The late 1970s were a time of bright miniskirts, mirrored disco balls and platform shoes. But the wild changes taking place 30 years ago weren't all in music and fashion.
Inside office suites, workers were learning to type memos into their Altair personal computers while hoping to become an important cog in a big, corporate wheel. But as the 1980s arrived, career goals were shifting for those who found cubicle life stifling and who were bold enough to take risks.
An entrepreneurial age was coming, fueled by social change, new sources of capital and new technologies. While some jumped at the chance to start a business, others were pushed by mass corporate layoffs, mergers and growing anxiety about job security.
Whatever the reason, entrepreneurship has become a popular aspiration. A September 2005 Baylor University study reports that since 1980, more than 5 million jobs have disappeared from Fortune 500 companies, while 34 million new jobs were created at small businesses. Also, the number of small businesses increased from 14.7 million in 1977 to nearly 32 million last year, according to IRS tax returns. Today, one in 12 adults is actively involved in starting a business, and more than 60 percent of 18- to 29-year-olds say they aim to own their own business.
Donald F. Kuratko, executive director of the Johnson Center for Entrepreneurship and Innovation at Indiana University in Bloomington, perhaps summed it up best in the Baylor study: "Entrepreneurship," he wrote, "has emerged over the last two decades as arguably the most potent economic force the world has ever experienced."
Power to the Business People
So how did we go from a nation of corporate drones to a nation of entrepreneurs? It couldn't have happened without the changes brought about by the civil rights and women's movements of the 1960s, says Carol Kuc, president of the National Association of Women Business Owners. New laws opened doors for women and minorities who had previously faced high hurdles to business ownership, particularly when it came to funding.
Women, for instance, were scorned by skeptical bankers who discounted their income. "You could get pregnant and stop working," Kuc recalls one banker telling her in the late 1960s. It was also difficult for a woman to get a credit card on her own or to establish a credit line separate from her spouse's until the Equal Credit Opportunity Act guaranteed that right in 1974. Credit cards soon became a vital source of business capital for women wanting to strike out on their own, Kuc adds.
Similarly, nonwhite loan applicants often got the cold shoulder until the Community Reinvestment Act of 1977 required financial institutions to serve all segments of their communities. These laws were a major force in smoothing the road to business ownership for previously disenfranchised groups.
The result? "There was a huge movement of women and people of color into business ownership in the 1970s and 1980s," Kuc says.
Today there are more than 10 million women-owned businesses. Approximately 57 percent of women business owners have a business line of credit, and 82 percent report they have a satisfactory banking relationship. For the past two decades, women-owned businesses have grown at twice the rate of all businesses, the Center for Women's Business Research reports. "At this growth rate, women will be the majority of business owners [fairly soon]," says Kuc. "We still have a ways to go, but the walls aren't as high."
For minorities, the creation of the federal Office of Minority Business Enterprises in 1969--now the Minority Business Development Agency--helped foster growth in minority-owned businesses, says John F. Robinson, president and CEO of the 350-member National Minority Business Council. The creation of "set-asides" in federal contracts opened what had been an all-white boys' club to minority business owners.
In the 1960s, many minorities operated tiny, usually one-person businesses, often started on a shoestring by people shut out of good jobs by discrimination and lack of education. As affirmative action spurred the admission of more minorities to colleges and universities, these new grads left school better equipped to become big-time entrepreneurs.
They often first worked at major corporations, Robinson says. Then, armed with both business experience and more sophisticated education, they set out to start their own businesses. The results were stunning; the number of minority-owned businesses exploded, growing more than 600 percent since 1977. Current lists of top-earning minority businesses include companies with revenues that top $1 billion.
One big opportunity for minority businesses: As the U.S. minority population increased, major corporations grew more concerned about reaching these consumers, so they often turned to minority-owned firms for help with everything from product design to marketing. The growing black and Hispanic populations were also a gold mine for entrepreneurs who understood subcultures Fortune 500 firms were ignoring. One example is Russell Simmons' hip-hop music, media and fashion empire, Rush Communications, founded in 1990.
The author is an Entrepreneur contributor. The opinions expressed are those of the writer.