Economic Globalization and the Future of Black America

Transcription

Economic Globalization and the Future of Black America
Economic Globalization and the Future of Black America
Author(s): James H. Johnson Jr., Grover C. Burthey III and Kevin Ghorm
Reviewed work(s):
Source: Journal of Black Studies, Vol. 38, No. 6 (Jul., 2008), pp. 883-899
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EconomicGlobalization
and theFutureofBlack
America
Journalof Black Studies
Volume38 Number6
My 2008 883-899
© 2008 Sage Publications
10.1177/0021934706290981
~
http://jbs.sagepub.com
hostedat
http://online.sagepub.com
JamesH. Johnson
Jr.
University
ofNorthCarolinaat ChapelHill
GroverC. Burthey
III
Wharton
School,University
ofPennsylvania
KevinGhorm
University
ofNorthCarolinaat ChapelHill
This articleassesses the AfricanAmericanexperiencewith economic
- theincreasing
forgoodsand servicesconsumedin
tendency
globalization
incountries
theUnitedStatestobe producedoffshore
likeMexico,India,and
theraciallydisparateeffects
of theshiftof blue-collar
China.It documents
whichbeganin the 1960s and continuesto thepresent,
and
jobs offshore,
American
estimates
thesize oftheAfrican
that
is
at
risk
of
future
population
movement
ofwhite-collar
job lossduetotheoffshore
jobs- a post-1990phenomenon.The articleconcludeswith a set of strategiesthatAfrican
mustpursueto survive,
andprosperin theyearsaheadin
Americans
thrive,
thehighlyunpredictable
andturbulent
globaleconomyofthe21stcentury.
Black entrepreneurship
Keywords: economicglobalization;offshore
outsourcing;
- theincreasing
forgoodsand services
tendency
globalization
in theUnitedStatesto be produced
offshore
in countries
consumed
like
threatens
thecurrent
andfuture
Mexico,India,andChina- seriously
employoftheAmerican
worker
mentprospects
(Engardioet al, 2003; Hira& Hira,
thateventhemosthighly
educated
2005;Prestowitz,
2005).Research
suggests
Americanworkeris vulnerableto thepowerfulforcesof globalization
2005;Hira& Hira,2005).TheEconomicPolicy
2004;Friedman,
(Buchholz,
inlong-term
for
thatthepercentage
increase
unemInstitute
reports, example,
with
some
months
or
was
6
more)
(i.e.,
greater
amongpeople
college
ployment
(299%)thanitwasamongpeoplewith
(259%)ora bachelor's
degreeorhigher
&
a highschooldegreeor less (156%) between2000 and 2003 (Allegretto
Stettner,
2004).
883
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884
Journal
ofBlack Studies
In thisarticle,we assess theAfricanAmericanexperiencewitheconomic
globalization.Specifically,we documenttheraciallydisparateeffectsof the
shiftof blue-collar jobs offshoreand estimate the size of the African
Americanpopulationthatis at risk of futurejob loss due to the offshore
movementof white-collarjobs. We conclude by outliningstrategiesthat
AfricanAmericansmustpursueto survive,thrive,and prosperin the years
ahead in the knowledge-intensive
and speed-driveneconomy of the 21st
century.
Backgroundand Context
Americanworkers'increasingemploymentvulnerabilityin the internationalmarketplaceis rootedin twowaves ofeconomicglobalization.The first
wave involvedtheoffshore
movementofblue-collarjobs, whereasthesecond
wave involvesthe shiftof white-collar
2005).
jobs offshore(Ernsberger,
The firstwave of globalizationbegan in earnestin the early 1960s and
continuesto thisday. Nationally,5.3 millionmanufacturing
jobs have been
lost since 1979. Roughlyhalf of thisjob loss occurredbetweenJuly2000
and July2003 (CongressionalBudget Office,2004; Press Associates Union
News Service, 2003).
The Americanpublic's anxietiesabout thefirstwave of globalizationare
capturedmost vividly in the experience of one fictionalbut typical displaced blue-collarworker.We'll call him Joe Smith.
Joe Smithstartedhis day early,havingset his alarmclock (MADE IN
he
JAPAN)for6 a.m.Whilehiscoffeepot(MADE IN CHINA) was perking,
shavedwithhiselectricrazor(MADE IN HONG KONG). He puton a dress
shirt(MADE IN SRI LANKA),jeans (MADE IN SINGAPORE),andtennis
shoes(MADE IN KOREA).
