This chapter analyzes government and HBCU action on improving rates of black entrepreneurship in the United States. Small Business Development Centers help citizens and residents become better entrepreneurs and successful business owners, and are located throughout the United States with some being located on HBCU campuses. This study responds to a 25-year declining trend noticed by Fairlie and Desai (2021) in the numbers of Americans, including black Americans, who are becoming entrepreneurs out of necessity as opposed to in response to discovering an entrepreneurial opportunity. Using regression analysis, the study analyzes data sample size of more than 45,000 entrepreneurs across 50 states and in Washington, DC in the Kauffman Early-Stage Entrepreneurship (KESE) dataset. Findings indicate that SBDCs located at HBCUs correspond to drastic increases in black opportunity entrepreneurship as opposed to necessity entrepreneurship in comparison to white and non-white minorities. Implications and suggestions are provided to HBCUs, PBIs, and government policymakers.
TopIntroduction
The U.S. has yet to benefit from the full potential of creativity, innovation, and entrepreneurship from its Black population. Since the birth of the nation, systemic forces have consistently suppressed such gains from becoming mainstay. Arguments have been repeatedly made by activists, philosophers, scholars, politicians, educators, and other prominent voices about needed strategies that business, government, and society ought to embark on in order for positive, meaningful, and enduring change to occur. One most promising of those arguments is a call to facilitate drastic increases in the numbers of Black Americans who start and run their own businesses (Harper-Anderson, 2017; Ogbolu et al., 2013; Singh, 2022; Singh et al., 2008). This argument also comprises the teaching and facilitation of more Black Americans to become intrapreneurial within organizations in which they work as wage workers.
A major opportunity exists within the U.S. concerning increasing Black entrepreneurship rates. Members of the Black population are extremely entrepreneurial (GEM 2021/2022; Herring, 2004; Köllinger & Minniti, 2006; Reynolds et al., 2004; Shelton & Lugo, 2021; Singh & McDonald, 2004; Walstad & Kourilsky, 1998; Wilson et al., 2004). Black women are even the fastest growing segment in the U.S. among groups embarking on starting their own firms (Reynolds et al., 2004; Shelton & Lugo, 2021; Forbes, 2023; 2016). However, economic data suggests that Black entrepreneurs appear to remain as nascent entrepreneurs almost indefinitely, reject their business ideas to pursue other forms of income attainment, or operate their businesses solely within the informal economy (Walstad & Kourilsky, 1998; Köllinger & Minniti, 2006; Reynolds et al., 2004; Forbes, 2016; Crump et al., 2018; Crump et al., 2009; Rueben & Queen, 2015). Accordingly, the portion of the Black U.S. population who formally establish businesses has drastically trailed, and continues to trail, all other groups. U.S. Census data shows that for more than the past 120 years only 4 percent of the Black population became established business owners. This compares to 12 percent for the white population, and even higher percentages for other groups (Fairlie, 2004; 1999; Köllinger & Minniti, 2006).