Cuomo revamps business inclusion efforts

Governor Andrew M. Cuomo  dramatically increased New York State's  goal for minority-and-women-owned enterprises (MWBE) state contracting utilization to 30 percent – as new data releasedshowed that New York State has far exceeded the original 20 percent goal that he set in his first State of the State address. That 30 percent goal represents the highest such target in the nation for any state government.

Governor Cuomo made the announcement at the start of New York State’s Fourth Annual MWBE Forum in Albany – where he unveiled new data on record MWBE utilization in state contracting of 25 percent in FY2013-14 – which represents a total of nearly $2 billion in contracts. That figure is up dramatically from the 10 percent MWBE state contract utilization rate in FY2010-11 when Governor Cuomo took office.

"Discrimination and racism is alive and well and it is illegal. Government has an affirmative obligation to right these wrongs, and we need to have the same strength in enforcing these laws as we do with criminal and drug laws," Governor Cuomo said. "First, we worked hard to fix the MWBE program, looking at the goals set for the program and what had actually been achieved. We exceeded our goal of state contracts going to MWBE contractors, from 20 percent to 25 percent – that's $2 billion and the highest in the nation. New York has done many things but we still have more to do, and that is why we are proud to announce a goal of 30 percent, the highest in the United States, to continue this progression and momentum and ensure that MWBEs are fully represented in this state."

More than half of the states have statewide business inclusion initiatives. For policymakers and citizens who wonder how effective those efforts are, our annual state by state evaluation is a useful way to ascertain best practices.

We have distilled those into the ten key factors for black business success. Rating each state on a ten point scale for each factor, the State of Black Business arrives at a single rating which is then comparable to other states around the nation.

We have argued that there must be a shift from a compliance mentality to an economic development approach in order to create the jobs needed to undergird black neighborhoods.

In lean budget times, governors and legislatures of both parties are demanding results from business inclusion efforts. States which scaled these operations back have reversed course and put more resources into it.

The earlier chapters show both the potential and the unmet challenges of business inclusion. Public policy does create business opportunities for underrepresented companies. However, settling for raw revenue figures does not translate into opportunities in the fields which create the most jobs in the communities where they are needed most.

These are the factors which count:

Executive Leadership – Among the ten states with the greatest procurement spending with black-owned businesses, five are governed by Democrats and five are led by Republicans. Supporting business growth transcends ideological boundaries.

Legislative Authority – Many states have a legislative history of more than 30 years in support of business inclusion. These statutes have been maintained through party shifts, because they represent a broad consensus of state and local leadership.

Federal Procurement Success – States are taking a greater role to pursue business from the world’s largest customer, the U.S. federal government. Black businesses have federal contracts in every state in the nation.

Monitoring of State/Local Contracting – The states with the most success in providing supplier diversity have quarterly monitoring of results with specific breakdowns for African-American businesses, including new attention to spending with African-American female-owned businesses in some states.

Access to Capital – In Chapter 2, we described how states are stepping into the breach to provide loans and guarantees which can provide African-American businesses with the cash flow to compete. The need for this resource also crosses party lines.

Rate of Growth – The velocity of self-employment growth among African-Americans is an indicator of the policy environment that individual owners perceive. We’ve tracked these statewide figures for the past 10 years.

One-Stop Access – Minority businesses need a clear point of contact with government such as the maintained by the Governor’s Office of Minority Affairs. As we travel around the country, we encounter many entrepreneurs unaware of services available in their own state or locality.

Ratio of black/white self-employment – Another statistical measure of how African-American businesses are included in the overall economy of a state. We find this number is closely correlated with disparate rates of unemployment.

Cultural Tourism – More than half of the states actively promote and preserve their African-American historic sites with festivals, museums, historic markers and online/print guides as a way to stimulate economic development.

Large-Scale Enterprises – Our focus on Job Creation and Innovation recognizes that millions of manufacturing jobs lost by African-Americans will not be replaced by small retail establishments alone. Communities need employment anchors based on manufacturing which responds to the basic needs of local, regional and global markets. Where these firms exist, smaller companies have a much greater chance to succeed.