Mike Green, co-founder of ScaleUp Partners, is working with Forward Cities, a multi-city learning collaborative comprised of four US cities (Durham, Detroit, New Orleans and Cleveland) to help develop inclusive local economies where small businesses can thrive. The following guest article is about one of those cities. Keep an eye out for future articles covering the other cities.
The future of America could look a lot like Durham, North Carolina. This mid-sized city’s evolving economic infrastructure may hold key lessons for similarly situated metros and the nation writ large. Durham has a diverse population of 263,000, with a minority majority racial demographic breakdown. It is home to renowned institutions of higher education: Duke University and North Carolina Central University, one of the top historically black universities in the nation. Durham is also part of an internationally recognized cluster of corporate innovation known as Research Triangle Park.
A History of Entrepreneurship
Like America, Durham has benefited from a long history of successful entrepreneurship while traversing a troubled past that left much of its once-flourishing black population segregated, disconnected and isolated from the most promising economic resources and assets in the region. Like America, Durham suffers today from unresolved issues of a segregated century that, absent intentional intervention, offer little hope of organic resolution.
However, the “Bull City” today is determined to break free from the grip of its partitioned past and build a more inclusive economic environment. The fuel driving the City’s economic imperative is entrepreneurship, the same bedrock upon which the city built an early economic footprint that attracted national attention.
Durham’s past holds significant lessons for its future. A culture of entrepreneurship built a thriving, though highly segregated, black community in downtown Durham known as “Black Wall Street” during decades ranging from the late 1800s to the aftermath of WWII. When IBM arrived, the company provided further opportunity for Durham’s black community to be included in the economic prosperity of the city.
Farad Ali, Director of the Institute of Minority Economic Development shares his family’s history with IBM:
My grandmother, who spent 35 years in the community, knew everybody. They transferred her skills and she became the mail clerk at IBM. They hired my aunt, who was entrepreneurial and innovative. She became part of the manufacturing line and created a change in the manufacturing to engage with computers. IBM capitalized on the net present value of that creation and rewarded her with $300,000 … in the 1970s. That changed her life. She bought a home. My cousins all went to college.”
Durham today is experiencing a significant renaissance from the devastating loss of mid-20th century tobacco and textiles manufacturing. As Durham rebuilds its local economy, can it reconnect to its historical foundation of entrepreneurship, yet create a new 21st century economic narrative grounded in inclusive innovation? And what role do corporations, business leaders, foundations, higher education, local and regional governments play in the development of Durham’s future as an inclusive economic environment?
“I think all the pieces are there,” said Micah Gilmer, co-founder of Frontline Solutions (headquartered in American Underground). “The challenge is: One: how do we get the city and county at the table in a way that’s proactive and valuable? Two: the trust that’s eroded over the past 10 years or so is an issue I think is going to be critical.”
Fortunately, the City of Durham and Durham County are committed to developing a joint economic strategic plan that emphasizes inclusion. The City has just filled a key economic development role with Andre Pettigrew, a veteran economic development professional with a history of inclusion efforts. The County is now looking to fill a similar open position. These leaders will be critical to helping cultivate and nurture diverse local talent and diversifying Durham’s growing startup culture for community-based small businesses as well as tech-based scalable enterprises.
The city and region are ripe with essential elements needed to build a robust knowledge-based, tech-driven innovation economy. Duke University, North Carolina Central University, Research Triangle Park, Self Help Credit Union and start-up hub American Underground and others represent a hub of core resources around which emerging entrepreneurship nodes in diverse communities can connect.
KEY TO ECONOMIC SUCCESS
Durham’s 40 percent black population is key to development of a new economic strategy for shared prosperity in the city and region. The historic memory of a once-vibrant entrepreneurial community, replete with thriving local businesses, is preserved in monuments, plaques and pictures around the city. On a national scale, black entrepreneurs have long represented one of America’s fastest-growing sectors of entrepreneurship. Yet, local planners in Durham inherited a process that is missing crucial data on the current economic productivity of minority communities.
Moreover, there is a dearth of diverse entrepreneurial talent being cultivated in the education pipeline, which translates into untapped talent; and Durham still needs to develop an active community of investment resources that are vital arteries in the lifeblood of existing small businesses and the growth of startup ventures. Durham is now starting to address these problems. American Underground is a growing community of companies with qualified and willing entrepreneurship mentors located in central.
Doug Speight, the Code 2040 Entrepreneur-in-Residence at American Underground, explains:
My family is from three generations of entrepreneurs in this city going back to 1938. My grandfather, who launched his first company in 1938, was part of Durham’s Black Wall Street and those organizations that were geared around black and brown entrepreneurship and supported the black community. I’m an HBCU product. I moved away to North Carolina A&T for engineering and started my first startup right out of college. I had clients like Procter and Gamble and Miller Brewing Company and did very well in that business. I sold it and got involved in technology and entrepreneurship at the institutional level, teaching faculty and grad students how to launch companies and get them funded.
