As the business community looks to support the fiscal sustainability of the Chicago region and the state of Illinois, we must leverage every opportunity to support our economic health.
Chicago businesses may be surprised to learn that one source of untapped potential to boost the local economy is located right here in our backyard — Minority Business Enterprises. MBEs are a driving force in job creation, especially among minority communities. Small- and medium-size enterprises are often cited as the source of substantial job creation. Studies have shown that as a subset of that group, MBEs tend to locate within and hire from areas with higher percentages of minority residents.
The enhanced flow of money to the region improves the property tax base, increases employment and earnings, ignites business activity and creates the multiplier effect of local firms and residents spending dollars with other local firms.
Falling behind
A strong minority business community has the potential to deliver positive change. The potential, however, is currently unrealized because Chicago companies underutilize MBEs. A recent study by Chicago United provides a lens into how other markets have benefitted from concentrating on utilizing minority firms within their region.
The study found that Chicago ranks behind Los Angeles, Miami, Detroit, Houston, Atlanta, Dallas and New York in revenue generated by its large MBEs and those revenues have a strong correlation to job creation.
In 2013, in Los Angeles’ minority-owned businesses generated revenues of $21 billion — putting them firmly at the top of the rankings. Comparatively, Chicago’s seven largest minority-owned firms collectively generated $637 million.
Creating a more inclusive and business-friendly environment for MBEs is one of Chicago United’s main priorities.
Minority entrepreneurs put their capital to work and create jobs in underserved communities. Take for instance LSL Industries, a manufacturer of medical devices and disposable surgical procedure kits for the medical community. The firm is headquartered on the northwest side of Chicago and employs more than 150 people from local communities. Chicago-based Cedar Concepts Corp. opened a new plant on Chicago’s southwest side bordering African-American and Latino communities. CEO Linda Boasmond is the only African-American woman in the U.S. to own a chemical manufacturing plant.
These manufacturing firms have the capability and capacity to grow and strengthen the local economy. Through the Chicago United Five Forward Initiative, we hope to bring visibility and contracts to these and the many MBEs who invest their capital and invest in their employees.
Get engaged
Companies need to include MBEs early in the conversation to give enough time for them to be innovative and responsive to the business’ needs. Senior executives must communicate the importance of including local MBEs in their bids and in opportunities with their primary contractors. This directive needs to be emphasized from the top down in order to effectively create change in a company’s business operations.
I encourage Chicago-area business leaders to engage MBEs on a more regular basis to help further improve relationships and opportunities between Chicago corporations and minority-owned businesses. ●
Gloria Castillo is president and CEO at Chicago United.
