Want to Drive Economic Growth? Invest in Diversity, Equity, and Inclusion

Mercedita Roxas-Murray wearing a red shirt

Montage Marketing Group CEO, Mercedita Roxas-Murray, reflects on her experience at the 2024 National 8(a) Small Business Conference, specifically how diversity, equity, and inclusion programs support business success and economic growth.

Forbes Advisor recently released its 2024 Small Business Statistics. The facts might surprise you. Forbes begins by stating “Small businesses form the bedrock of the American economy.” Indeed, 33 million small businesses in the United States make up 99.9% of all U.S. businesses. Their “significant role in generating employment and contributing to economic stability” cannot be understated.

The report goes on to state that the ownership of small businesses by racial minorities and veterans is a significant aspect of the diverse entrepreneurial ventures in the U.S. “The 20.4% of small businesses owned by racial minorities and the 14.5% owned by Hispanics highlight the contributions of diverse cultural perspectives to the economy.”

As a minority, female small business owner, these stats make me hopeful. But others remind me of the ongoing disparities experienced by my business peers. One in five small businesses fail in the first year. That increases to 50% by year five. The most cited reasons for failure? Financial challenges (38%) and insufficient market demand (42%), both of which disproportionately impact among minority businesses. The Minority Business Development Agency (MBDA) further noted in a recent report that while the number of minority-owned firms has grown by 35 percent, the average gross receipts for those firms dropped by 16 percent, which is not a recipe for success.

Why I Attended the National 8(a) Small Business Conference

When it comes to access to capital, contracting opportunities, and other entrepreneurial development avenues for small and minority-owned firms, there is much more work to do. That is why I attended the National 8(a) Association National Small Business Conference in Atlanta, GA earlier this month.

The conference offered educational sessions and resources for small and minority businesses that are aspiring, current, or graduated participants in the coveted U.S. Small Business Administration’s 8(a) program. It also provided opportunities for supplier diversity matchmaking and networking with federal agencies, large business prime contractors, and commercial companies. The primary goal of the both conference and the 8(a) program is to help small and disadvantaged businesses gain equal access to economic growth opportunities.

In certain circles, there is a perception that conferences and programs like these that support business diversity and inclusion and enable equitable opportunity are ‘welfare’ programs where people line up expecting contracts to be handed to them. Simply put: They’re wrong.

At the conference, I learned so much from my fellow minority business colleagues. I enhanced my knowledge about the unique business of federal contracting. I met prospective customers and teaming partners, and I identified resources to help improve Montage’s operations. What I did not get out of it was a ‘handout’. Rather, it is up to me and my team to follow up, incorporate my learning, and pursue opportunities. While it takes a lot of hard work, energy, and commitment, it is worth it on so many levels. I believe the same is true of diversity, equity, inclusion, and accessibility (DEIA) programs of all kinds.

How DEIA Fuels Economic Growth

Unfortunately, these four words—diversity, inclusion, equity, and accessibility—have become weaponized. Proliferated by scarcity mindset and a loud megaphone, some perceive the principles and the presence of DEIA programs as a threat to opportunity. But that couldn’t be further from the truth. That’s why, rather than fixating on the words themselves, I suggest we look at their intent. In doing so, the benefits of DEIA in a business context reveal themselves. To cite a few:

  • Minorities in the U.S. represent 32% of the population. Understanding the needs, interests, and values of these communities—and appreciating their purchasing power and influence—can more strongly drive the economic engine of the country.
  • Similarly, businesses that offer products and services that reflect their communities align and improve market demand, decreasing one of the chief reasons for small business failure.
  • DEIA enriches organizational and workplace health by ensuring all employees and their ideas are seen, heard, and valued. Employee recruitment and retention have become even more challenging after the pandemic, but having a more inclusive work environment leads to greater employee satisfaction and stronger business outcomes.
  • The United States’ global competitiveness depends on having an educated, experienced, and world-wise workforce. DEIA programs support the critical cultural understanding needed to play and win in international environments.
  • Companies that value diversity and inclusion are better able to serve clients and customers who share those values. Investment in programs that foster DEIA enables small and minority businesses and others to lend their expertise and gain the past performance needed to grow.

Key Takeaways

Needless to say, I came away from the National 8(a) Small Business Conference with a renewed sense of focus on how to ensure minority and woman-owned small businesses can continue to grow and be successful. And grow we must! Remember, approximately 6.6 million businesses are owned by minorities and more than 9.9 million employees depend on our success. The “bedrock of the American economy” cannot be stable if small and minority-owned businesses fail.

As the U.S. Senate Committee on Small Business & Entrepreneurship stated, “Diversity is one of the nation’s greatest strengths, and diverse small-business ownership is essential to our nation’s continued economic success and growth.” While it is up to us to continue delivering great work, it is our fervent expectation that the marketplace meets us halfway, keeps the door open for us to compete, and does not turn us away because we are small, minority, or female-led.