A five-year research project will explore the status of Black businesses in Alabama, with the goal of pinpointing specific challenges they face and identifying strategies to help them thrive.
Led by The University of Alabama, the first study of its kind in the state will tap resources from three universities as well as other organizations in Alabama and beyond.
It will take a deep dive into identifying hurdles encountered by urban and rural Black businesses in Alabama, and how they differ from those encountered by other businesses, said lead researcher Dr. Lou Marino, Frank Mason Faculty Fellow in Family Business at Culverhouse and chair of the College’s Department of Management.
“At the highest level, we’re trying to understand the challenges faced by all entrepreneurs in Alabama and, especially, the unique challenges faced by Black businesses in Alabama, and the factors that lead to their success and their failure, their resilience and their growth,” Marino said.
Partnering with UA are experts from Babson College in Massachusetts. The study will make use of Babson’s highly regarded Global Entrepreneurship Monitor (GEM), a survey-based research system deployed by experts worldwide in studying business ecosystems. Marino said it’s the first time the GEM system has been used to study business across an entire state.
“The GEM Project allows us to understand the total entrepreneurial activity in countries, and the ecosystems portion of the report allows us to see what factors within a specific region support or constrain entrepreneurship and small business startups,” said Dr. Andrew Corbett, a professor of entrepreneurial studies at Babson. “The latest project in Alabama allows us to better understand what factors make a city or region in the state more attractive to, and more supportive of, entrepreneurs.”
The study will involve students from UA and Stillman College who will gather data and conduct interviews with Black businesses and other pertinent sources. The Alabama Entrepreneurship Institute, led by executive director Dr. Theresa Welbourne, will develop programs that address the challenges identified in the study.
Other organizations expected to contribute to the research include Ignite!, an Alabama-based nonprofit focused on supporting minority- and female-owned businesses, and the Alabama State Black Chamber of Commerce. The study is supported by the Alabama Power Foundation.
“This is the first project of its kind that the foundation has supported,” said Hallie Bradley, manager of the Alabama Power Foundation’s Strategic Initiatives team. “Partnering with expert academic researchers, we hope to gain a holistic understanding of Alabama’s entrepreneurs and specifically our Black business owners. And we will share what’s learned with leaders across the state.”
Marino said the study will go far beyond examining archival data and anecdotal evidence that indicates Black businesses in Alabama face greater hurdles than other businesses in the state. Prior research shows that nearly 80 percent of Black-owned businesses fail within the first two years. Research indicates that Alabama trails neighboring states Georgia and Tennessee in the number of Black-owned businesses, after accounting for the three states’ demographic differences.
Marino said the primary research will not only look at Black-owned businesses, but more broadly at the state’s entrepreneurial ecosystem to identify strategies, programs, and tools that can help close the gap in the success rate between Black-owned and other businesses in the state – lifting those businesses and Alabama’s entire economy.
“Through systematic research and key strategic recommendations, we believe that it is possible to grow the ecosystem of Black businesses and, with it, the state economy as a whole,” Marino stated in the study proposal. “With more than 124,000 minority businesses in the state of Alabama, our team believes that investing in Black-owned business can empower communities and help the state move forward and grow.”
Results from the first phase of the research project should be available early next year, with additional information to follow. Plans call for an annual conference to discuss findings and recommendations as the study proceeds.
A version of this article originally appeared on the Alabama News Center, which is presented by Alabama Power.