Finley: Tougher for blacks to join city's rebirth

Eric Williams has a pretty strong theory about why there are so few African-American participants in Detroit's revival.

Williams, a professor who heads Wayne State's Program for Entrepreneurship and Business Law, providing free legal services to Detroit start-ups, sees a class and cultural divide that works against black entrepreneurs.

"Part of what you're dealing with are class issues, which break along racial lines," Williams says. "A lot of middle class black folks get locked into upward mobility — go to college, get a good job.

"So by the time they decide to start their own business, they are generally in their 30s or 40s, mid-career, with family responsibilities that make risk taking more difficult."

"The white entrepreneurs I see in the city are younger, mostly in their 20s, no kids, no mortgage. They've either skipped college or are just out, have some disposable income and family support, and can plunge in and take a risk."

Decades of devastation of Detroit's small business base also means that fewer black children have grown up with parents who own their own business, or even in neighborhoods where they're exposed to small business people.

"Small businesses just kind of disappeared in Detroit," Williams says. "One of the repercussions is the mind-set that 'I can own my own business' hasn't taken root in children as they grow up."

Young, white entrepreneurs typically have more family financial support, he says, but also access to a broader network of resources.

"Starting a business is no joke," Williams says. "You need people who can co-sign a loan, who can point you to an accountant, to a lawyer. It's very different if you have all these support systems."

William grew up in Detroit, attended Cass Tech and the University of Michigan, and left for law school and a career in New York City. He came back four years ago to join WSU's law faculty and aid in his hometown's rebirth.

He has a number of ideas for increasing black participation, including greater support of programs already in place that nurture minority owned small businesses.

He also urges the city to break down regulatory barriers to start-ups. For example, he says food trucks are an excellent entry point for entrepreneurs who ultimately want to open a restaurant.

"But there are no regulations that permit food trucks, unless they are on state land or private property," Williams says. "You have to know somebody. There are a lot of regulatory barriers that shouldn't be there, and this is one of them. Licensing fees are also higher in the city, and that hurts those with less capital."

Williams says Detroit needs more diversity among those who are providing money to start-ups.

"Diversity is important because people always favor people they know, or who look like them," he says. "If you have a predominately white, male venture capital environment, that's who they are going to look at when investing."

Of the current situation in Detroit, Williams says "none of it is deliberate. It's the way it evolved."

But changing it will take deliberate efforts, and more people recognizing there is a problem.

nfinley@detroitnews.com

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