The latest ecosystem research is replete with disheartening data on how the pandemic is hurting small businesses. According to a survey of over 8,000 small business owners conducted between March and April 2020, 60% of respondents indicated that they laid off at least one employee, and 31% of respondents thought they had a 50% chance of going bankrupt in the next 6 months. A study from May 2020 found that while an estimated 17% of white-owned businesses closed due to the pandemic, a staggering 41% of Black-owned businesses closed. These long-standing but suddenly erupting, unequal impacts fueled swift ecosystem building efforts in response. We have witnessed this firsthand as a grantee of the Kauffman Foundation for the ESHIP Communities initiative.
Local ecosystem builders, entrepreneurs, and organizations championing them co-create small business support networks in their community. Whether through individual or collective efforts, these networks provide essential support to local business owners amidst the pandemic. The communities we work with, Baltimore, Kansas City, Long Beach, and the North-Central region of New Mexico, demonstrate the dedication and energy required to advance more equitable entrepreneurial ecosystems. It is important that we as partners recognize their hard work.
Our own research can contextualize and support their efforts by capturing a localized understanding of their unique community through tools such as the Entrepreneur Support Organization questionnaire and Survey of Entrepreneurs. In addition to our surveys, we leverage publicly available data to help tell a full story about entrepreneurship in a city. This story underscores the vitality and value of the deep contextual knowledge of those who comprise and support the local ecosystem. Looking at three of our ESHIP Communities, it’s evident how community engagement can drive business survival in ways highlighted by the various data sources we’ve created or examined. Below we connect the data available to us to the stories of some of our partners in three ESHIP Communities.
Our research on ESO collaborations in Long Beach tells us that diverse leadership is linked to partnership success. Our ESO questionnaire from February 2020 found that ESOs whose leadership was predominantly composed of people of color were more likely to report successful collaboration between organizations. While 0% of white-led organizations indicated that collaborations were “very” or “completely” successful, 50% of organizations led by people of color indicated that level of success. The UCC-Midtown Business Improvement District partnership highlights the need for and value of collaborations such as those examined through our local ESO questionnaire.
The Policy Council excels at prioritizing local producers and distributors by passing legislation to grow local food business. Their advocacy work helped pass $150,000 for the Department of Agriculture to create market opportunities for food and agricultural entrepreneurs. Publicly available data can serve as a guidepost for ecosystem building and underscore the much needed policy work conducted by entities such as the Policy Council.
Among aspiring entrepreneurs and existing small business owners in Baltimore, Forward Cities found that 56% of Black respondents experienced discrimination at ESOs compared to just 26% of white respondents. This gap in experience may reduce the amount of information and support that Black entrepreneurs receive; a problem that ESHIP Baltimore council member Jonathan Moore’s work can address.
Understanding these long-standing challenges, leaders on the ESHIP Baltimore council have created information access points where there previously were few. Jonathan Moore of Rowdy Orb.it installed community-based, free internet in Sandtown Winchester and Cherry Hill, two of Baltimore’s most digitally disconnected communities. While internet access cannot override institutionalized racial bias, it can offer communities a different access point to information.
While data can paint a bleak picture, these and many other contributors to local ecosystems provide a more hopeful future. Supporters and innovators, such as those highlighted above, exemplify how to reach all entrepreneurs in an ecosystem. The entrepreneurs in these and other communities have brilliant ideas, and yet institutional and resource barriers often create barriers on their path, as demonstrated by Forward Cities’ research. The stories of the ecosystem supporters above show how deep community knowledge is the cornerstone to these initiatives and leads to their success.