After
inhisnewelectricskillet(MADE IN INDIA),
cookinghisbreakfast
he satdownwithhis calculator(MADE IN MEXICO) to see howmuchhe
couldspendtoday.Aftersetting
hiswatch(MADE IN TAIWAN)totheradio
to
(MADE IN INDIA), he gotin his car (MADE IN JAPAN)andcontinued
searchfora good-paying
American
job.
At theend of yetanotherdiscouraging
and fruitless
day,Joedecidedto
relaxfora while.He puton his sandals(MADE IN BRAZIL), pouredhimon hisTV (MADE IN
selfa glassofwine(MADE IN FRANCE),andturned
INDONESIA), and thenwonderedwhyhe can't finda good-paying
job
in ... AMERICA.
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et al. /The FutureofBlackAmerica 885
Johnson
todisplacedblue-collar
hasbeentogo backtoschool
workers
Ourmantra
in
the
information
andre-toolforwhite-collar
But,ironically,
jobs
economy.
intheearly
white-collar
offshore
U.S.-basedcorporations
beganmoving
jobs
with
low-level
1990s(Friedman,
2005; Hira& Hira,2005).Thisshift
began
werelessenthusiastic
aboutperforming
serviceworkthatU.S. workers
such
credit
card
in
as writing
and
code,
computer processing
charges, working customerservicecall centers
& Parkhe,
Bhaumik,
Kanakamedala,
(Amoribieta,
2001;Easton,2003;Waldman,
2003).Duringthelate1990s,thetrendaccelcontracted
withoffshore
vendorsto addresstheirY2K
eratedas U.S. firms
needs
et
al.,
(Amoribieta
2001).
programming
inaneffort
tocutcostsduring
thelatestrecession,
Morerecently,
U.S. corvendors
in
what
is
as
have
offshore
known
business
engaged
porations
which
involves
a
of
business
functions,
range
including
processoutsourcing,
and customer
care
sales,marketing,
operations,
management,
supply-chain
somestategovernments
havecontracted
with
2001).In addition,
(Bandham,
vendorsforvariousservices,notably,
call centersforfoodstamp
offshore
&
Prinz,
Purinton,
2004).
(Mattera,
Woolsey,
programs
is movingupthevaluechain
Now,thetrendtowardoffshore
outsourcing
- whatis
functions
withinU.S. firmsto higherorder,knowledgeintensive
knownas knowledge
(Bhandari,
2003). Thisdevelopprocessoutsourcing
DeloitteResearch
mentis mostevidentin thefinancialservicesindustry.
thatpotentially
2.0 millionAmerican
jobs in thebankingandsecureports
abroad(Rosenthal,
ritiesindustries
couldbe losttooutsourcing
2003).And
that"thetop15 globalfinancial
institutions
will
theTowerGroup
estimates
offshore
outincreaseinformation
technology
spendingon vendor-direct
- representing
an increasefrom$1.6 billionin
sourcingby 34% annually
2004 to $3.89 billionin 2008" ("TopFinancialInstitutions,"
2004).
No oneknowsforsurehowmanyU.S.-basedwhite-collar
jobs arelikely
TheU.S. BureauofLaborStatistics
isjustnowbeginning
tomoveoffshore.
thetrend(U.S. NewsWire,2004).
to monitor
to gatherdatasystematically
ofCalifornia,
thatabout14
a University
However,
Berkeleystudyestimates
base- are conmillionU.S. jobs- roughly11% of theU.S. employment
in occupationsvulnerableto offshore
centrated
(Bardhan&
outsourcing
Kroll,2003).
in laser-like
withhisemployer
recentexperience
JimBrannon's
captures
ofthissecondwaveofglobalization,
fashionthereality
especiallyas ithas
In contrast
tothefictional
bluemovedupthevaluechaininU.S. businesses.
Brannon
is a realpersonwholives
described
JoeSmith,
collarworker,
earlier,
in a largeinformation
firm.
