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Fostering Inclusive Entrepreneurial Ecosystems

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The 2012 Kauffman Index of Entrepreneurial Activity, released in mid-April, revealed some great news: Minority entrepreneurship increased 65% between 1996 and 2012, with minorities accounting for 38% of new entrepreneurs last year. This statistic was just one of many positive signs I've seen recently: The 2013 State of Women-Owned Businesses Report noted that today, women of color own 2.7 million firms, a number representing 31% of all women-owned firms. And the U.S. Census Bureau's 2007 Survey of Business Owners found that African American-owned businesses "drove job creation" over the five-year period of 2002 and 2007: Employment increased by 22 percent for these firms. This figure and trend that holds great promise for the well-documented, longstanding challenges African American businesses have experienced in growing the types of larger-scale businesses that generate higher levels of employment opportunities.

But perhaps the statistic I'm most excited to see is one noted in a study on minorities and high-tech employment, which cited U.S. Census data as it said that "the proportion of African Americans employed in computer and mathematics occupations increased from 6.8 percent to 7.1 percent between 2000 and 2008. Similarly, the proportion of Hispanics in these occupations rose from 4.4 percent to 5.3 percent over the same time period." These small gains are significant, as minorities traditionally are underrepresented in high-tech industries in the U.S.; in fact, only 15.9% of minorities were employed in high tech industries in 2010.

As I've discussed before, connecting more minorities to the nation's emerging tech-based economy (via these high-tech industries) is of vital importance for our collective economic future. This bridge-building isn't always easy, however. Traditionally, minority tech entrepreneurs have had limited access to equity capital; many lack the awareness of available opportunities in emerging companies; and, generally, they are not connected to the networks that encompass the people or organizations that help startups grow. Therefore, an inclusive entrepreneurial ecosystem -- one in which all people are active participants and have equal access to emerging opportunities -- hasn't always been an easy thing to nurture.

With this in mind, a few weeks ago, I sat down with two of my colleagues -- serial clean-tech entrepreneur Claude Kennard and Carmen Ortiz-McGhee, a long-time advocate for minority business enterprises who's worked for the U.S. Hispanic Chamber of Commerce and led such national organizations as the Marathon Club, among others -- for a roundtable discussion about fostering these inclusive entrepreneurial ecosystems. The conversation was illuminating and at times sobering, as we tackled the challenges high growth minority entrepreneurs face. However, in the end both Kennard and Ortiz-McGhee agreed with me that there are some truly positive steps happening nationwide to ensure that historically disconnected populations are connected to the greater innovative ecosystem.

In fact, both had some interesting observations about what we entrepreneurs are doing to make connections. For example, Kennard noted that going outside your comfort zone is a great way to enact change. "[I've been] places where I was the only minority in the room pitching my deal," he says. "But as a result I was able to gain a little insight as to how the VC and the angel market works. I was able to understand their thinking. It may not be the same way I think. But you have to adapt."

Ortiz-McGhee stressed that being proactive about spreading the word is also vitally important. "What we tend to do as communities of color is preach to the choir," she says. "We talk to each other about great things that we're doing. And we are doing great things: We've got private equity firms that are doing multi-hundred-million-dollar deals, and in some cases billion plus dollar deals, that very few folks know about. It's not just incumbent on the communities and external folks to reach out to us. I think that we have to do a better job of reaching out as well."

Here in Northeast Ohio, we've taken steps to help recognize and connect minority entrepreneurs. In late April, we held the second-annual Charter One Launch100 Leadership Circle luncheon, where we honored nine more diverse companies having a positive impact on the regional economy. But that's just a start: So much of the groundwork for an inclusive entrepreneurial ecosystem involves understanding the talent that's walking around in your backyard and reaching out to leaders and organizations to start an enlightenment, awareness-building and educational process. As a result, we work closely with the regional chapters of the National Black MBA Association and National Society of Hispanic MBAs, among others, educating those groups on the ecosystem and the variety of roles that folks that are part of those organizations could and should play. Plus, we are connecting with national organizations such as the National Society of Black Engineers, the Society of Hispanic Professional Engineers and the American Association of Blacks in Energy, to name a few, to create awareness and connectivity around the opportunities and promising talent brewing right here in Northeast Ohio and in budding innovation ecosystems across the country.

When we do take these actions, good things happen, as Ortiz-McGhee notes. "When we get all of these different segments of our community fully reaching their potential, then we have -- by multiples -- increased the output of that community," she says. "When those different segments that are not fully currently engaged in contributing from an economic perspective to their communities, become fully engaged and have full access to the resources and opportunities and are able to contribute to making companies and their communities greater and stronger, that community thrives."

The country's population will be a majority-minority by the year 2043 -- and so it's vital for all Americans that we do consider inclusion an economic imperative if the U.S. is to remain competitive in an increasingly global economy. However, for those of us who may periodically question whether our own regional efforts to stress the importance of economic inclusion can truly make a difference, I leave you with the following quote from Margaret Mead: "Never underestimate the power of a small group of committed people to change the world. In fact, it is the only thing that ever has."