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Black entrepreneurship in the US: An historical appraisal, contemporary problems and future prospects (a study in demand for entrepreneurship), 1971

Author(s): Robert K.B. Bofah
  • Type: Thesis
  • Researcher: Other Researchers
  • Timeline: 1970s
  • Affiliation: Student

About the Author

Robert Kwaku Buor Bofah PhD '71 earned a BA (Hons.) from the University of London in 1961, an MA University of British Columbia in 1963, an MA from the University of Pennsylvania in 1968, and a PhD from the MIT Department of Urban Studies and Planning (DUSP) in 1971.



The study is concerned with the development of entrepreneurship at the grassroots level. A  school of social scientists believes that in the development of this type of entrepreneurship, "supply determinants", i.e. socio-cultural factors and experience which determine a subgroup's or individual's ability to perceive entrepreneurial opportunities engendered in the process of economic development, are more important than "demand determinants", i.e. governmental actions and programs geared to entrepreneurial promotion. This study however takes a contrary view that demand determinants are more important. In support of this viewpoint, the entrepreneurial experience of American Negroes is used as a frame of reference.

To evaluate the significance of socio-cultural and institutional factors in the development of black entrepreneurship since the Civil War, the Southern socio-economic environment, the attitude of the Federal Government toward Negro economic progress, the impact of the trade union movement and goals of race-advancement organizations are examined. Our analysis shows that the hostile Southern environment, the passive federal attitude toward black economic progress, and the exclusion of most blacks from the mainstream of the trade union movement militated against the development of black entrepreneurship. What is more, black leaders failed to address themselves to the key economic issues that would have enabled blacks to achieve economic integration and progress.

To understand the contemporary characteristics and problems facing black etrepreneurs, and to devise appropriate programs to assist them, 52 black businesses in Boston, selected on the basis of "better performance", are employed as a case study. The study identifies seven types of enterprise and finds that they differ with respect to employment levels, wage rates, extent of capitalization, use of federal loans, physical assets, sales, insurance premiums, etc. Among the entrepreneur's many problems, inadequate sources of finance and employee-related problems are most pressing. It is further discovered that as "organization-makers", they exhibit some common characteristics, namely  (1) they come from average Negro homes; (2) most of them have had worthwhile work experience in the white business sector;  (3) 54% of them possess second businesses; (4) they are less involved in community affairs; and (5) most of them went into business for the purpose of reaping the fruit of their own labor and making money.

Finally, in search for workable solutions to black business problems, federal assistance programs for minority businesses are evaluated, and it is concluded that overhauling of existing programs is overdue and that the private sector has a crucial role to play. Furthermore, it is argued that long range solutions should be conceived within the framework of a national urban policy. On the basis of the Boston survey, "incremental" solutions are proposed for tackling such immediate problems as inadequate loans, poor fringe benefits for employees, high cost of relocation and dual entrepreneurship.

Bofah, Robert Kwaku Buor. "An historical appraisal, contemporary problems and future prospects (a study in demand for entrepreneurship)." Thesis. Massachusetts Institute of Technology, 1971.