He was an executive
inAtlanta.
technology
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886
Journal
ofBlackStudies
Atthetopofhiswhite-collar
littleabouthisjob.
game,JimBrannonworried
He was six-figure
software
an educatedman witha jet-setting
successful,
couldn'ttouchhim.He
job. . . . The vagariesof freetradeandglobalization
information
techwas,afterall, a vauntedexecutive... in a world-spanning
Itwas theblue-collar
Joe,Brannonbelieved,who'dwake
nology[company].
anddiscoverhisfactory
up one morning
job hadgoneto MexicoorChina.
inFebruary
2002.A letter
Brannon,
though,
experienced
justsucha morning
orderedhimto clearouthis deskby day'send.Gonewerethefancyoffice,
ofinvincibility,
andonce-solid
beliefintherighteousexpenseaccount,
feeling
nessofCorporate
America.
now52,represents
oneofthehundreds
ofAmerican
ofthousands
Brannon,
white-collar
workers
whosejobshavedisappeared
inthepast3 years.While[his
former
desiretocutcostswaspartly
toblameforBrannon's
unememployer's]
he saysa majorculprit
was offshore
2003).
ployment,
outsourcing
(Chapman,
Most economistsdownplaythepublic'sgrowingconcernsaboutoffshoringof white-collar
jobs (Drezner,2004; Mann,2003). Theycontend
thattheUnitedStateswill developthenextwaveof innovations
thatwill
createevenbetterand higherpayingjobs thanthoselostto offshore
outtheUnitedStateshas demonstrated
a highlevelof
sourcing.Historically,
resiliencein responseto globalization
and structural
changesin theeconomy.But,severalrecentdevelopments
challengeourinnovation
capacity
andthusourabilityto createthenextwaveofgoodjobs in theyearsahead
2005; Segal,2004).
(Engardio& Einhorn,
theglobalcompetitive
ConsiderthedevelopFirst,
landscapeis changing.
- China,India,and
nations
that
are
and
free
trade
ing
embracing
capitalism
theformer
SovietUnion,amongothers(Joseph,
Koehler
et al., 2004;
2002;
these
nations
have
a
thatis
Krishnan,
2004b,2004c).Collectively,
population
10 timesthatof theUnitedStates.Theyproduceannuallyfarmorewelltrained
thanwe do as a nation(Krishnan,
2004c).Andtheir
collegegraduates
the
same
work
as
workers
for
educated
American
collegegraduates
perform
abouta tenthof thecost(Beckman,2003; Guerra,2002). Moreover,
these
countries
haveinvested
in newtechnological
infrastructure
and createdthe
businessandregulatory
to
with
theUnited
environment
necessary compete
States(Gupta,2003).
totheUnitedStateshavemadeup muchofthetalent
Second,immigrants
in oureconomy.
that
has
driven
innovation
led manyofthe
pool
Immigrants
that
fueled
the
economic
boomof the
high-technology
start-up
companies
1990s (Saxenian,2000). And international
students
and children
of immiare
for
all
of
the
enrollment
growth
grants principally
responsible nearly
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et al. /The FutureofBlackAmerica 887
Johnson
- the training
in the physicalsciences,math,and engineering
programs
and
incubators
for
new
advances
that
lend
scientific
themselves
to
grounds
- at boththeundergraduate
and graduatelevelsof U.S.
commercialization
highereducation(Ante,2004; Engardio& Roberts,2004; Schemo,2001;
"SourcesofVitality,"
2001).
restrictions
the9/11terrorist
attacksconstrain
Butsecurity
imposedafter
threaten
our
theflowof foreigntalentintotheUnitedStatesand thereby
of
to
the
next
innovators
and
innovations
(Ante,
generation
ability develop
2004; Johnson,2002; Johnson&
2004; Council on Competitiveness,
researchindicatesthatsomeoftheimmigrants
Kasarda,2003). Moreover,
ofinnovations
thatdrovethe1990s
whowereengagedin thedevelopment
homeandsetting
economicboomarenowreturning
up businessesthatwill
firms
in
fields
like
with
U.S.
-based
and nanotechbiotechnology
compete
2004;
Goswami,
2004;
Krishnan,
2004b;
Nair,
2004).
(Florida,
nology
firms
are
mostthreatening,
U.S.-based
a
Third,andperhaps
many
shifting
of
their
research
and
activities
off(R&D)
development
significant
proportion
one ofAmerica'smost
shore(Engardio& Einhorn,
2005). GeneralElectric,
wasoneofthefirst
to
establish
anoffshore
R&D facilrevered
firms,
companies
in
The
in
2000
John
F.
Welch
India,
(Rose,
2002).
Technology
ity Bangalore,
- two
and researchers
Centrehostsmorethan1,600scientists,
engineers,
"breakthirdsof whomhave advanceddegrees.Chargedwithdeveloping
ofGE businesses,"
thattranslate
intogrowth
thecenter
technologies
through
disclosures
forresearch
anddevelhas"filedmorethan150patent
reportedly
activities"
since2000 ("GE Expands,"2002).
opment
multinational
FollowingGE's lead,a wide arrayof U.S.-headquartered
inIndiaandotherdeveloping
R&D facilities
offshore
firms
haveestablished
nations(Krishnan,
2004a). Muchof theworkin drugdiscovery
(bioinformoregenerally),
forexample,reportedly
andgenomics,
matics,proteomics,
is shifting
toHyderabad,
GenomeValley(Iype,2004).
