Black Businesses Target Technology
LOS ANGELES - On the day his son was born, Ron Anderson witnessed a second birth as
well: an entrepreneurial spirit that drove him from a secure corporate job into the growing ranks of black business owners who
see a future in the world of high technology.
Nine years later, Anderson, 38, is president of the Demand & Supply Fulfillment Center, a 150-member marketing cooperative
whose members include small computer manufacturing, Internet services and DVD production companies, as well as more
traditional businesses.
``The idea was formed by the birth of a child,'' Anderson said Thursday as he manned his company's booth at the California
African-American Business Summit '99. ``My son was born and I started thinking about ways I could put some people to
work.''
Although color barriers continue to frustrate minority entrepreneurs, Anderson and others attending the conference are
convinced times have never been better for blacks to get into business. In doing so, blacks are targeting higher-profit industries
such as information technology, observers say.
``Like other people, we're looking at technology, telecommunications. We're looking at areas that are growing,'' said Patricia
A. Means, publisher of Turning Point magazine, sponsor of the three-day summit which ends Friday.
As they do so, blacks also are finding it necessary to become more sophisticated about marketing, venture capital and
partnering. The 400 or so people who attended the conference sat through sessions telling them how to spot emerging markets
in the United States and abroad and how to influence the political process.
The number of black-owned firms in the United States grew 46 percent to 620,912 between 1987 and 1992, nearly double
the rate for all businesses, according to the most recent Census Bureau figures. Revenues for black-owned enterprises
expanded 63 percent during the period, from $19.8 billion to $32.2 billion. That compares to a 67 percent increase, to $3.3
trillion, for all businesses.
Small, marginally profitable service businesses, such as retail stores, beauty shops and employment agencies, accounted for 53
percent of black-owned firms. But Means and others believe that number is dropping, in part because banks and big
corporations have realized they can profit by doing business in black communities. That has opened doors for black
entrepreneurs to make money as suppliers, consultants and partners to larger white-owned businesses.
For example, investors in Nu Capital Access Group, a venture capital company that focuses on minority businesses in the San
Francisco area, includes Bank of America, Wells Fargo and Washington Mutual Inc., said Nu Capital chairman Len Canty.
Bank of America was the first to sign on.
``To start they were not too keen on the idea. Fortunately we had a brother there who drove the whole process,'' he said.
Once Nu Capital became successful, the Bank of America invested more money and the other banks got involved, he said.
``At the end of the day, the business has to make sense,'' he said.
A lack of access to capital is one of the biggest barriers to minority business owners. On average, black businesses start out
with less capital and are less likely to get bank loans than white entrepreneurs, according to a 1993 study by Timothy Bates, a
professor of labor and urban affairs at Wayne State University in Detroit. The mean level of capital available to new black
business owners was $12,224. That's 43 percent less than the $17,488 available to whites, Bates found.
Racial prejudice also remains an obstacle for black entrepreneurs, but has become less of a problem in recent years, said Fred
Calloway, president and chairman of BC2 Environmental Corp., a Fullerton-based drilling company that tests soil for
contamination. He said 99 percent of his business is with white-owned companies.
``It's a very good time for African-Americans to go into business. I think we have a greater awareness of business and the
larger society is more accepting of us,'' he said. ``I think the larger society is more accepting of us. We're showing them we are
competent. Once they saw our capabilities, being black or white didn't make any difference.''
May 7, 1999
Source: Newswire
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