Indicators for an Inclusive Regional Economy

The Center for Economic Inclusion (the Center) is the nation’s first organization dedicated exclusively to equipping public and private sector employers and policy makers to close racial employment, income and wealth gaps and catalyze inclusive economic growth. The Center is Black woman-founded and -led. Since the Center’s founding in 2017, we have inspired innovation and transformation across the nation.

In 2019, the Center created the Indicators of an Inclusive Regional Economy (the Indicators) as a guide for leaders in all sectors to understand the dimensions of economic inclusion—and exclusion—within our region (St. Paul/Minneapolis). In 2022, after consultation with dozens of partners from different racial and ethnic communities, the Center launched a revised version of the Indicators in a virtual lab that allows users to disaggregate data by race, ethnicity, and cultural communities. The Indicators are free to the public, easy to use, and intended to guide bold actions by business, government, and civic leaders.

The Indicators serve to increase understanding of cross-sector leaders and launch regional or organizational plans that center the needs and experiences of Black and Brown business owners. By using the Indicators, the ecosystem of support around small businesses can change practices to better deploy capital, be more inclusive and equitable in procurement, and drive economic development to help small businesses grow and regional economies thrive.

By design, the Indicators center needs and experiences of Black, Indigenous, Latinè and Asian entrepreneurs and workers by including metrics like business ownership, business payroll, access to capital, and procurement spend.

Our platform is an interactive domain for users to examine the interconnected indicators of economic progress for a region through the lens of race, place and income. The Indicators are a detailed and data-rich online dashboard that leverages a strategic selection of measures of regional economic inclusion. They are meant to inform actions by leaders in the public, private and civic sectors to build a racially inclusive regional economy. The Indicators seek to focus collective action on essential roadblocks to economic inclusion and support tangible actions to build a racially inclusive economy.

When reviewing and selecting measures to include in the Indicators, Center staff considered the following criteria: 
1) Is this datapoint essential for measuring an inclusive economy? 
2) Does this datapoint tell a compelling story about the challenge and opportunity to build an inclusive economy? 
3) Does this datapoint fit within the five Indicators pillars (Inclusive Growth, Business Development, Human Capital, Access to Opportunity, Sense of Belonging) and work undertaken by the Center? 
4) Can we envision moving the needle on this measure through public and private sector strategies? 
5) Can the data be accessed, disaggregated by race and ethnicity, and updated on an annual basis?

Today, we engage Black, Indigeous, Asian and Latine business owners, racial and economic justice leaders, researchers, and advocates as partners in identifying and assessing a broad range of indicators each year. Through investment from entities such as MIT Solve/Truist, we will be able to automate our data collection and analysis processes to report changes in the data annually, and more readily place this data in the hands of business owners to inform their actions and those of the ecosystem of organizations who support and invest in their growth and success.

Specifically, the collection of Business Development data included in the Indicators is used by the ecosystem that funds and supports entrepreneurs and small business owners. Accelerators, community developers, CDFIs, policy makers and other investors utilize the Indicators data, research, and trend analysis to inform regional planning, policy decisions, and resource allocation. The data is leveraged to hold banks, corporations and investors accountable to commitments for increased investment in Black, Brown and Indigenous businesses, both through direct access to capital and procurement spend.

Regional growth and competitiveness are reliant upon the ability of bankers, investors, and policymakers to invest in entrepreneurs with a commitment to anti-racism. Businesses in majority-Black and Brown communities rely on banks to adhere to lending policies that are equitable and inclusive and to repair the harm of generations of wealth extraction and discrimination. An investment directly in businesses located in communities with a majority Black, Hispanic, Asian, or Indigenous population is an investment in the economic growth and prosperity of the community and of the region’s economy. 

While the Minneapolis-St. Paul region’s overall number of businesses with at least one employee held steady from 2017 to 2019, the number of Black- and Latiné-owned employer businesses grew sharply, by 63% and 46%, respectively. This data represents 94% of companies in the region and excludes the largest businesses, whose leadership is unable to be classified by race or ethnicity. It also does not include sole proprietorships, or businesses without employees beyond the owner. 

Relative to the population share, White Minnesotans are overrepresented among business owners, while all other groups are underrepresented. The difference is largest for Black Minnesotans who owned just 1.6% of employer businesses in 2019, but account for 8.6% of the region’s population. 

Bank loans overwhelmingly go to small businesses located in neighborhoods with a majority of White residents, while businesses in neighborhoods with a majority of residents of color receive a disproportionately small share. Though there are 105 neighborhoods with a majority of residents of color in the Minneapolis-St. Paul metro area, 13.8% of all neighborhoods in the region, businesses in these neighborhoods receive just 6% of bank loans. Meanwhile, businesses in majority-White neighborhoods represent 86.2% of neighborhoods in the region, but receive 94% of bank loans. These numbers have not changed substantially over the past few years. 

The status quo in our field is focused on fixing oppressed people rather than fixing the system that oppresses them. Our approach is focused on dismantling the systemic and institutional racism that has created two very different experiences in Minnesota for white people and for Black, Indigenous, Latine, and Asian people. We are committed to scalable, data informed, market responsive solutions that place communities of color in the center. The Center understands that with our bold goal to create a racially equitable, inclusive and just economy for 3,000,000 people by 2028, we can’t rely on just one intervention. We’ve designed tools that complement one another and compel employers to take and sustain anti-racist actions, while also increasing data transparency and justice with and for Black, Indigenous, Asian and Latine workers, business owners and racial justice changemakers. 

As the Center expands into new regions and markets across the nation, the Indicators will serve as a powerful tool to anchor regional planning, accelerate policy and advocacy work, and create a network of shared accountability to ensure that Black and Brown entrepreneurs and business owners thrive.  

The Center’s theory of change is that we can increase employment, income, wealth and prosperity for Black, Brown, and Indigenous communities by equipping leaders across sectors, industries, and geographies to implement and institutionalize anti-racist systems change at scale. We aim to drive sustainable, scalable change by motivating and equipping individuals in power to take and sustain systemic actions that will lead to ensure that all people have access to opportunity and can participate in the market as workers, consumers and business owners; experience upward mobility and can advance in their careers and build wealth and make long-term investments with confidence in the future; and growth in empowerment and the ability to drive innovation and business growth for economic and community vibrancy.  

We leverage the Indicators platform as a foundational tool in our efforts to educate leaders and equip business owners to advocate for capital and contracts by identifying the ways that business growth in Black and Brown communities not only creates jobs, but helps address each of the social determinants of health including graduation rates, home ownership, income, and community vibrancy; and the actions the businesses, lenders, and government leaders must take to ensure this occurs. 

As a think and do tank, we lead with this tool by multiplying the effect business owners have with this data, by amplifying it in our own efforts with more than 12,000 leaders a year through our efforts to educate, coach, and provide the tools necessary for leaders who are ready, capable, and hold the power to change mindsets, policies and practices that, in turn, can change lives. Our approach moves employers from awareness, to action, to accountability in taking anti-racist actions, using key measures of race, place, and income to make data-informed decisions.