Entrepreneurship continues to play a critical role in Detroit’s economic revival and transformation. With recent emphasis and dollars flowing into the city focused on developing the small business ecosystem, it’s clear small business and the entrepreneurial spirit will have an integral part in Detroit’s future. In particular, minority-owned businesses are a critical driver in job creation and economic development and will continue to help shape the small business landscape–as it’s done for years.
According to U.S. Census Bureau Survey of Business Owners, the number of African American-owned firms in Detroit totals more than 32,000 and, as a result and according to CNN Money, Detroit is ranked 4th in the country, behind New York, Los Angeles, and Chicago.
I recently discussed the state of entrepreneurship and trends among minority-owned businesses with Bridges Communications Group, Inc. Founder Jackie Berg. She shared with me her perspective of emerging small and minority business development trends in Detroit.
Berg, a seasoned small business expert, earned the respect of community leaders during her 25-year history in senior leadership roles at the Michigan Chronicle Newspaper, the Michigan Minority Business Development Council (MMBDC) and other business publications. Having launched several business start-ups and headed her own business ventures, in addition to leading corporate supplier development initiatives at several major corporations, she has the pulse of today’s marketplace and its drivers
As an established business owner and a veteran of Detroit’s publishing landscape, in your opinion, does today’s entrepreneur look or think differently than his predecessor? If so, how?
Berg: Today’s market entrants can be paired in two distinct groups.
There is a younger, tech-savvy group of entrepreneurs emerging that are not adverse to market risks, unapologetically optimistic about urban challenges and more likely to look for opportunities to collaborate with rather than “kill” their competitors. These attributes put them in a unique position to leap frog ahead of other fledging ventures.
Equally formidable, is a more seasoned group of entrepreneurs, who are tactically moving from the corporate world to small business ownership ─ and immediately able to translate their rich corporate experience and relationships into business opportunities. The many who are leveraging new business opportunities to support or supplement lost or diminished retirement plans ─ their proverbial “last supper” ─ are becoming formidable market leaders. They know the marketplace well, having participated in its design-build team.
Which group is the one most worth watching?
Berg: Both. I think the most interesting trend that will emerge is to see increasing collaboration between these two very distinct group of entrepreneurs.
What kind of shifts are occurring among minority-owned businesses?
Berg: I’ve seen a seismic shift among minority entrepreneurs. Today’s most successful Minority Business Enterprises (MBE) are more likely to leverage their ability to drive critical market share growth and employment. Business oweners are becoming more fluid, better able to navigate through emerging opportunities and leverage their core skill set to transcend business sectors moving from low to high growth opportunities.
On an alternate note, the automakers’ drive to make its supply base leaner and more efficient, has created larger and more formidable minority suppliers among those suppliers remaining.
On the other hand, how has minority procurement shifted since you’ve been following trends?
Berg: The majority of Michigan’s corporations have truly embraced diversity as a strategic business advantage. And that focus is driving dividends.
Healthcare organizations with deep diversity within their employee and supplier ranks definitely had a competitive advantage over their competitors associated with market opportunities recently created by the Affordable Care Act (ACA). I’ve also witnessed a transformation in supplier relationships, particularly at Blue Cross Blue Shield of Michigan (BCBSM), which considers its suppliers an extension of their organization and integral part of its business success.
Many corporate Board of Directors (BOD) now include oversight of diversity goals and the majority of corporations expect (and reward) performance at all levels of the organization.
Why is small business growth so critical in Detroit?
Berg: Small businesses, particularly in the service sector, are often the first to offer employment to the chronically unemployed and offer a gateway to advancement opportunities.With more than one third of Detroit’s residents unemployed a year or longer, Detroit’s recovery is dependent of the success of these employers.
Small business openings signal hope to city residents and also add unique character and cultural experience to the communities they serve. New business entrants are being richly rewarded by customers who remain fiercely loyal to local business owners.
We need to help foster more “fringe” business development to connect nearly recovered areas to less fortunate neighbors. More imaginative economic development efforts may be needed to nudge growth in this area.