India,nicknamed
ofthefactthattheUnitedStatesis losingitsinnovation
Emblematic
capacwhichincluded
"theresearch
labsthatdeveloped
plants,
ity,164U.S. chemical
foreverything
from
handsoaptohomeinsulation
to[computer]
keyingredients
haveshutdownsince2001,idlingmorethan120,000workers
harddrives,"
"ofthe120 chemicalplantsbeingbuiltaroundthe
2005).Moreover,
(Arndt,
worldwithpricetagsof$1 billionormore,justone- a 1,725-acre
polyvinyl
La.- is intheU.S
has
chloride
China,bycomparison,
plantinPlaguemine,
on thisshift,
Arndt(2005) notesthat"bigger,
50" (Arndt,
2005).Elaborating
inthedeveloping
worldare
markets
areoverseas.
Newfacilities
faster-growing
ifnotmoreso."
andproductive
as thoseinAmerica,
oftenas sophisticated
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888
Journal
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Commentingon how theoffshoremovementof R&D activitiesthreatens
the nation's innovationcapacity,U.S. Senator Joe Lieberman stated in a
recentreport(Koehleret al, 2004),
The innovation
infrastructure
thatservedus wellin thefaceofless formidable competition
is no longersufficient
in thefaceof thisnewfierceglobal
ofourinnovation
infrastructure
aredeterioratcompetition.
Keycomponents
forR&D, thenumber
ofscienceandtechnology
ingas federalfunding
gradin theU.S. continue
to decline.
uates,andbusinessinvestments
He wenton to statethat
ourinnovation
undermined
capacityis further
bythemassivebudgetdeficits
whichthreaten
future
in R&D and education,and increaseour
investments
exposureto currency
manipulation
by foreignleaders.This subsequently
leads to theloss of manufacturing
and servicejobs. Ourcompetitiveness
is
further
tradeagreements
thatare not adecompromised
by international
whenourtradepartners
failtoliveup totheircommitments.
quatelyenforced
Whatdoes thisominoustrendportendforU.S. competitiveness
in the
Arndt
asserts
the
that
"for
the
U.S.,
(2005)
global marketplace?
likely
resultsare less investment,
fewerjobs, and fewerscientific
discoveries."
thelikelyeffects
in thefollowing
(2005) characterizes
Ernsberger
way:
In the yearsahead,sizable numbersof skilled,reasonablywell-educated
middle-income
in service-sector
workers
safefromforjobs longconsidered
- accounting,
andriskmanagement,
healthcareand
law,financial
eigntrade
information
to namea few- couldbe facinglayoffsor serious
technology,
nationsperform
offwagepressureas developing
increasingly
sophisticated
shorework.Theshift
a dramatic
ofwealthoverthenext
portends
realignment
- valued... at "hundreds
ofbillionsofdollars."
coupleofgenerations
A recentOrganization
forInternational
Investment
(OFII) surveyof
morethan100 top-levelexecutivesof majorU.S. subsidiaries
of foreign
seem
to
these
bleak
to
companies
support
prognoses.
According theOFII,
U.S. subsidiaries
of foreign-owned
"insource
5.4 millionjobs
companies
an
annual
of
billion."
The
OFII
$307
supporting
payroll
Insourcing
Survey
2005 was designedto "gaugehowtheUnitedStatesis perceivedas a locationforbusinessinvestment
vis-a-visothernations"(OFII, 2005).
The surveyresultsrevealedthattheUnitedStatesis perceivedas weak
onfourofthetopinvestment
locationcriteria:
healthcarecosts,laborcosts,
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Johnson
et al. /The FutureofBlackAmerica 889
and tax system.The UnitedStateswas ratedstrongin only
legal system,
andskilledworkforce.
Mostofthesurvey
onecategory:
knowledge
respondentsindicatedthattheircompanieswouldincreaseor maintaincurrent
intheshortterm(i.e.,thenext12 months),
levelsofinvestment
buthalfsaid
that"theircompanieshave made Chinatheirmostimportant
for
priority
As Goswami(2004) so aptlystated,it increasingly
futureinvestments."
appearsthatthe"U.S. doesn'tbeckonanymore."
