Building Black and Brown Businesses
Rick Wade, Senior Vice President of Strategic Alliances and Outreach at the U.S. Chamber of Commerce, joins Dr. Vanessa Weaver to discuss increasing the growth and success for minority-owned businesses in the United States. He talks in-depth about the effect the COVID-19 pandemic has had on Black and Latinx-owned businesses and how bolstering these businesses can help close the racial wealth gap.
In this Episode
· Addressing the racial wealth gap in the United States through business ownership
· Advancing policies to address income inequality between white-owned and minority-owned businesses
· How Rick Wade’s upbringing influenced his views about economic inequality
· The effect of COVID-19 on Black and Brown businesses
· How the U.S. Chamber of Commerce is taking the lead in addressing racial income equity
Follow Us on Social Media
Workin’ It Out
Diversity and Inclusion Television
Dr. Vanessa Weaver: I'm Dr. Vanessa Weaver. On this episode of Workin' It Out, we're shining a spotlight on the role of the US Chamber of Commerce on supporting and advancing Black and Brown businesses. And I am so excited today to be joined by Rick Wade. Rick is the Senior Vice President of Strategic Alliances and Outreach, at the US Chamber of Commerce. Welcome, Rick.
Rick Wade: Thank you, Dr. Weaver. It's always good to be with you. Look forward to the dialogue.
Weaver: Well, I look forward to continuing this dialogue that we have. As you know, you and I are also members of the Take on Race Coalition, that really is committed to eradicating racial disparities in Black and Brown communities of color. So I'm just ecstatic that you could give us this time today. So, Rick, this position you're in at the Chamber is I understand a new position. Can you tell us a little bit about how that position got developed and, then secondly, what is it that you do?
Wade: Yeah, so I'm Senior Vice President for what we call the Department of Strategic Alliances and Outreach. This is my fourth year at the Chamber.
Weaver: I can't believe it's four years.
Wade: I know, sometimes it feels like 40 years. But it's all about the world's largest business organization. How can we advance what I call 'inclusive growth?' How do we connect with the 8 million minority-owned enterprises in America? Economy, that's inclusive. That means creating opportunities for Black and Latinx and Asian American and Native American and all of the diverse businesses in America, to be a part of the Chamber's free enterprise movement, if you will. And it's an exciting new role. I think America has changed and so has the Chamber. We have the first woman president of the Chamber in this hundred-year organization. And while we have a long way to go, Dr. Weaver, I'm really proud of the progress we've made just in the last few years.
Weaver: Well I tell you, the word on the street is that you have just hit it out the park, in terms of the kind of innovation that you brought to this role. Can you share with us a couple of the programs that you've implemented?
Wade: Well, you know, when I first joined the Chamber of Commerce and as an executive, Suzanne Clark, our new president, we had a wonderful conversation. She says, "Rick, you know, we're a hundred-year institution we're right across from the White House, right in Lafayette Square." Literally a mile away was another hundred-year-old institution, Howard University. And we started this journey building a partnership with Howard University now extended to all of the historically Black colleges, called the Next Generation Business Partnership. It's a real investment in developing the next generation of Black and diverse business leaders, not just through internships, but entrepreneurship. How do we inspire them to be innovators and entrepreneurs? We're engaging faculty members in solving some of the complex problems facing business and industry.
So we started there and then after the, obviously the tragic murder of George Floyd, the private sector stood up in incredible ways. And so at the US Chamber of Commerce, we convene some 7,000 business leaders and stakeholders, not just around a conversation about racial inequality in America, but real solutions. And we launched a historic, what we call Equality of Opportunity Initiative, advancing not just policies, because a lot of our inequalities are rooted in policies. So we're working on Capitol Hill, introducing, working with members of Congress on legislation to close racial inequality gaps in America, in areas like education and entrepreneurship, criminal justice, health, and wealth. But the other part of it is, you know, there are things the private sector should be doing, independent of policy.
And so I'm proud of other initiatives that we've announced, for example, a Corporate Board Diversity Accelerator, where we've committed and working with the National Association of Corporate Directors, to identify, prepare, and connect 250 Black executives and others of color on corporate boards. We're working diligently to build a supplier diversity initiative to connect more Black and Latinx and other businesses to corporate supply chains. We're taking on tough issues like access to Capital, which is paramount. The number one issue facing the growth or lack of growth of Black businesses in America. We got to figure that out. So we have a lot of exciting initiatives, Dr. Weaver, and also again, advancing the policies that we need in government at the federal state and local level, through our state and local Chambers to strengthen and grow more opportunities for Black and other minority businesses in America.
