Renaissance

A Call to Action: 'There Are Barriers to Growing Small Business in Detroit'

August 21, 2017, 1:01 PM by  Alan Stamm

A detailed look at Detroit's post-bankruptcy health reinforces a stark reality: Many resident still are bypassed as the city's economy rebounds and more neighborhoods start to stabilize.

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That conclusion is in an 80-page report issued this weekend by Detroit Future City and summarized in Crain's Detroit Business. It's titled "139 Square Miles – Examining Population, People, Economy and Place."

The study is "the first comprehensive, citywide, data-driven report that our organization has produced for Detroit since 2012, when we released the DFC Strategic Framework, the 50-year shared vision for the city’s future," says the independent nonprofit organization.

Sherri Welch of Crain's talks with Executive Director Anika Goss-Foster, who says:

"We are in a place in Detroit where we are finally on the map for economic gains. [But] we need to look at an economic strategy for Detroiters to participate in the economic growth . . . to be thinking about jobs for Detroit that create pathways to wealth."

Welch adds:

Detroit has added 30,000 private-sector jobs since 2010, slightly outpacing growth in the rest of the country, according to the report's economy section. . . .

But there are only 30 private sector jobs available for every 100 Detroit residents, according to the report. And only 20 percent of Detroiters hold an associate's degree or higher.

"Employment for current residents ... and racial equity in employment is a high priority," said Laura Trudeau, chair of the Detroit Future City board and retired managing director of the Kresge Foundation's Detroit program. "It came through in the report that there are still disparities [between] African-Americans and whites in the city."

In 2015, the median income in the city was less than half that of the region, and nearly a third of Detroit households made less than $15,000 per year, according to the report.


Anika Goss-Foster: "We need . . . to be thinking about jobs for Detroit that create pathways to wealth." (Facebook photo)

Drama surfaces amid the charts and numbers when the report examines small business ownership, as Welch recounts:

About 80 percent of Detroit's 672,000 residents are African-American, but the city ranks 11th in the country for the number of African-American-owned businesses.

"That is a pure equity issue," said Goss-Foster. "It's a clear sign there are barriers to growing small business in Detroit."

Her team's research shows that 98 percent of Detroit's black-owned firms have just one employee, typically the founder. 

"What's hard to measure is why," Goss-Foster said. "Is it the kind of businesses started? Is it capital and lack of access to it or lack of credit?"

About 80 percent of Detroit's 672,000 residents are African-American, but the city ranks 11th in the country for the number of African-American-owned businesses.

The analysis also explores population and housing ownership data.

Detroit Future City is financed by the Kresge Foundation, Knight Foundation, two other foundations and the Michigan State Housing Development Authority.

Full report: The 80-page PDF is here.


Read more:  Crain's Detroit Business


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