The New Black Power Isn’t What You Think
(Bloomberg Opinion) -- Black power. The world has seen it in raised fists, in widespread protests against racial inequality and police brutality. But this must not be its only manifestation. Our nation must turn it into real economic gains, by unlocking the potential of Black Americans to speed the recovery and contribute to prosperity more broadly.
Since the tragic killing of George Floyd raised awareness of systemic racism in the U.S., private-sector leaders have pledged more than $30 billion to address the problem. Notable examples include PayPal, which has made grants to help Black-owned businesses survive the pandemic, and promised another $500 million for efforts including direct investments in startups. My organization, Operation Hope, has partnered with Shopify on an ambitious program to create 1 million Black-owned businesses by 2030, providing entrepreneurs with the training, mentorship and skills they need to connect to the online marketplace. We’re also working with companies such as Walmart, Santander, Delta Airlines and KKR to provide financial education aimed at building credit and creating owners — programs that can help address the country’s unacceptable racial wealth gap.
These investments are more than just a nod to social justice. They are a smart-money bet on the future. When people who have been held back by discrimination are put in positions where their talents can best be applied, all of society benefits. Researchers, for example, estimate that over the five decades through 2010, improved allocation of the labor of women and Black men accounted for as much as 40% of growth in U.S. economic output per person.
There’s a lot more potential to be tapped. Economists at Citigroup estimate that systemic racism has cost the U.S. economy about $16 trillion over the past 20 years, and that if gaps in areas such as wages, credit and education were closed today, U.S. output could be about $5 trillion greater over the next five years. Separately, a survey of Black entrepreneurs conducted in February by Operation HOPE and SurveyMonkey found that 86% expect revenues to increase over the next 12 months, but that only 7% have the ample access to capital they would need to take full advantage.
How can the U.S. seize this opportunity? One immediate priority must be to increase access to capital — by which I mean not only money, but also the education, networks and role models that constitute human capital.
If you hang around nine broke people, you’re likely to be the tenth. To break out, people need connections. They need companies to make concerted efforts to seek out and develop talent in disadvantaged communities — through internships, through contracting with minority-owned firms, by ensuring that minorities are represented in every high-level applicant pool and board search. They need successful businesspeople to get actively involved in mentoring – as many professionals from finance, technology and other sectors have through our HOPE Time Bank, volunteering to help Black-owned businesses upgrade their operations. With any luck, the mentors will be repaid when those business grow and require more of their services.
If we commit to raise all boats, to remove barriers for any and all to succeed in America, everyone wins. This is the kind of Black power that we should all get behind.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
John Hope Bryant is founder, chairman and chief executive officer of the nonprofit Operation Hope, chief executive officer of Bryant Group Ventures and the Promise Homes Company, and co-founder of Global Dignity.
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