Black-owned businesses innovate to survive

While they have been disproportionately impacted by the pandemic, technology has provided a boost.

Each February our country proudly comes together to celebrate the rich heritage and significant contributions of African Americans during Black History Month. It is a time to reflect on the accomplishments of great leaders and innovators — the teachers, lawmakers, scientists and entrepreneurs who overcame significant barriers and helped to shape modern society for the better.

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 U.S., and we have him to thank for modern-day dry cleaning. 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 paved the way for Black television personalities, became the first African American female U.S. billionaire in 2003.

We have much to be proud of as a community, but there are challenges that must be overcome for Black-owned businesses.

In 2020, our nation underwent a long-overdue reckoning over issues of race and social justice. The country — for the most part — came together to recognize the racial disparities that continue to exist. For centuries, Black Americans have fought for equality, including the right — and opportunity — to own and operate a business.

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 the U.S. Census Bureau. These disparities have only been exacerbated by the onset of a pandemic that has disproportionately affected minority communities. COVID-19 caused an existing gap in business ownership to grow.

The National Bureau of Economic Research found active Black business ownership decreased by more than 40% from February to April 2020 — nearly double the nation’s overall rate of decline.

Since the onset of the pandemic, businesses have continued to struggle. A University of Michigan study found that less than 1% of Black business owners stated they received government assistance from March through May 2020. And a recent survey found that 83% of minority-owned businesses claim that they are in need of additional financial assistance from the government.

Navigating the pandemic has been incredibly challenging, but technology has served as an invaluable asset for business owners. It has allowed them to operate virtually, protecting their employees while continuing to run day-to-day operations. It has 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.

Amid the pandemic, a survey conducted on behalf of the American Edge Project found 82% of Americans felt that U.S. technology companies make it easier to grow a small business and nearly 80% felt that technology companies make it easier to start a small business.

While our Black-owned businesses have been disproportionately impacted by the pandemic, we have turned to technology to provide a muchneeded 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, 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 Alford