Weaver: Well, Rick, when you talk about and describe what the Chamber's doing really driven by your leadership, I'm just curious about your, why. Why did you choose to take this job? You know, you were in the Obama administration as the Senior Advisor and Deputy Chief of Staff to the former Secretary of Commerce, Gary Locke, and you left that position to come into the Chamber. So how, what is your why?
Wade: Well, my why is kind of consistent with my why since I've been doing this work. I ain't got to give you my age but this has been my life's work, it really has. I kind of viewed this work to some extent as my own ministry. Because it is about addressing the inequalities, but I have a way, but now it's about addressing it from the economic challenges we face. I do believe, some say that the most significant issue defining in America is voting rights. That is an important issue, but I would also argue this is the wealth gap. It's the dividing division of our economy between haves and have nots.
And I've always believed growing up in rural South Carolina, growing up in a poor family and watching those of my peers and friends who have more means that we did, what that means. And so we got to address these underlying challenges that prevent us from having wealth. You think about Black households, for example, average net family wealth about 10 thousand dollars compared to a hundred thousand dollars for white families. And there's a lot in between there. And I think one of the solutions, Dr. Weaver, is creating more opportunities for Black businesses to create jobs and to be very important partners in the social organizational structure of our communities.
When I grew up in South Carolina, there was an area we called 'The Hill.' It was what we called our own version of Black Wall Street, where there were thriving Black businesses. The whole community was stronger because of those Black businesses. And just like we learned in Tulsa, in Greenwood, we got to go back and create these enterprises that can, again, not just create wealth and create jobs, but they're very, very important parts of the social fabric of our local communities. And that is the way I view the world.
Weaver: Thank you for sharing that insight with me and with our listeners, because as you know, we have a 'Did You Know?' segment for each part of our show where we kind of share some factoids. And when you were talking about Black wealth, we came across an interesting factoid, that I'd just like to get your perspective on. So the data shows that there are about 2.6 million Black-owned businesses and approximately four million Latin-owned companies in the United States. And for those Black companies, they're generating about $150 billion in revenue, which is really less than 1% of the $2 trillion gross revenues developed nationwide. And then for those Latin businesses, they generate 455 billion in annual receipts.
So, you know, when you first hear about the 2.6 million Black businesses and the fact that they're generating 150 billion dollars in revenues, that's sounds like a whole lot of money and a lot to be excited about, but then you can compare that with the Latinx community, which I indicated is generating 455 million. And even with both of those that it doesn't even touch the 2.1 trillion dollars in revenue that's generated by majority businesses. So can we ever catch up because that's already a big gap in the wealth creation?
Wade: Well, I hope we will, but if you look at the research, I mean, there's one piece of research that says that'll take 220 years for us to close these gaps, but we have to be deliberate and strategic in the policies we put forth. But all that you described is extremely important. The question is, how do we grow that revenue? How do we grow the impact at a time when the pandemic has disproportionately affected Black and Latin and other owned businesses? For example, the Institute for Economic Research reports that 41%, Dr. Weaver, 41% of Black businesses have already closed. That's unconscionable.
Weaver: As a result of COVID?
Wade: As a result of pandemic, because most of our 2.6 million Black-owned businesses are in the service, professional services industries and they're depending on consumers. And so, and they're small, one person quite frankly, or two employees. And so these companies that have been disproportionately impacted. We created in working with the Black Chamber of Commerce, the National Black Chamber, Walker's Legacy, which works with Black owned women, Black-women-owned businesses and others, what we call the Coalition to Back Black Businesses, supported by a 10-million-dollar grant from American Express and that's how we started. But the goal was to get immediate grants, not loans, because we learned from the PPP funding that those loans for a number of different reasons did not reach these populations. So the goal was-
Weaver: Where'd the money go if they didn't reach the populations?
Wade: You saw the narrative, I mean, it went to corporations that were majority, and quite frankly there are a lot of reasons they didn't get to it. There are a lot of Black businesses that didn't have the banking relationships. I think that the government could have done a better job on outreach at the beginning of the pandemic. So there are challenges there that we're trying to solve and working with SBA, Department of Commerce, and other agencies. But the bottom-line point is we got to fix this because you know, the old adage 'When there's a cold, Black people get the flu.'
Wade: Well that's because of the pandemic, so we even set further back. But this is something that we've been very targeted, getting funds to Black businesses, the kind of technical assistance, the education, the mentoring, and companies can do more in this place around supplier diversity. There's got to be opportunities for more Black businesses to do business with major corporations, and we're leading a big part of that at the US Chamber.
Weaver: Well, I was going to ask you, with this study that said it's going to take over 200 years for us to catch up, I mean what are the accelerants that are in play now to reduce that number, that gap of 220 years.
