Economic Crisis Impact On Minority Businesses
Dr. Carlton Lamar Robinson
First Coast African American Chamber of Commerce
Title: Crisis approach by local municipalities to hurt innovation of tomorrow
The current economic crisis has many dimensions (social and political). Obviously the immediate impact of rising costs and shrinking budgets have changed the landscape of how we live. Our quality of life has also been impacted by the current crisis. Our local communities have always thrived on innovation; that innovation is now threatened by the crisis approach of many municipalities. Clearly, in regards to economic cycles, we are in either "contraction or trough". That process is not necessarily new to America, it a cycle that has borne out may times over. The issue is a lack of contingent economic development planning and its restrictive nature on small businesses.
I have traveled across the cross to speak with many chambers of commerce (regional and minority) in an effort to provide effective business commentary. They have communicated that the economic crisis has threatened their vitality and many of their political leaders are non-responsive. Often the leaders are communicating to them that government should not be involved in some of the areas that it is currently funding. Many have been said to be using the economic crisis as a means to effectively shrink government's future role. This brings to the forefront a new issue of social and cultural accountability in business.
A fact that can not be ignored is that government has a role in shaping and guiding the framework of business activity. Without a framework, business can not exist. For example, local municipalities have offices of economic development who plan for the future of a community and the economic impacts of new business ventures, construction projects, population growth, and housing. They seek legislation and funding that is favorable to producing that economic development and attracting new businesses to the area. What happens if they are wrong? Or fall short? It creates a business environment that is forced to be lean.
The two major influences on the business environment are that of economic variables and experience; keep in mind that economic variables are shaped by government action/inaction. Each influence shapes the type of businesses that are formed and how they connect to supply chains. Keep in mind that many are never taught about the supply chain because too busy managing every aspect of their business. How businesses interpret and interact with the activity around dictates their vitality, efficiency, and/or leanness.
Unfortunately, small businesses are already lean and in times of economic crisis they depend heavily on community resources to develop and grow their businesses. This is especially true in urban and rural areas. And yet, cities across America are not only cutting budgets but also community services. Those services are vital to those who are starting and/or growing businesses and do not have the financial resources to return to college or pay a consultant. Erroneously, some will say that local SCORE counselors can fill the gap. One entity is not capable of supporting the volume of new and maturing businesses in operation today, it takes a community with an effective entrepreneurial framework to support innovation, growth, and small business activity.
In conclusion, offices of economic development are scrambling across America because many of their projections have been negatively impacted by the economic crisis. The approach to the crisis has been to cut nearly everything. With this approach we are reducing the entrepreneurial frameworks throughout the country. And while we may recover financially, we are losing the battle of innovation which leads to effective entrepreneurship and increased economic activity. Lets hope that leaders are considering how their decisions will impact communities beyond the finances of today and into the innovation of tomorrow.