By Marc Morial, President, National Urban League
Too often overlooked by leadership in the black community, capital is the lifeblood of our market-based economy. The entrepreneurial activities that create employment in the black community cannot survive without access to capital. Capital in the form of bonds, equity, or currency, is traded every day, and flows to opportunities that provide its holders with the highest returns. Natural capital, such as land, natural gas, coal, and water rights, source the food we eat and fuel the power plants that generate energy for our communities.
For too long the black community has not fully benefited from the capital that flows through the American economy. This “capital divide” has a historical basis in America’s slavery era where blacks were held in physical bondage as capital themselves. During the 100-plus years of Jim Crow segregation that followed the emancipation of African Americans from slavery, blacks were systematically excluded from accessing capital, whether for building homes or building businesses.
Exclusion from capital has led to huge discrepancies in wealth between whites and blacks in America. Black households were disproportionately ravaged by the 2007-2009 recession as a result, in part, of holding insufficient amounts of capital as a buffer against the economic storm. As housing values fell and unemployment and foreclosures increased, it became increasingly clear that an alternative route to economic prosperity was needed.
One alternative route may lie in greater participation in the telecommunications, media, and technology sector of the economy. Since the first message was sent over the ARPANET, the internet’s predecessor, back in 1969, and the publication of the first page on the World Wide Web in 1990, emerging communications technologies have shown great promise for reformatting how the American economy produces goods and services and uses human resources. Over the past quarter–century, how we access the nearly 7,000 interconnected networks that make up the internet has changed, from earliest connections that used old copper phone lines, to digital subscriber line services, to cable modem, to high-speed wireless networks. This change in access capabilities has made communications over the internet faster and more efficient.
While not a panacea, technology — especially broadband technology– can be used in three ways to strengthen the relationship between capital and the black community.
First, use of broadband technology can lead to new entrepreneurial opportunities. With the adoption of high-speed broadband, more individuals are marketing goods and services online. According to market research firm eMarketer, e-commerce sales are expected to top $3.5 trillion by 2020. The web will account for 12.4% of global retail sales by 2019. The Asia-Pacific region, which got plenty of attention during last year’s negotiation of the Trans Pacific Partnership agreement, was expected to have $875 billion in online sales in 2015.
Black American entrepreneurs need not focus solely on urban markets here in the U.S. Given less availability of local goods and services, an additional 80 million residents in global rural areas were projected to use their cellphones in 2015 to purchase goods and services.
Meanwhile in the United States, e-retail sales are expected to climb to $548 billion in 2019. Without broadband, access to these emerging opportunities would not exist leaving black-owned businesses in a state of digital Jim Crow.
Second, broadband simplifies the process of raising capital. No longer are start-ups or serial entrepreneurs relegated to the traditional network of family or close friends. And while redlining is still an issue for blacks trying to obtain credit, accessing non-traditional funding networks helps to hurdle that barrier.
Broadband provides fast access to social networking sites like LinkedIn or Facebook where like-minded individuals sharing a business vision can congregate and collaborate. Sites specifically geared toward fund raising such as GoFundMe, Crowdfunder, Kickstarter, and Indiegogo underlie the crowdfunding era, allowing start-ups to expand beyond their traditional networks or create a network of funders where none existed before.
Third, broadband access addresses inclusion not only by providing black Americans with alternative digital routes to goods, services, and capital, but also by providing black Americans with a medium that amplifies their messages and their voices. Effective participation in the American political economy calls for continuous engagement. Broadband access allows black Americans to create digital media and provide America with alternative and insightful information that runs counter to or keeps the main stream media in check. In a number of ways, broadband access and digital media continue the “freedom campaigns” waged by civil and social justice stalwarts like Marcus Garvey, Malcolm X, and Martin Luther King. Just imagine if Malcolm X had Twitter or Marcus Garvey had Facebook.
As we move forward and write the history that future generations will read, we should leverage all available technology at our disposal in order to accumulate and deploy the capital necessary for creating prosperity in our communities. Broadband can and should play a role in creating that history.