By Larry Ivory, Chairman, The National Black Chamber of Commerce (NBCC)
As our country joined together to celebrate Black History Month, we reflected on the many accomplishments of the Black trailblazers, innovators, and entrepreneurs who have driven our economy and society forward.
While Black History Month marks a time to recognize the past, celebrate victories, and look toward a bright future, it is also a time to reflect on the challenges still facing communities of color. This is especially true as we move beyond one of the most economically turbulent times in recent history due to the pandemic.
COVID-19 triggered a series of significant hardships for American families and employers, especially small business owners who faced increasing financial pressure as many were forced to temporarily shutter or close for good.
While Black-owned businesses play an outsized role in powering the American economy, accounting for more than $138 billion in revenue each year, they were also disproportionately affected by the pandemic. In fact, a study by the Federal Reserve Bank of New York found that while the “overall number of active business owners fell by 22 percent from February to April 2020,” the rate among black-owned businesses was nearly double, reaching 41 percent. McKinsey’s U.S. Small Business Pulse survey also found “55 percent of minority-owned small businesses were forced to lay off or furlough staff to stay open during the pandemic.”
Amid these challenges, our nation also experienced a long-overdue national reckoning over issues of race and social justice, and while this was a catalyst for positive change, racial disparities still exist for Black communities and businesses across the country.
Technology helped many Black business owners and their employees share their voices and expand their reach, providing them with vital tools to navigate months of uncertainty and volatility. Technological innovations provided Black-owned businesses with a lifeline to endure and eventually overcome the devastating economic effects of this pandemic. By leaning on social media, online advertising and digital marketing tools, businesses were able to connect with their customers, maintain lines of revenue and, for many, allow employees to come back to their storefront or work remotely.
Without technology, roughly one-third of small business owners said they would have been forced to close all or part of their business in early stages of the pandemic. Since that time, businesses have only become more heavily dependent upon technology for day-to-day operations and sales. In fact, 43 percent of small businesses plan to expand through digital and tech-related tools following the pandemic.
Given the magnitude of small businesses’ reliance on technology, lawmakers must be careful not to hamstring the economic recovery of Black-owned small businesses by passing anti-innovation legislation currently being considered in Congress. These proposals result in unintended consequences that would hinder the technology platforms and digital tools that businesses and consumers have come to rely on in order to grow and thrive in an increasingly digital marketplace.
As we move beyond the pandemic, the future is bright. A 2021 study that found that new small business start-ups have surged in Black communities. To keep this progress going, we must ensure federal policies promote, not derail, this incredible growth and innovation in communities of color. Policymakers must recognize the tremendous benefit that American tech innovation offers to the many Black entrepreneurs who power our economy and move our society forward.