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Inner-City Enterprise

Friday, November 28, 1997; Page A27
The Washington Post

A word of advice to those who advocate on behalf of the inner-city poor: Read last Monday's Wall Street Journal.

No, Michael E. Porter and Mark Blaxill don't offer any secrets as to how affirmative action might be salvaged. Their editorial page column doesn't provide hints as to ways to reduce white racism or increase the number of black elected officials.

These gentlemen, in fact, offer no advice to black Americans about anything. Their counsel is to America's retailers, who, they say, are missing a huge "growth frontier right in their own back yards -- America's inner cities."

Porter, a professor at Harvard Business School, and Blaxill, vice president of The Boston Consulting Group, estimate the national inner-city spending power as upward of $85 billion a year -- more than Mexico's entire retail market. And it's largely being ignored.

Listen: "Inner-city markets are attractive because they are large and densely populated. Despite lower household incomes, inner-city areas concentrate more buying power into a square mile than many affluent suburbs do. But they are badly underserved, often lacking the types of stores that inundate suburban areas -- supermarkets, department stores, apparel retailers, pharmacies and so forth."

To repeat: Porter and Blaxill's advice was not to black folk but to entrepreneurs. Thar's gold in them ghettos, waiting only the arrival of smart prospectors to dig it out.

And the question inner-city residents and their advocates ought to be asking is: Why aren't we digging?

Some of the answers are, by now, in the category of automatic reflex. We don't have the start-up capital, and white-owned banks won't lend us the money. Government assistance programs will give us just enough to fail. Black shoppers won't support black businesses.

All true, all difficult problems -- and all surmountable.

The true problem, I suspect, is deeper: long years of learning to see ourselves primarily as victims -- of exploitation, of disadvantage, of racism. If we are primarily victims, it follows that the primary duty of our advocates is to wage war against our victimizers.

And so our emphasis has been on distributional justice -- trying to make sure we get our fair share of what others produce -- rather than on opportunity to do a good deal more of the producing ourselves.

I heard a statistic several years ago that has stuck in my mind: Blacks have the lowest self-employment rate of all American minorities. At the time, the self-employment rate (which, of course, reflects business ownership) was a mere 3 percent in predominantly black Washington, D.C. (For non-Hispanic whites, the comparable rate was 16 percent; for D.C. Asians, just under 20 percent.)

The authors of the Wall Street Journal piece do not ignore the difficulties entrepreneurs face in the inner cities, including theft, the threat of robbery, oppressive governmental regulation, local resistance. But, though they do not say so because it isn't their point, all of these problems should be less a challenge for black entrepreneurs than for white businesses (I think) the writers have in mind.

And to the extent that inner-city businesses mean inner-city jobs, local organizations and local governments could help alleviate many of the problems.

Blaxill and Porter, by the way, are not talking mom-and-pop enterprises. They talk about the success of mammoth businesses: Sears in East Los Angeles, Costco in Brooklyn, Stop & Shop in Boston's South Bay. Obviously, businesses of similar size may be out of reach (at first) for most black entrepreneurs. The trouble is, too few are starting even at a more modest scale.

Let me be clear. I'm not suggesting that black organizations give up on distributive justice -- only that they also learn to see what every other minority in America sees with crystal clarity: America, its flaws notwithstanding, is a land of opportunity.

Moreover, it's hard to think of a major social problem facing black America that wouldn't be greatly relieved by the presence of flourishing inner-city businesses.

"America's inner cities," Blaxill and Porter conclude, "are the next retailing frontier, and they are growing right in our own back yard."

Whose back yard?

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