Chicagoland: How Competitive Collaboration and Political Advocacy Makes "The City of Broad Shoulders" a Model for Growing Black Business

By Wade Talbert, Marcia | Black Enterprise, October 2012 | Go to article overview

Chicagoland: How Competitive Collaboration and Political Advocacy Makes "The City of Broad Shoulders" a Model for Growing Black Business


Wade Talbert, Marcia, Black Enterprise


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CHICAGO HAS A LONG WAY TO GO BEFORE IT CAN BE CONSIDERED a bastion of black success. Chicago's annual black unemployment rate was more than 19% in 2011 (the third-highest rate in the nation), compared with 9.8% for the city as a whole. Small black businesses in Chicago are also haunted by a lack of access to capital and a disloyal black consumer base. According to a 2007 analysis of consumer market information, residents of black communities in Chicago spend an estimated 64% of their consumer dollars--more than $5.3 billion a year--outside of their neighborhoods, reports The Chicago Reporter.

Furthermore, while 32.9% of the population is black and 22.9% of businesses are black-owned, only 8%, or $96.9 million, of the City of Chicago's contracts went to black-owned companies from January 2011 to August 2011. (This number does not include contracts that were awarded by entities such as the city's transportation, schools, and parks authorities, among others.) Despite this, Chicago is home to 16 BE 100s companies, more than New York--where the population density is nearly triple the size of Chicago--and equal to Atlanta, a city that has held a black mayor in office since 1973. Known throughout the country as Black Metropolis, Chicago is a place where politics and business go hand in hand and where black entrepreneurs bankroll black candidates at the highest levels--resulting in the city's first black mayor in 1983. Additionally, three of the only six blacks to ever hold a seat in the Senate have connections to Chicago, one of whom was the first black female U.S. Senator and another who became the first African American president of the United States.

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And while some of the business statistics may be lackluster, Chicago can still be considered a model for cities nationwide on how to build black businesses of scale, as virtually all other metropolitan areas with large black populations struggle to meet the degree of success that Chicagoans have enjoyed.

A Proud Legacy

Whether you're talking about the Great Migration or the First Migration (when a black man, Jean Baptiste Point Du Sable, Chicago's founding father, opened a trading post near Lake Michigan to sell canoes, food, and fur in 1779), Chicago has from its very onset been the kind of town where pioneering black people with an entrepreneurial spirit went to make history. The "Second City" has gone on to produce first-class talent and world-renown products that have become household names, such as John H. Johnson and Ebony and Jet magazines; Oprah Winfrey and Harpo Inc.; John Rogers and Ariel Investments LLC.; and Judge H. Parker and the Parker House Sausage Co.

In fact, in 1983, a group of Chicago business families led by SoftSheen haircare magnates Ed and BettiAnn Gardner, along with the elite Johnson business men--Ebony's John Johnson; Johnson Products Co. founder George Johnson; and the first black GM dealer, Al Johnson (no relation)--used their fortunes to fund a registration drive that signed up 250,000 new voters. It was enough to convince the late Mayor Harold Washington to run for office.

Washington, the city's first black mayor, in turn showed his gratitude. In 1985, he established a goal to award at least 25% of the annual dollar value of all city contracts to qualified minority business enterprises (MBEs). The City of Chicago's minority business program got its tooting from his administration, says Shelia Hill Morgan, president of the Chicago Supplier Development Council, which speaks out on behalf of small- and medium-sized minority businesses, and pushes to raise the bar for participation and access in contracting. When it came to doing business with the city, especially when it came to bond offerings, Washington was very explicit about the inclusion of minority firms, explains Mellody Hobson, president of Ariel Investments.

Ready and Able

That inclination for business leaders to collaborate with politicians became the foundation of organizations such as the Alliance of Business Leaders & Entrepreneurs (ABLE), says Quintin E. …

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