RaciallyDisparateEffectsofEconomicGlobalization
Economicglobalizationhas touchedall U.S. workersin one way or
another
2005; Hira& Hira,2005). ButAfrican
(Buchholz,2004; Friedman,
Americanworkershave been affectedmoreadverselythanWhiteand
especiallyby theshiftof blue-collaror manufacturing
Hispanicworkers,
RisesFaster,"
2003;Johnson,
Farrell,
("BlackUnemployment
jobs offshore
has noted
& Stoloff,
1998;Leonardar2003). As one commentator
Wright,
RisesFaster,"
2003),
("BlackUnemployment
were2 million
blackAmericans
infactory
In 2000,there
working
jobs,or
of thenation'stotalof 20 millionmanufacturing
workers.
10.1percent
intheoverall
workforceinroughly
thesameproBlackswererepresented
thatbeganin March2001;sincethen,
Thencametherecession
portion.
or15percent,
havedisappeared.
White
300,000factory
jobsheldbyblacks,
in all. Butbecausethey
workers
lostmanyfactory
jobs,too- 1.7million
to beginwith,
thedamagewas
weremuchmorenumerous
proportionally
less,just10percent.
ofBlack workers
in themanuOwingin partto thishighconcentration
rate(10.8%) was doublethe
sector,the Black unemployment
facturing
rate(5.4%), 6.2 percentage
nationalunemployment
pointshigherthanthe
rate(4.6%), and4.2% percentage
Whiteunemployment
pointshigherthan
theunemployment
theHispanicrate(6.6%) in December2004. Moreover,
forBlacks(3.2 percentage
raterosefaster
points)thanitdidforWhites(1.1
point)between2000 and
percentage
points)andHispanics(0.9 percentage
2004 (BureauofLaborStatistics,
2005).
The blue-collar
job exodushas hitBlackmenolderthan20 yearsofage
and Black youthbetweentheages of 16 and 19 especiallyhard.Between
raterosefaster
forBlackmenthanforany
2000and2004,theunemployment
AndinDecember2004,theunemployment
rate
other
subgroup.
demographic
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890
Journal
ofBlackStudies
forBlack youth(30.8%) was doublethe rateforWhiteyouth(15.7%)
(BureauofLaborStatistics,
2005).
Becauseitis a fairly
itremainsunclearhowAfrican
recentdevelopment,
Americanshavebeen affected
the
movement
of white-collar
by
jobs offshore.To providea perspective
on thelikelyeffects,
we extracted
datafrom
theCensus2000 PublicUse MicrodataSampleson theabsolutenumber
andpercentage
ofAfrican
Americanswhowereemployedin white-collar
For comparison
occupationsmostat riskof goingoffshore.
purposes,we
also extracted
dataontheabsolutenumber
ofall U.S. workandpercentage
ersemployedin themostvulnerable
occupations.
In 2000,as Figure1 shows,11.3%(2.2 million)ofall employed
African
Americans
in occupations
thatareat risk
(19.1 million)wereconcentrated
ofgoingoffshore.
Blackswerenotas vulnerable
as
as theU.S. workforce
a whole- 13.2% ofall U.S. jobs areat riskofmovingoffshore.1
Butthere
werecertainoccupationalnichesin whichBlacks weremorevulnerable
thanall U.S. workers:
humanresourcemanagement,
paralegalsand assisandcustomer
care(see Figure1). It is interesttants,andsales,marketing,
thespecificbusinessfunctions
that
ingthattheseoccupations
represented
to offshore
venlargeand smallfirmsalikewereaggressively
outsourcing
dors.Thus,AfricanAmericanswereslightly
morevulnerable
to offshore
- at leastat the
outsource-related
job loss thanotherdemographic
groups
ofthisdecade.
beginning
Respondingto ExternalThreats
How haveAfricanAmericansrespondedin thepast to powerfuleconomicforcesthathaveadverselyaffected
thestructure
of opportunity
for
theircommunity?
