Ernst & Young, the accounting and consulting firm, will support 12 small Black- and Latino-owned businesses in the Twin Cities as part of a multicity business accelerator program it calls the Entrepreneurs Access Network, or EAN.
EY is the most recent major company, in the wake of the outcry over the May 25 death of George Floyd in police custody, to do more work to foster success among minority-owned businesses and narrow income gaps that are particularly pronounced in the Twin Cities.
“The EAN will serve as an enabler to accelerate the ability of these companies in order to break through the barriers these leaders face, allowing them to achieve their potential.” Michael O’Leary, EY’s Minneapolis office managing partner, said.
He added the firm will serve the entrepreneurs just as it would its largest clients.
“Priority access,” O’Leary said. “To have a sustainable impact, we need to include the ecosystem beyond our firm. Other key stakeholders will be venture capital, banks, private equity, attorneys and other resources.”
Ranga Chinongoza, a senior manager in EY’s Minneapolis office, will lead the pro bono effort.
EY’s first clients in the EAN in the Twin Cities are: Abundant 180, Andros ENT & Sleep Center, Contreras & Metelska, Casa Travel & Technologies, Ideal System Solutions, Independent Packing Services, InGensa, Innocent Technologies, Integrated Staffing Solutions, JIT Energy Services, Joyous Care Services and TRI-Construction.
The accounting firm’s outreach includes an assessment by a dedicated EY relationship adviser, assistance with digital improvements, employee training and board development.
“The EY announcement is great news for those businesses, and EY is not new to this work or declaring inequities as unacceptable,” said Tawanna Black, chief executive of the Center for Economic Inclusion, a Minneapolis-based research and action group.
“EY is one of the few corporations that has boldly said specifically we challenge everyone to take action to eradicate racism,” Black said. “They are not just saying we want to increase inclusion.”
The center’s research has found that Black and Latino Minnesotans own businesses at a rate one-third that of whites. And EY’s own research showed that only about 1% of venture capital dollars go to minority-owned businesses.
The coronavirus pandemic underscored some of the disparities. EY said only half the minority businesses that applied for federally financed aid during COVID-19 this year found a lender to accept their applications. EY said this is “indicative of other long-standing systemic economic barriers faced by business founders of color.”
Before the COVID-19 pandemic, McKinsey reported that the U.S. economy could grow by $1 trillion to $1.5 trillion by 2028 if actions were taken to close racial wealth gaps.
Recent analysis by labor economists at the Minnesota Department of Employment and Economic Development demonstrate that minority employment is growing faster than the overall labor market in key career categories over the last five to 10 years, including technology, business management and health care. However, the wealth gap between has not declined markedly.
Neal St. Anthony • 612-673-7144