 10 historically black colleges and universities in North Carolina. That 2009 study, which was based on 2007 data, reported that those institutions’ combined economic impact was $1.6 billion.
Businesses owned by minorities and women were the focus of North Carolina’s second annual Statewide Minority Enterprise Development Week celebration on September 11 in Greensboro. Hosted by the Institute and the North Carolina Minority Women’s Business Enterprise Coordinators’ Network, the event is believed to be the only statewide event in the U.S. that celebrates minority-owned and women-owned firms.
The event is modeled on local celebrations throughout the U.S. that were launched by President Ronald Reagan in 1983 to raise awareness of goods and services provided by minority businesses, and to share their best practices, Harris says.
With three of five small businesses in the U.S. typically failing within their first five years, she says, the Institute “will continue to provide assistance, and work with major lenders and other business resources to understand and better respond to the challenges that are peculiar” to businesses owned by minorities and women.