Black Entrepreneurship

Introduction

It has been evident that black entrepreneurship as a business entity plays a great role in the development of the African-American culture. Historically, the black African-American entrepreneurship was characterized by some lower entrepreneurial activities that were mainly based on racial practices and the lack of adequate business capitalism. According to Patterson (1), Africa Americans for a few decades in the past have performed poorly in business. This was majorly because they lacked the business culture that could enhance their entrepreneurial skills. For instance, most of the black African American business activities were marginalized and, therefore, limited their concentration to offering the services to industries or engaging in craft trading.

According to Bogan and Darity (1), black entrepreneurship plays an important role in the economy of the United States especially in developing different African American culture. They noted that the underdevelopment of the African American culture in the past was mainly based on the huge gap, especially in the self employment sectors, between the white and  black Americans. Bogan and Darity (1) have identified the existence of a large racial demographic gap between the whites and the blacks as one of the factors that has resulted into the lower rate of black entrepreneurship. Bogan and Darity (1) noted that for the past years, the self-employment rate among the black Americans was so low that it counted for approximately one third compared to the self-employment among the white Americans.

The work analyses the black entrepreneurship and its role in the development of the African American culture.

The Evolution and the Development of Black Entrepreneurship

According to Bogan and Darity (3), black entrepreneurship resulted from slaver trading activities. They noted that when these slaves were freed, they started engaging into the personal business services especially those that were underestimated by the white Americans. They pointed out that since the black entrepreneurs were lacking enough business capital and entrepreneurial skills, they ventured into either industrial business services or craft trading activities that did not require the advanced business knowledge and huge capital to start business, including: mechanics, barbers and artisan.

Bogan and Darity (3) have also identified demography as an essential factor in the development of the black entrepreneurship. According to them, the self-employment among the blacks has received a great boost from the wide distribution of the black Americans in the United States. This helped to remove the initial barrier of the dominance by the white entrepreneurs over the black ones. Black entrepreneurs, for example, had their business being boycotted by a larger population of the whites that preferred to promote the people of their own race. This, in turn, negatively affected the black entrepreneurs’ business returns (Bogan and Darity 3).

However, there were other factors that worked in favor of the black entrepreneurs. One of them was the evident great migration of the black Americans to Northeastern America from Southern America in the early 1900s. Bogan and Darity (3) argued that even though this massive migration impacted negatively on the black entrepreneurship in southern America, the equal population distribution of the black Americans in the United States created a suitable business environment for the black entrepreneurship. However, this increase of the black population among the whites never has come without challenges as it generated the racial hostility that eventually affected the cordial business relationship between the two groups. This resulted into the loss of business operations by the black entrepreneurs as most of their businesses were totally isolated.

In addition, Bogan and Darity (5) pointed out that racial hostility made it difficult for the black entrepreneurs to develop their business due to the lack of adequate policies that could allow them to advocate for their business rights. They pointed out that most of the black entrepreneurs were forced to restrict themselves to the black communities and were, thus, not able to generate the enough income to improve their businesses. Furthermore, Bogan and Darity (5) pointed out that then the government policies did not address the rights of black entrepreneurs, especially in banking services. For instance, most of the blacks were denied in capital loans from banks that were either widely dominated or owned by the white Americans.

However, there has been a great improvement in the state of black entrepreneurship. This has resulted from the fact that contrary to the previous decades most of legislations and policies have been established to enhance the development of black entrepreneurship. The implementation of such legislations and policies has enabled the black entrepreneurs to exploit various business opportunities that have, in turn, resulted into a great increase of their annual aggregated sales.

Bogan and Darity (8) gave an example of the evident increase by 90% of the black entrepreneurship between 1970s and 1980s which was widely contributed by the U.S. government’s efforts to implement policies that equitably advocated for the black entrepreneurs’ business rights.

Role of Black Entrepreneurship in the Development of the African American Culture

Economic culture is generally the beliefs and principle values that are associated with entrepreneurship. Such principles and values impact differently on the peoples’ economic decision making and subsequent behavioral attitudes. Equally, it is evident that black entrepreneurship has generated various beliefs and values that have enabled the development of the African American cultures. According to House (1), black entrepreneurship has played a significant role in the economic culture of African Americans. He points out that unlike the previous years, black entrepreneurship has tremendously grown. According to him, this has seen more business cooperates being owned by the black Americans, something that has, in turn, changed the economic culture of the African Americans.