Americans
haveresponded
Historytellsus thatAfrican
and pursuingself-employment
as an
by beingfarmoreentrepreneurial
avenueof upwardmobility(Butler,1991). ThreeexamplesfromAfrican
Americanhistory
areillustrative.
was thefirststatein thenationto emancipate
itsslavesin
Pennsylvania
1780. Fifty-eight
yearslater,a snapshotof AfricanAmericanentrepreneurialism
was providedwhen"A RegisterofTradesofColoredPeoplein
theCityofPhiladelphia
andDistricts"
was publishedin 1838.The register
listed656 personswhowereengagedin 57 different
Included
occupations.
inthedirectory
wereBlackbakers,custombootandshoemakers,
bricklayersandplasterers,
brushmakers,cabinetmakers,carpenters,
caulkersand
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Johnson
et al. /The FutureofBlackAmerica 891
Figure1
Totaland Black Employment
in Occupationsat
Risk ofOffshoreOutsourcing
Source:CompiledbyauthorfromCensus2000 PublicUse MicrodataSamples.
confectioners
themanwhoinvented
ice cream),
chairbottomers,
(including
a dentist
andtailoresses,
(whomanufactured
porcelainteeth),dressmakers
andcaterers
(Minton,1913).
plumbers,
In themid-1800s,Philadelphia'sBlack businessesserveda primarily
WhiteclienteleandsomeoftheBlack-owned
businesshadWhiteemployees. Moreover,Blacks controlledsome lines of business.For example,
thecatering
Blacksreportedly
andrestaurant
business,which
monopolized
famousas a cityofgoodfood"(Minton,1913).
"made[Philadelphia]
The 1920swerealso a periodofrapidBlackbusinessgrowth.
Itis interduringthisperiodwas a responseto risingBlack-White
estingthatgrowth
ofBlacksfromtherural
migration
antagonisms
spawnedbythelarge-scale
in 26 majorraceriotsin U.S.
Southto theurbanNorth,whichculminated
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892
Journal
ofBlack Studies
cities in 1919 (Bates, 1997). These criticaldevelopments
"markedthe
of
the
end
for
Black
that
relied
affluent
white
businesses
on
beginning
clients."Whiteantipathy
towardBlacksled to a growingsentiment
in the
African
Americancommunity
to "buyBlack."
Black-owned
insurance
andBlack-owned
werean
companies
newspapers
of thisgrowingracial consciousness.
the
outgrowth
Describing African
American
businesscommunity
inthe1920s,one study(Butler,1991)noted,
Blackprogress
wasparticularly
inlifeinsurance:
32firms
apparent
employed
andcontrolled
assets
ofover$18million
in1928 By1930,an
6,000agents
estimated
intheUnited
businesses
wereoperating
70,000black-owned
States,
a 700percent
increase
over1900.. . . The1920swerethegolden
forthe
years
urban
blackbusiness
community.2
(p.35)
Nationally,
manyof theBlack-ownedfirmsestablishedduringthe 1920s
werefinancedby churchesand fraternal
and patronized
organizations
by
members
oftheseorganizations.
It is unfortunate
thattheGreatDepression
muchofthegroundgainedduringthe1920s(Bates,1997).
destroyed
- roughly1980 to the present
- represents
The past 20 years
a third
in
and selfperiod AfricanAmericanhistoryin whichentrepreneurship
have been embracedas a strategyfor upwardmobility
employment
shiftin
(Daniels,2003). Duringthisperiod,therehas beena fundamental
boththecharacteristics
ofAfrican
Americansmallbusinessownersandthe
established
(Bates,1997).
typesofbusinessventures
Whereasthetraditional
Black businessownerof theearlyto mid-20th
was uneducated,
and servedprimarily
a Black
century
undercapitalized,
theemergent
classofBlackentrepreneur/small
businessownerof
clientele,
thepost-1980 period(a) is collegeeducated,oftenMBA-trained;
(b) provides one or moreprofessionalservices;(c) has paid employees;and
orraciallydiverseclientele,
(d) catersto a nonminority
including
corporate
and government
clients.Researchshowsthatthesenewlyemerging
firms
have been amongsome of the fastestgrowingbusinessesin the nation
(Bates,1997;Daniels,2003; Hopkins,2005).
set-aside or preferential
contributed
to
Minority
procurement
programs
therapidgrowth
of thesebusinesses(Boston,1999). Emblematic
of their
Black-owned
firms
importance,
nearly40% ofthemostrapidlygrowing
theso-called"new gazelles"- indicatedin a recentsurveythatminority
set-asideprograms
had a "significant"
effect
on theirgrowth
anddevelopment(BostonResearchGroup,2002).
This content downloaded on Thu, 24 Jan 2013 00:42:32 AM
All use subject to JSTOR Terms and Conditions
et al. /The FutureofBlackAmerica 893
Johnson
MovingForward
effects
oftheoffshore
Giventheraciallydisparate
movement
employment
African
ofblue-collar
and
the
size
of
the
American
atriskof
jobs
population
due
to
the
off
of
white-collar
African
loss
Americans
services,
shoring
job
cannotassumethatgood-paying
jobs intheUnitedStateswillbe either
readily
ofemployment.
