The National Urban League's annual "State of Black America" reports, always fascinating, lay out the factual basis behind long-standing perceptions of Blacks' disadvantaged status in this country. The numbers don't lie. Social agencies, government officials, community leaders and educators everywhere use the Urban League's analysis to set their own marching orders, and commentators pick up the beat in newspapers, magazines, and broadcasts across the land.
But a lesser-known document, the federal Minority Business Development Agency (MBDA) "State of Minority Business" report, puts forth a gauge that cannot be denied: The business of America is business, but the share taken home by all minorities is a pitifully small 3.2 percent of the annual corporate gross receipts. For Blacks, it is smaller still: While Blacks make up 12.7 percent of the total population, Black-owned firms represent only 4 percent of the nation's companies. Their percentage of the annual gross receipts is smaller by a factor of 10: 0.4 percent.
Disadvantaged? The numbers don't lie, and the federal business analysts say the big job of moving Blacks and other minorities upward on the entrepreneurial earning curve is too important to leave to vagaries of the market:
America's entrepreneurs play a vital role in the stability and prosperity of our national economy. They take the risks necessary to create wealth and jobs, develop innovative products, and introduce new business practices into the marketplace. This importance extends beyond America's borders, as U.S. firms significantly impact and contribute to the world economy. Given the ongoing U.S. demographic changes, it is critical that we use the entrepreneurial talent available in all of our communities to maintain a growing national economy. The 1997 "Survey of Minority Owned Business Enterprises" (SMOBE) report, based on the agency's most recent figures, suggests that minority businesses have dramatically increased their participation in the domestic free enterprise system and are a critical component of the U.S. business community. However, there remain significant disparities between minority and nonminority firms. We must invest more aggressively in the continued growth of minority business.
A 'Talent Imperative'
Looking at it from another direction, the public-private partnership BEST (Building Engineering and Science Talent), in its "Talent Imperative" report, asked:
What if America's engine of growth runs out of fuel? It runs on the brain power of our brightest engineers, scientists, and advanced-degree technologists, a mere 5 percent of America's 132-million-person work force. But what an engine they stoke. In the last 50 years, more than half of America's sustained economic growth has come from this fantastic five percent. From microwave ovens to microchips embedded in handheld computers and mobile telephones, from curing polio to eventually curing cancers, innovation has made our lives richer, more productive, and more promising.
And we don't mean only culturally richer, we mean bottom-line richer in a variety of ways:
* Ownership, power and profit reside with the innovators. Hence, for instance, the wealth created by the innovators of CDMA mobile phone technology is enjoyed throughout San Diego County where the innovators, their employees and their families live.
* Innovators create demand, markets, jobs and income at all levels. Hence, the inventors of wireless technologies not only create more well-paid innovation jobs (in research and development) and good-paying manufacturing jobs, but have you noticed the proliferation of entry-level jobs at kiosks in every mall in America?
* * *
But what happens if "America's engine of growth," our ability to create technologies and scientific breakthroughs, begins to sputter? By 2010, will the offshore migration of computer innovation and semiconductor manufacturing, already underway today, weaken America's national defense by limiting access to the world's most advanced microelectronics and nanotechnology? By 2015, if we fall behind in these and other leading-edge technologies, will America's former edge in the world economy be so dulled that average families can no longer afford the American dream?
We face these risks because we're not developing the human capital to meet the country's future needs.
* * *
Thus, with this edition, US Black Engineer & Information Technology magazine, the premier publication for Blacks in technology, begins a new approach to coverage of the situation, aspirations, needs and problems of the Black technology entrepreneur. The numbers say that the job of moving Blacks out of their disadvantaged status cannot be accomplished unless and until Black-owned businesses -- especially wealth-creating technology businesses -- move out into the mainstream of America's market economy. And the numbers don't lie.
* * *
50 World-Beaters
Black-Owned Technology Companies Compete on Quality, Service
A Sample Shows the Potential for Building Community Wealth
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| Rodney P. Hunt, President and CEO RS Information Systems, Inc. |
Rodney Hunt has a point to make about support for minority business. Getting help from "foot in the door" efforts such as the Small Business Administration's 8(a) set-aside program is important, but if minority entrepreneurs are really going to join the mainstream, the next step is a huge one. Hunt, a USBE&IT Black Engineer of the Year for entrepreneurship whose Virginia-based company, RSIS, started out with a $5,000 contract under the 8(a) program and graduated to earnings of more than $260 million a year by 2003, was a major participant in the Commerce Department's Information Technology Solutions (COMMITS) program, under which the department made it possible for minority entrepreneurs to get government contracts for as much as $1.5 billion worth of work. RSIS, founded in 1992 by Hunt and his partner/cofounder Scott Amey, has won contracts for more than $500 million worth of work for several federal departments: Commerce, Energy, Defense, the EPA, and Homeland Security.