On the other hand, House (1) notes that black entrepreneurship has helped in the creation of the social capital which has greatly contributed to the development of the African American economic culture. He points out that whereas the human capital addresses the quality of an individual in the society, the social capital helps people to establish healthy relationships among themselves. House (1) argues that the social capital depicts an individual’s performance as being based on the existing social structures in the market level or hierarchy.

For instance, most of black entrepreneurs were influenced by their family members to start their own businesses. House (1) gives an example of a study in which almost 21% of black entrepreneurs being consulted admitted that they have formed their business organizations based on the fact that they had been encouraged by their relatives being excelling as entrepreneurs. This has continued to create a perception, especially in the African American culture that one can effectively excel in business provided it has been successfully tried by their relative entrepreneurs.

Bogan and Darity (3) pointed out that in the past decades black entrepreneurship was not actively practiced by many black Americans since they lacked close relatives’ role model in business. However, they noted that those who were able to venture into entrepreneurship became the business role model for their family members. For instance, family members have found it easier to operate and manage their enterprises especially in the case where they were continuously mentored by their close relatives who, at one point, were entrepreneurs.

Black entrepreneurship has also enabled the development of the entrepreneurial tradition among the African American culture. According to Bogan and Darity (2), African Americans were perceived to lack the social capital that was widely contributed by the entrepreneurial traditions. They pointed out that black entrepreneurs had been taken to be self-centered people who did not support the development of business in other communities. This had had an adverse effect on the black people’s business undertakings. House (2) also argues that most of the black enterprises indicated the low business returns since their owners lacked a strong business tradition. For example, most of the black entrepreneurs did not exploit the credit rotation societies which were widely practiced by most of the whites (House 2).

According to Bogan and Darity (3), the lack of business traditions in black entrepreneurship has been partially contributed to by the slavery activities that barred most of black entrepreneurs from gaining essential entrepreneurial skills. Additionally, they pointed out that most of the black Americans’ cultural values have also made them not to envy or engage into the entrepreneurial practices. This has made difficult for the African Americans to develop the adequate entrepreneurial skills that could make their businesses excel at the market level.

On the other hand, black entrepreneurship has significantly helped the African Americans to adopt the cultures that prevent them from engaging in racial activities. Bogan and Darity (2) pointed out that most of the black entrepreneurs isolated themselves because they had been discriminated in terms of their color, religion, sex and origin. They were, thus, influenced into hating their white counterparts because they had been denied from such privileges like the rights to business licensing, especially the permits which could enable them to operate in major business boosting streets. Bogan and Darity (3) gave an example of what happened in the 1930s when most of the blacks were discriminated based on their religion especially in Southern Chicago. They noted that this enabled the Jewish entrepreneurs to dominate in most of the major streets at the expense of the black entrepreneurs.

Additionally, black entrepreneurship has developed a certain economic cultural practice among the African Americans that has helped them to counter their racial perspectives. Bogan and Darity (3) pointed out that the racial discrimination is no longer seen by most of the African American societies as a major barrier. Blacks have been able to know that all they need to prevail in entrepreneurship is the basic business resources. Bogan and Darity (3) pointed out the realization by most of the African Americans that they had been not the only immigrants being discriminated in the U.S. enabled them to arise. Many Africans have since come to believe that even Mexicans have excelled in entrepreneurship because they have been able to exploit various resources that enabled them to increase their productivity.

Moreover, black entrepreneurship has helped the African Americans to counter the cultural belief that only men can effectively own and manage businesses. According to Bogan and Darity (18), these were the black African men who were actively involved in entrepreneurship. This was because the black women were perceived to have the lack of entrepreneurial skills. For instance, the 1990s’ population census showed that the African American women formed only a percentage of 2.0% of business entrepreneurship. This was so low compared to the 4.4% of their male counterparts. On the contrary was the case of the Korean-American women, who almost formed the same percentage of 18.9%, compared to their male counterparts.

Conclusion

In conclusion, it is clear that various factors have played significant roles in the development of the African American culture. Moreover, the analysis has also illustrated that if given a chance and the proper culture, the non-American communities can excel in business. However, America, just like any other nation, needs to come up with more policies to create a leveled field for all those who would want to participate in entrepreneurship irrespectively of their race, color or gender.