Wade: Well, as I mentioned earlier, I think some of the, to use the term accelerants, is some policy work. I mean, I do give credit, quite frankly, to President Biden and Susan Rice for making racial equity in such a prominent place in government policies, challenging the Department of Commerce and SBA and every agency to figure out what they can do to help solve these problems. So there's some policy prescriptions that need to be put in place, but again, there's some private sector work that we can do independent of policy. Access to capital, how do we open and unleash the capital, not just from traditional lending institutions like banks, but there's a role of private equity. Only 1-2% of private equity capital goes to Black founders, and that unconscionable.
So we have to be intentional, we have to be deliberate, and we have to view this as a everybody got to be a part of it type of challenge if we're going to solve it. For the benefit not just for the Black community, Latinx community, but for the benefit of America's economy. This is all about as well, America's economic competitiveness, to the extent that we strengthen these businesses and we strengthen our communities, America's economy wins. We have a partnership with the W.K. Kellogg Foundation around the business case for racial equity, and that basically says if we address these inequalities our GDP grows by 8 trillion dollars, and that has to be our compass and our guide as we do this work. The business case, we know the moral case is the right thing to do but our work is focused on the economic benefit to America and to our communities.
Weaver: So let me ask you, Rick, why does 8 trillion dollars, I mean what does that translate to, for the everyday Black or Latina person on the street. I mean, what does that mean?
Wade: Well I mean, it's a bigger economic pie, I mean, 8 trillion dollars is a lot of money in our government coffers and our economy that we all benefit from. I mean, give you one example again, I mean the Kellogg Reports talk about, we address the healthcare gaps, we'll have more well communities if we address the education gap and address the poverty. The number of schools in Black communities that are in impoverished districts are astonishing. But if we close those gaps, we invest in education in a very deliberate way, we now can create a more productive workforce. And think about the workforce in the future, where there has to be STEM. I mean, these are the kind of things that when you say who benefits from, we all benefit from. But we have to be intentional and have the political will and fortitude to take these issues on. Again, looking at the economic benefit. It's not about rob from Peter to pay Paul. Everybody wins. If we address these inequalities, we grow the pie 8 trillion dollars, the economy's stronger, and we all win.
Weaver: So it's not zero-sum game, because a lot of times people assume that when there are initiatives that target Black and Brown communities of color, that somebody else is losing.
Wade: That's right.
Weaver: And what you're saying is that we all gain.
Wade: We all win, we all gain.
Weaver: Okay. So let me ask you a question if I can, I know because this is so, first of all, I'm a business owner myself I'm really intrigued by this. Are there particular barriers that businesses of color, Black and Brown businesses of color, are there barriers that we present or we create that make it more challenging for us to be a critical part of this game?
Wade: Well, you know one of the things that I recognize is, I mean, whether we create or recreate the problem where the problem exist is that wide knowledge gap. And so we got to lean in and take advantage of the opportunity to learn business. For example, one of the things that I am a big proponent of is international trade. When I was at the Department of Commerce, I led trade missions around the world, but here's what I learned, and we don't think about this, Dr. Weaver, 95% of the world's consumers are outside of the United States, now-
Wade: 95%, so here's the deal, the old adage about why did the bank robber rob the bank? It's where the money was. So we got to go to where the customers are. But we don't understand international trade as we should. We don't understand how to do business in India and Africa and how to export and sell our products to those 95% of consumers. That is a big growth opportunity. We got to also understand that you got right here in the United States government, export import bank, who is trying to give money and lending to Black and minority businesses so they can sell their products abroad.
The Department of Commerce has what we call Foreign Commercial Services Officers and Embassies across the country, and their job is to take Dr. Weavers' company and help you get connected to markets in India, and China, and Asia, all across the world. So there's a knowledge gap that we have to fill but we got to be willing and be open to learning if we are to be competitive and we are to grow our businesses. So there is a responsibility on us as well, to be very intentional, and in the day of technology there's no reason why we can't find online all of these tools and resources to use to our advantage.
Weaver: Well, I remember you telling me, Rick, that the US Chamber of Commerce has over 3 million members.
Weaver: Am I correct with that number? And are those members committed through the Chamber to decreasing that knowledge gap? Are they willing to be coaches and sponsors, and educators of other businesses, like Black and Brown businesses who maybe simply don't even know that those opportunities exist?
Wade: Well, I mean I would say, yes certainly the Chamber is and again that is the work that I am leading. We do represent 3 million companies of every industry, size, sector and region in our economy. And again, we not going to solve it all overnight, you know, I just started a whole event series that does just that, trying to educate Black and Brown businesses on whether it's international trade or we don't even talk the space economy, That's a real thing. And we got to talk about all these emerging economies. And so yes, we are committed, and we need partners like you to give voice to these issues. And we need partners to be in our coalition. As I mentioned, I'm now working in a way that never happened before, with all of the diverse Chambers from the Hispanic, the Native American, all of them.