RSIS won contracts from the Army Test and Evaluation Command for IT support, the Federal Aviation Administration, and a laundry list of agencies. But the COMMITS contract had a ceiling for participants: 1,500 employees total, or else go compete with the big boys. But RSIS has grown to more than 2,000 employees, and it graduated from 8(a) last year.
"I believe that the SBA's programs for small and disadvantaged businesses are intended to assist companies become competitive and viable business enterprises for the long-term," Hunt said in a 2003 Washington Technology interview. "To that end, the SBA should always be a repository of help and assistance for companies to grow. Unfortunately, there is a void in our particular market segment, which is the mid-tier systems integrator or support services contractor. What this means is that once a company reaches 1,500 employees, it now must compete with the large company primes for business. I hope one day the SBA and requiring agencies recognize this void to further allow such companies to grow to be large primes."
That is, even a multimillion-dollar success story like RSIS needs help to climb into the ring with billion-dollar giants.
Fast-Moving Competitors
And Hunt isn't just whistling in the wind. By the time his company graduated from SBA 8(a) status, only 18 percent of its revenues were coming from participation in the program. He was already competing on a high level. That's why Washington Technology named RSIS one of its "Fast 50" contractors, judging by revenue growth from 1998 to 2003. To other technology entrepreneurs, Hunt has a few words of advice: Stay with your core competencies.
"Recognizing the change in dynamic associated with the various plateaus of business success is critical to continued growth," he said in an online forum. "Any successful firm must possess the fundamental elements of a good plan, talented, committed staff, commitment to customer satisfaction, financial capacity and the support of infrastructure. The key is to employ the appropriate processes/procedures at the right time to support the growth of the company without losing your ability to be responsive. This could mean organizational assessment, staff augmentation and corporate business approach as it relates to an entrepreneur's vision and mission. A firm's ability to be flexible and willingness to adapt to changing market conditions is critical as you go through the growth curve."
IT is not the only area in which Black-owned firms are competing at high levels and spreading the wealth. CAMAC Holdings Inc. is a Houston, Texas, company whose activities in oil and gas exploration, production and refining, and energy trading bring in an estimated $1 billion in annual revenues. Its chairman and CEO, Kase Lawal, has sat on the U.S. Trade Advisory Committee on Africa and is chairman of Allied Energy Corporation, an independent oil and gas company. The Texas Southern University graduate and Prairie View A&M University M.B.A. studied chemical engineering at Georgia Tech and has set up a $1-million endowment at Texas Southern, as well as a $600,000 petroleum engineering endowment at the University of Houston.
Sounds of Rebirth
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| Kenneth Gamble, Chairman and CEO Universal Companies |
Kenneth Gamble is a music entrepreneur. He founded his Universal Companies 10 years ago, after spending $10 million of his own money to redevelop the South Philadelphia neighborhood in which he grew up, using cash he earned writing the songs that made "The Sound of Philadelphia" famous and propelled singers like the O'Jays, Phyllis Hyman, Billy Paul, the Delfonics, the Intruders, and Teddy Pendergrass to stardom. He wrote songs for the Jackson Five, Jerry Butler, Nancy Wilson, Lou Rawls, and many others -- three thousand in all -- and his 170 gold and platinum records include the Grammy Award-winning "Me and Mrs. Jones" and "If You Don't Know Me by Now."
The multimillionaire Gamble moved back to his old neighborhood, appalled at the decay and privation. He began with a typical not-for-profit, building houses and redeveloping rental properties, but he concluded that was not enough. If redevelopment was really to take hold, human capital redevelopment was paramount. Universal Companies had to be entrepreneurial. The outfit that started out as Universal Community Homes has added job training and job development, family counseling, health, and an incubator that not only helps write business plans, it does SBA Minority Pre-Qualification of budding entrepreneurs. Its current housing initiative, a 400-unit redevelopment plan, drew $100 million in Fannie Mae backing.
In 2002, as Philadelphia agonized through a state takeover and part-privatization of city schools, Gamble's firm became an Education Management Organization and took over three public schools. Universal Companies manages them, with its already running charter school, as the Universal Family of Schools.
