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Black Entrepreneurship in America.

Government social programs, equal employment opportunity laws, and political protests have not broken the cycle of poverty, joblessness and income disparity plaguing black Americans. In light of this failure, it is reasonable to ask if black entrepreneurship provides a more viable solution. The authors of this book think so and their major objective is to examine the role of the entrepreneur as an engine for economic development in the black community. The uniqueness of the book is that the entrepreneur is seen not just as an agent for capital accumulation, but also as the prime mover for social reconstruction.

Studies of black business development are typically classified into one of four categories according to the emphasis in their approach. These are economic, business management, psychological, and sociological. The authors have chosen the sociological approach to explain the prerequisites for greater black entrepreneurship. In doing so they develop an extremely interesting paradigm to conceptualize black business development. In particular, they place the latter within the context of a more general notion of economic development where the Schumpeterian thesis on the creative role of the entrepreneur plays a primary part. Yet they go beyond Schumpeter's definition by arguing that black entrepreneurship also involves transforming families, churches, social, economic, educational, and political institutions. In this way, their black entrepreneur really becomes the builder of the entire community.

The sociological discussion measures contemporary black entrepreneurship against this broader paradigm. Anecdotal evidence is provided on individuals and organizations that have been particularly successful and historical and descriptive discussions seek to explain the circumstances that continue to constrain the growth of black entrepreneurs. It is my feeling that this new paradigm alone makes the book worthy of serious consideration. In one sense, it is an attempt to fuse past sociological approaches to the study of black businesses, as best reflected in the writings of E. Franklin Frasier and Abram Harris, with more contemporary theories of economic development. But this unique paradigm, which is the book's best attribute, is in my mind also its weakest spot.

At several places, the discussion of black entrepreneurship loses its focus because the authors tend to get bogged down in outlining too many details of the sociological and economic problems of the black community. A clear connection between these problems and the role and responsibility of black entrepreneurs is not always made. So the book gives one the impression of being two books; one discussing the sociological problems of the black community and discussing the prerequisites of black business development.

The public policies implied by the sociological discussion are uncertain. Specifically, it is not clear whether the authors favor free market forces and minimal government intervention to alleviate social problems, or whether they support a more activist role for government. Both impressions are given in the book, and the uncertainty arises because the authors cite the research of individuals whose opinions vary on the issue but do not state clearly their own position.

The second chapter provides an interesting history of the development of black businesses and a good examination of their contemporary characteristics. The fact that changes are taking place in the nature of black businesses and in the human capital characteristics of owners is noted. The positive effects of increased access to finance and federal minority preference programs are also discussed.

The third chapter focuses on black families and family firms. However, the discussion of the sociological characteristics of black families, the organizational structure of small businesses, and the creation of entrepreneurial values are again not tied together well. There tend to be two discrete stories; one sociological in nature and the other related to business development. The same is true of the chapter four which deals with education and entrepreneurial values. The final two chapters draw upon the experiences of successful entrepreneurs and provides anecdotes for black businesses to emulate.

While this book offers an interesting paradigm for future research on black businesses, it does not offer the sociological interpretation of entrepreneurship that is its stated objective. Additionally, the unique insights that can be gained from the economic development perspective to black entrepreneurship are not exploited.

There is a rapid transformation taking place among black businesses today. Over the past decade, the financial strength and industry diversity of these businesses have increased significantly. This change however is usually missed by most researchers because it is not accurately reflected in the Commerce Department's Survey of Minority Owned Business Enterprises data. In particular, that survey omits subchapter C corporations which are large companies and also those constituting the class of black businesses where the changes are most pronounced. Federal, state and particularly local minority preference programs are primarily responsible for this recent growth and diversification. It is still difficult for minority entrepreneurs to penetrate private majority markets. As a result, many successful minority businesses have gained their initial market share through preference programs. These opportunities have in turn led to the greater diversity and financial strength of black businesses and have attracted new cadres of black entrepreneurs out of the corporate sector and into self-employment. In short, the emergence of the black entrepreneur, that the authors of this book are in favor of, is beginning to take shape across the country. Yet is not clear how aware of this new trend the authors are.

Despite its shortcomings, I believe the book is worthy of serious consideration and has the ingredients that may eventually lead to an altered dialogue on the question of black business development.
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Author:Boston, Thomas D.
Publication:Southern Economic Journal
Article Type:Book Review
Date:Oct 1, 1992
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