Globalization's
accessibleorsecureforms
too
paceis simply
fastandtheinternational
too
intense
for
African
Americans
even
competition
mostprestigious
thosegraduating
from
thenation's
collegesanduniversities
foreconomicsurvival.
torelyon majorcorporations
African
To thrive
andprosperinthefuture,
Americans
mustbuildon the
tradition
that
has
served
as
the
of economicsurlynchpin
entrepreneurial
vivalatvariousperiodsinhistory
(Bates,1997;Butler,1991;Minton,1913;
thatAfrican
American-owned
businesses
Schramm,
2004). It is imperative
and
in
future
tothrive,
the
because
are
continue
prosper, grow
they farmore
in thesame
African
Americans
than
White-owned
firms
to
likely employ
businessniches(Boston& Ross, 1997).
businesseswillfacetwomajorhurdlesor
ButAfrican
American-owned
obstaclesin theyearsahead (The BostonConsulting
Group,2005). The
Because of legal challenges,
to minority
set-asideprograms.
firstpertains
tobe a viableoptionforAfrican
American
busisuchprograms
areunlikely
in thefuture(Boston,1999). The second
ness growthand development
movement
of white-collar
businessprocessesand
relatesto theoffshore
from
offshore
functions.
vendors,who
knowledge-intensive
Competition
white-collar
services
at
arecapableofproviding
highquality
globallycoma
to
the
survival
and
is
threat
major
viabilityof African
petitiveprices,
in
businesses
similar
niches.3
African
Americans
American-owned
operating
mustdevelopgloballycompetitive
strategies,
includingpossiblyforging
vendors,to overcometheseand other
strategicallianceswithoffshore
iftheyareto remainprofitable
in theforeseeable
threats
future.
thesurvival,
In additionto ensuring
and expansionof existing
growth,
AfricanAmerican-owned
"bootcamps"and
businesses,entrepreneurship
shouldbe offered
on a routine
basisthroughout
businessplancompetitions
to assistAfricanAmericanswho haveentrepreneurial
thecountry
aspiratheircreativeideas and innovations
intocompetitive
tionsto transform
Americanbusismallbusinesses.The overarching
goal is to moveAfrican
ness ideas to marketmorequicklythancan be achievedvia traditional
businessassistanceprograms.
minority
This content downloaded on Thu, 24 Jan 2013 00:42:32 AM
All use subject to JSTOR Terms and Conditions
894
Journal
ofBlack Studies
The bootcampsshouldofferaspiringAfricanAmericanentrepreneurs
intensive
shortcoursesinall ofthecorefunctional
areasofbusiness,as well
as technicaland legal assistancein suchareasas securinga patent,
tradeand
commercialization.
The
business
marking, technology
plan competitions shouldprovidea nationalforumfor aspiringAfricanAmerican
toreceivecriticalfeedbackontheirbusinessideasandtonetentrepreneurs
workwithotherentrepreneurs,
The
andventure
angelinvestors,
capitalists.
NationalBlack MBA Association,perhapsin collaborationwith the
nation'stopbusinessschools,shouldchampiontheseinitiatives.
African
in
Americans
also mustpushforgreater
content
entrepreneurial
bothK-12 andhighereducation.
Giventhatrapidandunpredictable
change
is likelyto be theonlyconstant
in thefuture,
African
American
(andother)
fromall levelsoftheU.S. education
with
youthwillneedtograduate
system
- a demonstrated
acumen
totakeincalcugreater
entrepreneurial
willingness
lable risksand theabilityto be agile,flexible,tenacious,and decisivein
tounanticipated
andopportunities.
responding
challenges
AfricanAmericanyouthwiththeseessentialskills,the
By graduating
U.S. educationsystem
willgo a longwaytowardcreating
thenextandsucof notonlytraditional
in businessvenceedinggenerations
entrepreneurs
butalso social andcivicentrepreneurs
who arecommitted
to using
turing
theirentrepreneurial
talentsto makemeaningful
changein thenonprofit
andgovernment
sectors(Bornstein,
2004).
Finally,the wealththatexistsin the AfricanAmericancommunity
thesubstantial
resourcesofthefaithcommunity)
mustbe lever(including
aged to createnew,and expandexisting,
minority-focused
pools of angel
andventure
new
capital.Suchpools ofcapitalwillbe neededtojumpstart
African
American-owned
and-operatedbusinessesandto groworexpand
ones(Bradford
& Bates,2004).
existing
ConcludingThoughts
After
the"EarlyHistory
ofNegroesinBusinessinPhiladelphia"
chronicling
in a March 1913 addressbeforethe AmericanHistoricalSociety,Dr.