Gamble had already become a player in adult education. Under contracts with state and local government agencies, Universal Companies provides adult basic education, computer skills education, preparation for hotel-motel work and culinary arts, and operated a telecommunications training program under grants from Verizon and other phone companies. A community technology transfer program, an effort in which this writer participated, put computer labs in neighborhood centers and installed a point-to-point microwave link to provide Internet service so adults, once totally underexposed to computer networks, could learn new skills.
Now, challenged to upgrade two inner-city middle schools and an elementary school housed in a 1925 building lacking modern amenities, Universal Companies put a committed corps of educators and volunteers to work. The result: The most recent reports of federally mandated Terra Nova testing for all students shows that Universal's schools made the most dramatic improvement in the city.
Dialing Dollars In
Former IBM engineer Eddie Brown works on the other end of entrepreneurship, building the capital to go forward. Brown Capital Management, 100 percent minority-owned, manages some $5.5 billion in assets through four equity investment services:
* Large/Mid-Capitalization;
* Mid-Capitalization;
* Small Company; and
* International
In addition, Brown Capital manages five mutual funds: Balanced, Equity, Mid-Cap, Small Company, and International Equity. Brown launched the Baltimore company in 1983 to provide investment management services to regionally based, small to medium-sized clients. One of its earliest hallmarks was its ability to include small, successful companies in its large/mid portfolios, and in time it led to the Small Company Service it runs today. Brown describes it as "identifying exceptional small companies with the wherewithal to become exceptional large companies."
Last year, Brown was voted Ernst & Young's Entrepreneur of the Year in financial services for the state of Maryland. Without financiers like Brown Capital, few entrepreneurs could imagine growing as large as Rodney Hunt's RSIS.
Some, however, already have. William F. Pickard began his Detroit business more than 25 years ago, and now his Global Automotive Alliance, LLC operates eight auto plants in Alabama, Georgia, Michigan, and Canada, employing some 2,000 people making car parts. Sales have reached $230 million.
In addition, Pickard sits on the Federal Home Loan Bank Board and has sat on the National Advisory Committee on Trade Policy Negotiations. He also sits on the boards of the Standard Federal Bank, the Detroit Renaissance organization, the Detroit Investment Fund, and was first chairman of the federally supported African Development Fund.
A Diverse Thrust
Surveying the field, it is clear that Black technology entrepreneurs are working in all areas, from thermoplastic molding to auto parts fabrication and assembly to IT engineering to wireless communications providers. Blacks have long been associated with cookery, but now entrepreneurs have moved into manufacturing-scale food processing and beauty products production, even the design and production of packaging products.
Joseph B. Anderson Jr., a West Point graduate who led 1st Cavalry troops in Vietnam and was later immortalized in the acclaimed documentary "The Anderson Platoon," once ran Inland Fisher Guide, with 7,000 workers and revenues of $1 billion making body parts for GM. A runner-up Black Engineer of the Year in 1991, Anderson now is chairman and CEO of TAG Holdings, which owns controlling interests in several manufacturing and service enterprises, such as Vibration Control Technologies, a maker of torsion vibration dampers; A&D Technologies, a Korea-based maker of temperature sensors; and North American Assemblies, a provider of assembly and supply-chain management services.
The list goes on, but the exemplars described here speak for the company of entrepreneurs: The whole community gets richer when companies like these grow.
Garland L. Thompson can be reached at GThompson@ccgmag.com.
USBE&IT's Top Entrepreneurs for 2004
Jeanette M. Abraham
President and CEO
Detroit Heading, LLC
http://www.detroitheading.com
Eric A. Adolphe, Esq.
Founder, President and CEO
Optimus Corporation
http://www.optimuscorp.com
Joseph B. Anderson Jr.
Chairman and CEO
TAG Holdings, LLC
http://www.taghold.com
Lt. Gen. Joe N. Ballard, U.S. Army (Ret.)
President and CEO
The Ravens Group
http://www.theravensgroup.com
Dave Bing
Chairman and CEO
The Bing Group
http://www.binggroup.com
Maj. Gen Roger R. Blunt (Ret.)
Chairman and CEO
Essex Construction, LLC
http://www.essex-llc.com
Bernard Bronner
President and CEO
Bronner Bros.
http://www.bronnerbros.com
Eddie C. Brown
President and Portfolio Manager/Analyst
Brown Capital Management, Inc.
http://www.browncapital.com
Dr. Lawrence Crawford
President and CEO
DBM Technologies LLC
http://www.dbmtech.net
Don Cunningham
Owner
OEM/Erie, Inc.
http://www.oemerie.com
Robert C. Davidson Jr.
Chairman and CEO
Surface Protection Industries, Inc.
