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Since an estimated 82% of the inner-city population are people of color,21 these high levels of unemployment among African Americans and other people of color have an adverse impact on the growth and development of inner cities. Yet, inner cities hold great potential and are valuable, untapped domestic markets that, if developed, could contribute to the success and health of the national economy and produce businesses that “spur the next growth engine of the U.S. economy. ”22 A strategy to revitalize economically distressed urban areas and decrease their high levels of unemployment is to create and grow viable small businesses in these areas.23 Although it is important to establish viable small businesses owned by people of any race in urban areas to drive economic development, it is particularly important to establish viable small businesses owned by minority urban entrepreneurs in these areas.24 It is essential to develop urban small businesses owned by people of color for several reasons. First, small businesses owned by people of color operating in economically depressed urban areas tend to employ more people of color and residents living in these areas than White-owned
people of color in these areas); see also Unemployment Rates by Race and Ethnicity, 2010, BUREAU OF LABOR STATISTICS, U.S. DEP ’T OF LABOR (Oct. 5, 2011), http://www.bls.gov/opub/ted/2011/ted_20111005.htm. 21. Fairchild, supra note 10, at 3. 22. See id. at 2 –4 (discussing the encouraging social and economic indicators of emerging domestic markets (defined either by ethnic minorities or inner-city neighborhoods), which include decreasing inner-city poverty, raising educational attainment of racial and ethnic minorities, growing minority purchasing power, and migrating back into previously unattractive urban neighborhoods in all major U.S. cities by young, single, college-educated professionals). 23. See Alicia M. Robb & Robert W. Fairlie, Access to Financial Capital Among U.S. Businesses: The Case of African American Firms, 613 ANNALS AM. ACAD. POL. & SOC. SCI. 47, 48 –49 (2007) ( “Stimulating minority business creation in sectors with high growth potential (e.g., construction, wholesale trade, and business services) may also represent an effective public policy for promoting economic development and job creation in poor neighborhoods. ”); see also Lohrentz, supra note 13, at 358. 24. I use minority small business owner, small business owner of color, minority entrepreneur, and urban entrepreneur interchangeably in this Article. There is no common definition of urban entrepreneur, but when I use it in this Article, I use it to mean minority small business owners, small business owners of color, entrepreneurs of color, or minority entrepreneurs. See Susan Jones, Current Issues in Community Economic Development: Supporting Urban Entrepreneurs: Law, Policy, and the Role of Lawyers in Small Business Development, 30 W. NEW ENG. L. REV. 71, 72 –73 (2007) (defining urban entrepreneurs as not having one definition but sometimes meaning minority entrepreneurship and other times meaning small businesses established in or serving economically depressed areas). Although not specifically discussing urban entrepreneurs, the legal scholar W. Sherman Rogers offers a compelling historical study on African American entrepreneurship and asserts the need for African Americans to become entrepreneurs. He states that “[t]he statistics suggest that the families of entrepreneurial African Americans fare better than those who assimilate into the job structure of the dominant culture. Additionally, persons who experience difficulty finding jobs have the option of establishing a business. ” W. SHERMAN ROGERS, THE AFRICAN AMERICAN ENTREPRENEUR THEN AND NOW 20 (2010).