Written by Christopher Gergen, CEO of Forward Cities: This June, 220 city and community leaders from 25 cities came to Durham, NC for a conversation about inclusive innovation and economic development. It marked an important moment. It was the first national conference hosted by Forward Cities since merging with CEOs for Cities and sent a clear message: economic inclusion and shared prosperity are critical to our future. In the first full day of conversation, during a panel conversation with Mayor Schewel of Durham and Mayor White of Greenville, Betty Cruz from All for All in Pittsburgh stood up and put forward a challenge. When talking about economic inclusion we risk being too polite.

She’s right. The reason there is a growing wealth gap between predominantly white communities of privilege and predominantly under-connected communities of color, is that we haven’t truly tackled generations of systemic racism. This is not about treating everyone equally but insuring there is true equity of opportunity. We are not even close to this goal right now.

An article “What We Get Wrong About Closing the Racial Wealth Gap” from the Samuel Dubois Cook Center on Social Equity at Duke University and the Insight Center for Community Economic Development demonstrates why we are not going to make any progress on closing the wealth gap “if the structural sources of racial inequality remain unchanged.”

White households with bachelor’s or post-graduate degrees, for example, are more than three times as wealthy as black households with the same degree attainment. Whites owning homes have nearly $140,000 more in net worth than black home-owners. Furthermore, 72 percent of whites own homes while only 42 percent of black households do (a significant result of racist housing policies like redlining and discriminatory lending practices).

The same discrepancies plague the commercial sector. According to the Association for Enterprise Opportunity, there are 2.58 million black-owned businesses in the United States with total revenue of $150 billion in revenue (about 1.3 percent of U.S. sales). Latino-led businesses have four percent of U.S. sales and 4.2 percent of U.S. employment. Of these companies, the most recent US Census Bureau Survey of Business Owners shows that 90 percent of black and Latino owned companies are run by sole proprietors and, of these companies, almost 70 percent of them make less than
$25,000.

By contrast, the 19 million white-owned businesses have 88 percent of the overall sales control 86.5 percent of U.S. employment. For a country that is expected to be majority minority in the next 25 years, this is an untenable situation. As Johnathan Holifield, the Forward Cities’ keynote speaker and author of The Future Economy and Inclusive Competitiveness, writes, “America cannot reach her highest economic competitiveness goals if so much of her population contributes so little.”

This is the fundamental charge for our future economy – one that is competitive through inclusion not in spite of it. In a study called The Color of Entrepreneurship it is estimated that if “if the number of people-of-color firms were proportional to their distribution in the labor force, people of color would own 1.1 million more businesses with employees. These firms would add about 9 million jobs and about $300 billion in workers’ income to the U.S. economy.”

That would be a huge boon to our economy and to the communities in which these companies are based. As we frequently talk about at Forward Cities, this is not just about creating equity of access to high-quality services and products within under-invested/under-connected communities – it’s about equity of ownership. Rather than just helping get a grocery store started in a food desert, let’s make sure that grocery store is locally owned.

This is also not just about launching high-growth companies, but rather helping locally-owned, minority-owned enterprises become higher growth. Let’s set our targets on growing the revenue and employment base of the sole proprietors of color – creating more livable wage jobs and stronger opportunities to have equity in the new economy. This is going to require robust enabling environments that increase access to financial, social, and knowledge capital.

These were key themes that reverberated throughout the Forward Cities’ panels and conversations – from practitioners, to funders, to policy-makers. A critical point, though, was made during a conversation between Camryn Smith of Communities in Partnership in Durham and Evelyn Burnett of Cleveland Neighborhood Progress in Cleveland: this case can’t just be made by the communities that have been directly impacted by segregationist policies and generational disinvestment. It has to be made by all of us.

For the last several decades, economic growth in cities has often had an inverse relationship to economic inclusion by accelerating gentrification and displacement. City and community leaders are now starting to recognize economic inclusion as a competitive
imperative.

This is the work of the Forward Cities network – one that we will carry forward through our communications, convening, and capacity-building work including our national conference in Miami November 7-9. This is not about being polite. It’s about directly addressing how we got to where we are, making a clear and strong case collectively, and putting practical ideas into practice that
make our cities and communities more inclusively competitive. We look forward to continuing to engage you in this important work and conversation.

Christopher Gergen is the co-founder and CEO of Forward Cities. He can be reached at
cgergen@forwardcities.org