Ph: 323.265.9999
Gerald D. Edwards
President and CEO
Engineered Plastic Products, Inc.
http://www.eppmfg.com
Joseph E. Fergus
President and CEO
Communication Technologies, Inc.
http://www.comtechnologies.com
Kathryn B. Freeland
CEO
RGII Technologies, Inc.
http://www.rg2.com
Kenneth Gamble
Chairman and CEO
Universal Companies
http://www.universalcompanies.org
James F. Garrett
President and CEO
SENTEL Corporation
http://www.sentel.com
Andre Gist
President
Manufacturers Industrial Group, LLC
http://www.migllc.com
Carlton L. Highsmith
President and CEO
The Specialized Packaging Group, Inc.
http://www.spgroup-inc.com
Darryl K. Horne, P.E.
President and CEO
Horne Engineering Services
http://www.horne.com
Raymond A. Huger
President and CEO
Paradigm Solutions Corporation
http://www.paradigmsolutionscorp.com
Rodney P. Hunt
President and CEO
RS Information Systems, Inc.
http://www.rsis.com
Maria Jackson
President
Maricom Systems Inc.
http://www.maricom.com
Renard U. Johnson
CEO
Management & Engineering Technologies International, Inc.
http://www.meticorp.com
Willie F. Johnson
Principal and Chairman
PRWT Services, Inc.
http://www.prwt.com
Dr. Horace F. Jones
President
Advanced Resource Technologies, Inc.
http://www.team-arti.com
Clyde Jupiter
Founder and Chair
Jupiter Corporation
http://www.jupitercorp.com
Kase L. Lawal
Chairman and CEO
CAMAC Holdings Inc.
http://www.camacholdings.com
Gregory Liautaud
Owner
Capsonic Group LLC
http://www.capsonic.com
Gen. Lester L. Lyles, U.S. Air Force (Ret.)
CEO
The Lyles Group
André Lynch
CEO
Ingenium Corporation
http://www.ingeniumcorp.com
Napoleon McCallum
Owner
Digital Pro Graphics
http://www.digitalprographics.com
Larry C. McCrae
President
Larry C. McCrae Inc.
Ph: 215.227.5060
Tracy Mitchell
President and CEO
The Arbeit Group
http://www.thearbeitgroup.com
William F. Pickard
Chairman and CEO
Global Automotive Alliance LLC
http://www.vitec-usa.com
Marmon Powers Jr.
President and CEO
Powers & Sons Construction Co., Inc.
http://www.powersandsons.net
Francis L. Price
CEO
Q3 Industries
http://www.q3inds.com
Roderick K. Rickman
President and CEO
MPS Group Inc.
http://www.mpsgrp.com
Michael Russell
CEO
H.J. Russell & Company
http://www.hjrussell.com
Rory Sanderson
President and CEO
Sanderson Industries Inc.
Ph: 678.623.180
Gale Sayers
CEO
Sayers
http://www.sayers.com
Dumas M. Siméus
Chairman and CEO
Siméus Foods International, Inc.
http://www.simeusfoods.com
Earl W. Stafford
Chairman and CEO
UNITECH
http://www.unitech1.com
John Stallworth
President and CEO
Madison Research Corporation
http://www.madisonresearch.com
David Steward
Chairman of the Board
World Wide Technology, Inc.
http://www.wwt.com
Sid E. Taylor
CEO
SET Enterprises Inc.
http://www.setenterprises.com
Ronald L. Thompson
Chairman and CEO
Midwest Stamping Inc.
http://www.mwscorp.com
Maurice B. Tosé
Chairman, President and CEO
TeleCommunication Systems, Inc.
http://www.telecomsys.com
Kathryn C. Turner
Chairman and CEO
Standard Technology, Inc.
http://www.stic2.com
Leon E. Tupper
President and CEO
Gilreath Manufacturing, Inc.
http://www.gilreathmfg.com
Houston L. Williams
Chairman and CEO
PNS, Inc.
http://www.pnsonline.com
Patricia Williams
President and CEO
Omega Technologies, Inc.
http://www.omega-its.com
Garland O. Williamson
President and CEO
Information Control Systems Corporation
Ph: 410.752.1934
Joe Wilson
Chairman and CEO
Integrated Packaging Corporation
http://www.ipcboxes.com
Albert Woodward
CEO
Business Computer Applications, Inc.
Ph: 770.279.9774
Russell T. Wright
Chairman and CEO
Dimensions International, Inc.
http://www.dimen-intl.com
To read more about USBE Top Technology Entrepreneurs: Leading the Way see USBE Top Technology Entrepreneurs: Leading the Way in the USBE News archive.
