Entrepreneurship in Kansas City:
For Everyone
by Carl J. Schramm
Research has demonstrated that new businesses account for a significant proportion of the breakthrough inventions of our modern age, such as the airplane, the automobile, air conditioning, the personal computer, and internet search engines—to name a few.
I am privileged to lead a foundation founded by one of Kansas City's great entrepreneurs, Ewing Kauffman. Mr. Kauffman was ahead of his time in business and in his philanthropy. Of special importance to us at the Foundation, Mr. Kauffman was one of the first foundation founders to recognize the importance of promoting entrepreneurship as a way for individuals to control their own destiny and for the economy to innovate and grow.
It turns out that Mr. Kauffman was on target. Research has demonstrated that new businesses account for a significant proportion of the breakthrough inventions of our modern age, such as the airplane, the automobile, air conditioning, the personal computer, and more recently, Internet search engines—to name just a few. Such advances are essential to improving incomes, and thus living standards, for all Americans. In addition, we now know that entrepreneurship offers a way for millions of Americans, including immigrants, minorities, and women, to enter the mainstream of American economic life.
But we also know from academic research over the years that individuals from some ethnic and racial groups have had more difficulty walking through those doors than others. For example, black Americans are 50 percent more likely than white Americans to be trying, at any point in time, to open their business. Yet when it comes to actually owning and operating a business, both African Americans and Latinos lag behind whites. African Americans account for just 4 percent of all U.S. firms, Latinos just 6 percent. Both figures are well below the 13 percent share of the overall U.S. population each group currently represents.
Moreover, it's not just ownership rates that lag. Minority-owned businesses tend to be small, and thus lack the size to realize economies of scale.
That is why we are proud to be joining together with the National Urban League, the Business Roundtable, and the Small Business Administration in a new “Urban Entrepreneur Partnership” program. The UEP will promote minority entrepreneurship by providing coaching to entrepreneurs and access to capital, both of which are essential. Banks or angel investors won't back any venture unless they can be confident it will provide returns that justify the risks. Pairing minority entrepreneurs who have or want to acquire the training to be in business for themselves with experienced coaches is a way to provide that confidence.
The UEP is launching its initiative in five cities around the country. We are proud that Kansas City will be among them. As a compliment to this initiative, we hope in the near future to launch a new non-profit organization devoted exclusively to coaching, which will be headed by Michael Dayton, formerly the CFO of the Community Development Corporation of Kansas City. Michael will be working closely with Kansas City's own Urban League, as well as with the numerous other organizations in Kansas City that provide training and technical assistance to minority entrepreneurs, including those that serve the area's Latino population.
Fortunately, we have a good—and too often unrecognized—base upon which to build. A recent survey conducted for us by the Kansas City office of the Initiative for a Competitive Inner City revealed that there are more than 200 minority-owned businesses in the Kansas City metropolitan area with annual revenues over $250,000. We want to help these companies grow and to encourage the formation of additional minority-owned businesses in our city.
Increasingly, minorities will be the workers and consumers of tomorrow. It is only right and just that society does all it can to help them become the entrepreneurs of tomorrow as well. We hope all Kansas Citians are as proud as we are that our community will be in the vanguard of this effort.
Carl J. Schramm is the President and CEO of the Ewing Marion Kauffman Foundation. He may be reached at 816.751.1000. For more information, visit www.kauffman.org.