Washington Metro Area Leads the Way for Black-Owned Business

WI Staff | 11/16/2011, 2:33 p.m.

The Washington-Arlington-Alexandria, DC-VA-MD-WV, metropolitan statistical area (MSA) is the best environment for black-owned businesses to grow in the United States, according to a recently released National Urban League report. But even with this bit of good news, the report also revealed the Washington metro area ranked last in terms of the percentage of black-owned businesses relative to the population.

According to the Urban League's "State of Urban Business 2011: U.S. Cities that Lead the Way," the Washington region led the metro areas of Los Angeles, Chicago, Detroit, Atlanta, Charlotte, Dallas, St. Louis, Cleveland, New York, and Philadelphia. The Washington-Arlington-Alexandria, DC-VA-MD-WV, MSA beat other parts of the country because, the report confirmed, it has the strongest diversity supplier policies which allow easy access to business-to-business and government contracts.

"Businesses owned by minorities have grown faster than white-owned businesses since 2007," National Urban League President Marc H. Morial said. "One major factor in that growth has been the success of minority business set-aside programs. It's been one of the few job-creation bright spots during this difficult recession and jobless recovery."

Noting the top metro areas for black-owned businesses included cities where the National Urban League operates its Entrepreneurship Centers, Morial said the New Market Tax Credit Program and Strategic Alliance between Stonehenge Community Development and the National Urban League have "led to the creation of more than 8,000 jobs through the deployment of $352.5 million in allocations."

The report indicated the nation's top 11 metro areas for black-owned businesses are:

1) Washington-Arlington-Alexandria, DC-VA-MD-WV

2) Los Angeles-Long Beach-Santa Ana, CA

3) (tie) Chicago-Joliet-Naperville, IL-IN-WI & Detroit-Warren-Livonia, MI

4) (tie) Atlanta-Sandy Springs-Marietta, GA & Charlotte-Gastonia-Rock Hill, NC-SC

5) St. Louis, MO-IL

6) Dallas-Fort Worth-Arlington, TX

7) Cleveland-Elyria-Mentor, OH

8) New York-Northern New Jersey-Long Island, NY-NJ-PA

9) Philadelphia-Camden-Wilmington, PA-NJ-DE-MD

The Washington MSA's good news was dimmed a bit with the finding that despite being the part of the country with the highest propensity of African-American entrepreneurship, the Washington metro area ranked last in terms of the percentage of black-owned businesses relative to the black population--18.7 percent businesses compared to 55.2 percent of the population.

"Our analysis found that the greatest weakness in African-American entrepreneurship is not in starting businesses, but rather in growing these businesses enough to create sustained and significant revenue," Valerie Rawlston Wilson, National Urban League's vice president of research, said. "Inability to obtain credit remains more of an obstacle for African American business owners than for any other group."

The report presented several recommendations for growing and strengthening black-owned businesses, from increasing the funding available for small business loans and raising the set-aside cap for government small business contracts, to establishing robust procurement goals at all levels of government and encouraging support for private sector supplier diversity programs.

The Director of the National Urban League Policy Institute, Chanelle Hardy, said the planned Urban Empowerment Fund, will fill a "credit gap" minority communities face.

"The Urban Empowerment Fund will invest in new and expanding small businesses, nonprofit organizations, community facilities and affordable housing development in underserved communities of color throughout the country," Hardy said. "Through its lending activity, the Urban Empowerment Fund will help empower African Americans to attain economic self-sufficiency and to create sustainable, vibrant minority communities throughout the country."