Summary:Moderator K. Robert Turner opened the panel on Emerging Domestic Markets with a private disclosure: Like "the only kid in town who has discovered the local candy store is open on Sunday," Turner would like to keep the opportunity of the emerging domestic markets a secret to himself. This market opportunity, however, is even too great for Turner′s sweet tooth. According to Glenn Yago, minority businesses are growing at six times the national rate of business formation and account for $1.3 trillion, or twenty percent of the U.S. total $6.5 trillion purchasing power.
Ironically, despite the glaring opportunities presented, this "buyer′s market" is seriously undervalued by investors. Victor Maruri and Kay Koplovitz both cited the lack of a network for these emerging domestic market groups as a hindrance to their capital flow. Yago cites the lack of investment into education, health and pension programs, which ties into the labor supply constraint that threatens our economy — a declining workforce hitting near replacement level, in a market that by 2020, will be a 70 percent constituency in the workforce.
Panelists concurred that opportunities abound in the emerging domestic markets and offered a number of approaches to encourage capital flow into this heavily under-invested opportunity. Linking technology with capital access, Gail Snowden hopes to breach the "digital divide" existing among minority groups with Fleet′s Community LINK program. This program provides access to technology for adults in the under-valued emerging domestic market groups.
As Kay Koplovitz puts it, "Minorities and women currently operate under capital starvation." Without capital to take advantage of the technology there is not much reason to take interest in its access. Business incentives rather than social incentives must be created for institutional investors. In the past they have taken the form of Community Reinvestment Act (CRA) and empowerment zones. Washingon, D.C.′s Mayor Anthony Williams of discussed a unity between the public and private sector that fosters less government regulation, thus promoting a greater climate for investment.
Finally, the initiative was placed in the hands of the minority groups. Koplovitz′s Springboard 2000 and Springboard 2001 puts women-owned businesses through presentation boot camp, assisting in the funding process and opening up a network for them.
Turner′s Washburn Wire manufacturing site, located in Harlem, New York, a famously under-invested community, is expected to generate 1500 jobs, $30 million dollars for New York, and an Internal Rate of Return of 30 percent per annum for the site′s investors, thus creating a much needed track record and a paragon for future investments into emerging domestic markets.
