New, tech-friendly atmosphere helps businesses thrive; Work: The technology boom offers minority entrepreneurs an almost limitless number of opportunities, some say.

THE BALTIMORE SUN

Baltimore may never be mistaken for Silicon Valley. But over the past decade, the region once known primarily for manufacturing has witnessed a tremendous growth spurt in telecommunications and information technology.

From Columbia to Annapolis, companies that specialize in software development, network management and Web design have taken root. And, local experts say, in this new, tech-friendly atmosphere, minority-owned businesses are thriving as never before.

Neither the Department of Labor nor local agencies keep statistics on the ethnicities of Internet-related business owners. But those who keep a close eye on the industry say minority entrepreneurs have wasted no time jumping on the technology bandwagon.

There is an almost limitless number of opportunities, says Ron Swift, president of Swift Staffing, a Catonsville-based employment agency that places about 50 percent of its clients in the information technology field. "Anyone who wants to get involved in this area can. And I think minority businesses come in, fortunately, on a level playing field."

A recent Milken Institute policy brief noted that the number of minority-owned businesses nationwide has grown "explosively," to about 2 million companies grossing a total of $205 billion annually. Locally, more than 12 percent of firms in the Baltimore region are minority-owned. And, according to the Greater Baltimore Council, the metropolitan region ranks seventh in the country for minority-owned businesses.

Entrepreneurs of color are attracted to the Baltimore region for the same myriad reasons as all business owners. Some are drawn because of family ties or the lure of good schools and reasonable housing. Others, especially in the high-tech arena, say they chose Baltimore precisely because the industry hasn't exploded here. Being an Internet pioneer -- a big fish in a small but growing sea -- has its advantages as well.

Frank White Jr., a Chicago native, says when he sought to leave his position as an engineer and open his own telecommunications firm eight years ago, business sense dictated that he head to the Baltimore region.

"At that time black entrepreneurship was more prevalent out here than in the Midwest," White recalls. He chose Howard County, noting its emergence as a headquarters for high-tech firms because of its proximity to Washington and Baltimore.

Today his firm, Advanced Concepts Inc. of Columbia, takes in about $10 million annually.

York Eggleston owns Crave Technologies. The Baltimore native says he remembers the skepticism of his Harvard Business School classmates -- most of whom were headed for California's Bay Area -- when he decided to start an Internet promotions firm in his hometown two years ago.

The local high-tech industry was small then as now -- especially compared with those in California or even the Washington corridor -- but Eggleston says that didn't bother him.

"I believed the movement was broad enough. One of the reasons I came back was because I believed there was hope and growth prospects in the area," he says.

Undoubtedly, there has been growth.

According to Maryland's Office of Planning, the state saw a 5.2 percent increase in 1998 in business services, which includes everything from janitorial services to computer software development. Though the increase was slightly lower than the previous year's, planning officials note that this segment of the service industry is responsible for infusing more than 60,000 jobs -- more than any other sector -- into the state economy since 1990.

In a study by the American Electronics Association, Maryland ranked 15th in the country in high-tech employment, offering more than 97,000 jobs.

"Some people are already saying that the Washington corridor is the next Silicon Valley. That's spreading here to Baltimore also," Swift says.

Even economically distressed neighborhoods are attracting computer companies.

Michael Preston, spokesman for Empower Baltimore, the nonprofit organization formed in 1994 to administer the city's $100 million empowerment zone grant, says several of the companies moving to the region are in information technology or telecommunications. The combination of strategic location and financing that probably couldn't be obtained elsewhere has made the empowerment zones attractive especially to small Web design firms, he says.

In addition to making room for entrepreneurs, the technology boom has created a drive for qualified employees that has broken the glass ceiling, said Sherry F. Bellamy, president and chief executive officer of Bell Atlantic-Maryland.

"There's clearly a shortage nationwide," she says. "That means people who once may have been excluded from a workplace because of gender or ethnicity or race -- well, people can't afford that kind of narrow-mindedness when they need the skills."

At her company, Bellamy says, about 25 percent of the employees are minorities and about 50 percent are women. That rate is fairly steady from years past, she says. The difference is that more minorities and women hold superior and better-paying positions than ever before.

"In the past these women and minorities were at the bottom rung. That's no longer the case," she says. "We have always had a diverse workplace. We now have a diverse workplace that more accurately reflects the ability of people to move up the ranks without race or gender being a problem."

25,000 jobs unfilled

Yet there is a problem. Almost anyone with the technological skills these days finds it easy to advance. But high-tech and telecommunications employers have long complained that there just aren't enough minimally qualified workers to fill the ranks.

Last year, according to the Information Technology Association of America, Maryland employers were unable to fill about 25,000 information technology jobs. Nationwide, the figure was as high as 200,000. In part, experts say, the problem is that the industry is ballooning faster than workers can learn new skills. But in many cases, men and women aren't being taught enough for even entry-level positions.

It's a problem that directly affects minorities. In July, the Commerce Department released the third report in a series that shows the "digital divide" -- between rich and poor, black and white -- is deepening.

According to the report, "Falling Through the Net," households with incomes of $75,000 and higher are more than 20 times likelier to have access to the Internet than those at the lowest income levels. Furthermore, black and Hispanic households are about one-third as likely to have home Internet access as Asians or whites.

And, the authors found, the gaps between white and Hispanic households as well as between white and black households have widened by more than 6 percent since 1994.

"We're in the midst of a very radical and fundamental change. We have to make sure as a society that everybody is participating fully in this new economy," says Ioanna Morfessis, president of the Greater Baltimore Alliance.

Yet, she notes, "There's a large number of residents in the city unable to take advantage of it."

Morfessis and other local officials say the area has understood for several years the need for more computer-literate, critical thinkers in the job market. To that end, a number of companies have funded grants to prepare workers with basic technological skills. The Baltimore Urban League, for example, trains about 75 people a month on the use of word-processing programs, spreadsheets and data-bases. And some companies, anticipating even greater demands for high-tech workers, are investing in programs at the high school and college level to encourage technological literacy.

"We can't afford to not have everyone fully participating," Morfessis says.

Minority entrepreneurs in the high-tech arena face their challenges as well.

"The opportunities that are available to people of color brought on by the Internet still aren't evenly dispersed," says Eggleston, noting that none of the major Internet companies that have gone public is headed by African-Americans.

"Given the volume," he says, "it's conspicuously absent."

'A leeriness'

Debora Beverly of Baltimore Advisors, an organization that focuses on urban businesses, believes the lag reflects the reluctance of venture capitalists to invest.

"The minority entrepreneurs today aren't known by the investment community. There's a leeriness," she says. "People are breaking through the barriers. It's just not as fast as we want."

Business owners such as Eggleston and White agree.

"It's hard to raise money in the high-tech arena unless you have a track record. It's not impossible. It's just hard," White says. "I am learning that a lot of deals are done with people you happen to know. We, meaning blacks, are just coming to a position where we can help others.

"If I was trying to raise money to run a cleaners or a restaurant or a chain of McDonald's, that would be easier. That they can understand. It's not necessarily racism. It's a comfort level."

Eggleston notes that minorities were among the last to gain a foothold in radio and cable station ownership. Unfortunately, he says, he sees Internet technology headed down that same path.

"There are opportunities for sure," he says. "But given the history of other media, diversity and the issue of ownership, it's an issue that needs to be addressed sooner than later."

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