I came back to A&T to start their office in tech transfer. I also worked in technology and commercialization for NASA and the Department of Energy, and most recently I moved my for-profit startup back here because there’s no better place to launch it.
INCLUSIVE DRIVERS AND KEY STAKEHOLDERS
Through Forward Cities and the Durham's Neighborhood Compass Program, the city has identified a number of leading local organizations and individuals whose institutional knowledge and local cultural competency help guide smart investments into efforts that are working. The city is now trying to open pathways for new investments needed to develop vital economic infrastructure, which exists in some areas but not others. Financing for residential and small businesses is a key component in Durham’s approach.
The Center for Community Self-Help (Self-Help) is a local Community Development Fund that invests in affordable housing and local businesses, serving as a vital resource for developing a sustainable community environment in which small businesses can thrive. Here's one example:
Silvana Rangel of Durham, NC has always been passionate about healthy food. When she launched her catering business Soul Cocina in 2015, she focused on wholesome, plant-based foods like her top-selling vegan tamales. Last year, she came to Self-Help for a small loan to expand into her first physical location.
Two other Self-Help investments of note include a farmer-owned food hub and a neighborhood cooperative grocery, which "work symbiotically to create a sustainable food system."
Assisting in guiding the vision of Self-Help are Communities in Partnership, Helius Foundation, DEEP (affordable housing) and local community organizers who provide an honest and often critical perspective. North Carolina Central and Duke also play critical roles in galvanizing people and resources.
Development of the minority-owned small business community is critical in the area of Northeast Central Durham, which is adjacent to downtown and can potentially serve as an economic bridge between a community with justifiable fears of gentrification and the growing corridor of entrepreneurial innovation and business productivity in downtown Durham.
The Northeast Central Durham Entrepreneur Initiative (NECDEI) plays an important role in improving small business productivity and job growth in a community that is representative of the strength of innovation efforts in Durham’s black population. Its mission is “to increase the number of successful black and Latino owned enterprises in NE Central Durham , where success is defined as the owners and employees of these businesses all being able to earn a fair living wage.”
Seventy-five percent of the residents of northeast central Durham are renters. And, as rents rise along with property values, they are at risk of being displaced. The development of business owners who live in and service the local community’s needs can potentially ward off the encroaching trend of gentrification.
Through four member organizations, led by Communities in Partnership (CIP), NECDEI works to provide access to resources and relationships to emerging entrepreneurs of color and minority small business owners in the community. The four groups work together to stabilize existing businesses, establish new black and Latino businesses throughout the corridor, and increase investment potential in order to bring in capital from outside the community.
Connell Green is a prime example of the economic gardening occurring in Northeast Central Durham. Green was involved in a tragic accident that left him a quadriplegic. He lost his family and eventually became homeless. His disability checks helped him secure low-cost housing. Green started mixing dough as part of his recovery exercise routine, and soon began making cookies. Positive feedback from locals led him to approach the Helius Foundation for help in launching a business.
Green recently received a micro loan from Helius that helped him land and successfully deliver on a major catering contract. Geraud Staton, Executive Director of Helius Foundation said he’s been inspired by the entrepreneurial talent that’s emerged from one of Durham’s poorest communities. Helius is currently assisting another resident with research and development of a technology invention that’s quite a pivot from his day job.
“We have a client who is a landscaper,” Staton said. “He recently came to us with an idea for wearable technology. It’s a cooling suit to wear on hot days and lower the temperature around the body 10 to 15 degrees.”
Inevitably, Durham will need to find ways to overcome 20th century deficits that deprived targeted demographic groups of economic opportunity. These communities today remain disconnected from the region’s best economic assets and resources.
Durham’s elevated awareness of its existing and emerging diverse entrepreneurial talent, resources and opportunity, coupled with the city’s introduction of a new economic development leader, offer hope for a more inclusive economic future. By fostering more entrepreneurial activity within currently under-represented communities like NE Central Durham and connecting it to downtown, there is a path forward in which the city’s entrepreneurial ecosystem is closer to being demographically representative.
With the presence of top-notch local universities and cultivation of inherent entrepreneurial talent in its local population, Durham’s small business community is poised to grow and perhaps become the nation’s first truly inclusive innovation ecosystem, which represents a promise of what America could be in the not too distant future.
(Top photo by James Wilamor)
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About the author
Mike Green is co-founder of ScaleUp Partners, a leading national consultancy specializing in economic strategies to build inclusive and competitive local economies, and strengthen community communications around issues of economic inclusion.