HenryMintonconcludedhisformalremarks
bystating"thatoursalvation
as a racedependsmoreuponcommercial
successthanuponanyotherone
factor"(p. 20). Giventheraciallydisparateeffects
ofthepowerful
forces
ofeconomicglobalization,
ofthe
we believethatDr.Minton'sassessment
AfricanAmericanconditionin 1913 holds equal, if notgreater,
weight
today.
This content downloaded on Thu, 24 Jan 2013 00:42:32 AM
All use subject to JSTOR Terms and Conditions
et al. /The FutureofBlackAmerica 895
Johnson
successfulAfricanAmericanentrepreneurs
have
Throughout
history,
demonstrated
timeand again the uncannyabilityto turnadversity
into
in
with
internal
as
well
as
external
threats.
opportunitydealing
challenges
AfricanAmericansmustrespondto thecurrent
challengesof economic
in
much
the
same
and most
way: by developing,
globalization
nurturing,
the
full
that
exists
in the
unleashing
important,
entrepreneurial
potential
in
African
Americancommunity.
this
will
Responding
way
paygreatdivithe
dendsintheyearsahead.Foremost
will
be
theassurance
among payoffs
thatfuture
of
African
Americans
are
able
to
generations
competesuccessand
in
for
business
the
fully
employment
opportunities
knowledge-based
economyofthe21stcentury.
Notes
1. Our estimatesof theat-riskpopulationare largerthantheBardhanand Kroll(2003)
estimatesbecause we includeselectedoccupationsrepresenting
higherorder,knowledgewhichtheydidnotconsideras beingvulnerable
intensive
to offshore
functions,
outsourcing.
in Durham,NorthCarolina,was one ofthebestexamplesof
2. The Haytibusinessdistrict
whereNorthCarolinaMutualLifeInsurance
Durham'sParrishStreet,
thisvibrancy.
andsevfinancial
servicesfirms
werelocated,was popularly
eralotherBlack-owned
referred
to as the
"BlackWallStreet"in the1930s(Washington,
1981).
firms
3. How vulnerable
areBlack-owned
tothiskindofcompetition?
Ouranalysisofthe
and servicefirmssuggeststhat29 ofthemprovidethetypeofwhite2005 BE 100 industrial
vendors.
collarservicesthatarewidelyavailablefromoffshore
Whatwouldbe thedirecteffect
shareto offshore
iftheseBlack-owned
firmslostmarket
vendors?In 2005,the29 firmsthat
to competition
fromoffshore
vendorsemployedalmost16,000workersand
are vulnerable
sales in excessof$4.3 billion.
generated
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Johnson
et al. /The FutureofBlackAmerica 899
of Management
Professor
JamesH. JohnsonJr.,is theWilliamRandKenanDistinguished
in theKenan-Flagler
BusinessSchoolat theUniversity
ofNorthCarolinaat ChapelHill. His
current
researchactivities
focuson theworkforce
and workplaceimplications
of post-1990
and suschangesin theUnitedStatesandon howto createhighlycompetitive
demographic
in thecurrent
and communities
era of economicuncertainty
tainablebusinessenterprises
and global insecurity.
His recentpublicationsinclude"Racial Apartheidin a Small North
RuralCommunity
CarolinaTown,"in The Reviewof Black PoliticalEconomy,"Fostering
in a Knowledge-Driven
Economy:A NorthCarolinaCase Study,"in the
Competitiveness
and"9/11 andtheEconomicProspects
ofMajorU.S. Cities,"
EconomicDevelopment
Journal,
in Planningand Markets.
School
GroverC. BurtheyIII receivedhisbachelor'sdegreeineconomicsfromtheWharton
witha concentration
in finance.His primary
researchinterofPennsylvania,
attheUniversity
andemerging
economics.
estslie in theareasofeconomicglobalization
BusinessSchool at the
Kevin Ghorm is a 2nd-yearMBA studentin the Kenan-Flagler
researchinterests
lie in theareasof
ofNorthCarolinaat ChapelHill. His primary
University
businessdevelopment
andventure
smallbusinessandminority-owned
financing.
This content downloaded on Thu, 24 Jan 2013 00:42:32 AM
All use subject to JSTOR Terms and Conditions