There is little denying that the City of Dallas is booming.
Dallas is one of the largest (and fastest-growing) metro areas in the United States. Its GDP ranks 6th among all major American cities. And compared to cities of similar size, like New York City, Los Angeles, and Chicago, the cost of living is roughly 30% more affordable. Combine that with low taxes, business-friendly incentives, and several unique resources to benefit the growth of small businesses, Dallas becomes an attractive home for entrepreneurs.
However, lying within the gaps that bottom line statistics fail to measure, something is glaringly wrong: the inclusiveness of its resources.
The Problem
While strong overall economic growth is apparent, an in-depth report on Dallas’s small business ecosystem by Next Street found that considerable inequalities still exist among entrepreneurs of color, women, and those from historically low-income areas.
In 2020, The Urban Institute ranked Dallas 272nd out of 274 American cities in economic and racial inclusiveness. Some of the top challenges facing underrepresented groups in Dallas were access to capital, networks, mentors, and knowledge of local resources.
An exclusive report by the WFAA found that 20% of banks in the Dallas area do not extend their services to residents who live south of Interstate 30 without approval from regulators.
Communities south of the highway are primarily Black and Hispanic. The banks’ exclusion of these neighborhoods creates significant barriers for business owners who live in them, as bank lending is still the most common form of financing for small businesses.
Typical alternatives to bank loans include fundraising from friends and families or early-stage capital providers. However, most founders from areas with limited personal wealth do not have connections to either, demonstrating how access to social capital can be just as crucial to success as financial capital. A strong network of peers and mentors helps inexperienced business owners navigate obstacles and achieve growth, a luxury that many do not have.
To work towards a more inclusive future, cities and organizations must realize that a problem exists. But, merely identifying the issue is not enough. Creating a cohesive digitized platform of the ecosystem is the most actionable step forward. By doing so, Dallas separated itself from many major American cities.
And cities vying to become modern entrepreneurial hubs should take note.