Weaver: The Black Chamber.
Wade: But we need everybody to be a part of this if we're going to move the needle.
Weaver: Well, Rick, I know that every, I can tell you every other week I'm getting some incredible information from your office about programs I need to tune into and ways to continue educating myself. How can people connect to you? I mean, how can they find out what your programs are? Where you are?
Wade: Well they certainly go to USChamber.com and just a vast array of resources, you know, we almost do almost 3,000 events a year and quite frankly I think that numbers increased during the pandemic because most of them are virtual but usually in any given year it could be over 25 hundred events but there's a lot of knowledge in those events. There's a lot of relationships that are extremely important by being connected to organizations like the US Chamber.
And let me also make clear you also have state and local Chambers, we all are a part of what we call the confederation. So get involved locally in your Chamber because the opportunity is right there in your community. Get involved in a state Chamber. Get involved in the National Chamber, the U.S. Chamber, and we have what's called the American Chambers of Commerce in 122 countries. So the network, Dr. Weaver, is just vast and I can't underestimate the power of relationships and doing business. People do business with people they know. And so that's one of those intangible variables that you just can't put a dollar on. And I've witnessed in my own company the opportunities to grow.
Weaver: You're talking about, and I know I'm jumping into this, because this relationship piece is so important, and we know that people do business with people that they know and that they trust. But when you think about, even as we think about the 2 million plus Black businesses, the majority of them are individual individuals, so how will they have time or how can they make time to stay connected with their local Chambers and form these relationships when most of them are the only ones that are keeping the doors open.
Wade: Well, I think you answered the question. It's one of these things you got to make time. You got to make the investment. Just as we invest in our business and our infrastructure, you got to invest in relationships. And that's as simple as I can define it. I think it's just one of those things that you got to do if you're going to grow and succeed.
Weaver: And it's sort of like a mindset shift in it because often times we think the relationship piece is the extra part of the business, it's not really cored to the business. And what I'm hearing you say is that cultivating these relationships that increase the amount of the people and your connections is critical to really growing your business in a substantial way.
Wade: Well, that's right, and I'll say parenthetically, it is building relationships with people who don't necessarily look like you or who may not even be in your business. I did an interview with a paper one time, and they said well, what's the importance of you building more stronger relations with Black businesses? Well I already have those; I need stronger relationships with white companies.
Weaver: Uh huh.
Wade: I need ties with companies in China and Asia and everywhere else. So it's a mindset. We have to view ourselves in these roles in order to be competitive and build a relationship. We got to think outside the box, get out of the boundaries, and get into the mainstream.
Weaver: If you were to tell Black and Brown businesses three things that they need to start doing Monday to enhance their profile or to generate more sales, what would be those three things you would tell them to do?
Wade: Well, on Monday?
Weaver: On Monday. So like, Vanessa, on Monday, you need to make sure you're registered with your local Chamber of Commerce and attend some of those meetings. I don't know what you would say are the top three things.
Wade: One thing, I mean, I would start is just do a sort of audit, and assessment, an audit of your own business. Are you making money? If not, why? Look at the technology component of your business because if you're not engaged in eCommerce everything is either technology driven or technology enabled and do an audit on that. And then I think the third thing is, as we've talked about, is re-evaluate your relationships, and your associations, and coalitions including the Chamber. Included in that, are you getting the knowledge? Are you building the knowledge assets you need to be competitive? And so there's a lot in those three things but that would be some directions I would give folk, because the assessment is important because the entire economy has been disrupted by this pandemic and we have to reimagine what the economy in the future is going to look like. So when I say do an assessment, then you really do need to look at the economy and look at the world and see where you fit in this new and emerging economy that's been impended by this pandemic.
Weaver: Well, I tell you, Rick, the Chamber selected the right person to expand its reach out to Black and Brown businesses and within such a short period of time you have made such transformative change in terms of educating, exposing, identifying what are policy and operational issues and I just wanted to just do a shout out and thank you for the commitment that you made. And you talk about your why, but I must tell everybody they'll know that when they get to know you even better, that you live your why each and every day. So thank you so much for being on our show today and sharing the perspectives of the U.S. Chamber of Commerce commitment to really developing and supporting and providing more exposure to Black and Brown businesses. We're so grateful to have you.
Wade: Well thank you and it's always good to be with you and thank you for giving a voice to these very important issues. Thank you.
Weaver: Well, you're welcome to come back anytime on our show.
Wade: I shall. Thank you.
Weaver: Well, this is Dr. Vanessa Weaver. It's the end of our show and I wish you a safe and productive week. And I like to say, 'A be happy week.' Goodbye.