In Pursuit of Restorative Justice: Insights from Marginalized Businesses in Oakland,California

Abstract

This research investigates the potential for achieving racial reconciliation in the United States through addressing systems of discrimination in historically marginalized communities. Using qualitative methods including focus groups and interviews, this study explores the impact on community economic viability of elevating Black and minoritized businesses to survive entrenched race-based discriminatory practices. Based on interviews with 21 Oakland manufacturing business owners, findings reveal that beyond the well-documented challenges facing marginalized businesses (access to capital, market, and education), additional needs exist including building community and ecosystem collaboration, building community and ecosystem trust, alleviating the “social vs. profit” strategy gap, and engendering community commitment. The study proposes methods for addressing these complex and interconnected needs as a first step toward racial reconciliation in affected communities.

Is Racial Reconciliation Achievable within the United States?

Introduction and Framework

Recognizing the staggering magnitude of cumulative violence, cultural erasure, and economic extraction that minoritized Americans have suffered under the self-reinforcing systems of discrimination within the United States, this work seeks methods for redress, repair, restoration, and reformation to promote social transformation and unity. In order to address the searing yet normalized systems of oppression in the United States, we argue that we must first acknowledge the complex, tightly woven, and self-reinforcing systems of racial discrimination that define the economic, educational, healthcare, political, and institutional landscape. This calls for addressing the historical injustices embedded within our social systems, policies and processes, and challenging the societal institutions and structures which normalize, legitimize, regenerate and perpetuate these disparities.

One critical step in addressing the impacts of embedded discriminatory systems is delivering restorative justice to those community members who have faced the greatest violence, exclusion, and trauma stemming from those discriminatory institutions and systems. Therefore, the intention of this study is to investigate potential paths for restoring the livelihoods and human potential for residents in our most marginalized and disinvested communities.

Examining US Community Disparities

Per Gorman (2017), well-documented economic disparities exist in Black American communities, rooted in the widening racial wealth gap between Black and white households. As reported by Lahr, et al (2022), the unrelenting Black-white racial wealth gap “is a continuing legacy of institutionalized, structural, and individual racism within the United States” (p. 2). Further, these economic and racial disparities “link directly to, and further exacerbate, disparities in education, health, housing, and food security in communities of color” (Lahr, et al, 2022, p.2).

Well-documented evidence further exists that employment, and specifically business ownership, can create paths to wealth creation to address many of the race-based economic disparities which burden Black and Brown communities (Bates et al., 2007; Gorman, 2017). Yet, the systemic biases which threaten vulnerable communities similarly undermine prosperity for small, disadvantaged businesses within these communities. Throughout our research in support of marginalized businesses, three factors have been repeatedly emphasized as crucial to viability and growth: Access to capital, access to education, and access to market (Lahr et al., 2022; Lofstrom & Bates, 2013; Robb & Fairlie, 2007; Zeuli et al., 2018). However, for BIPOC (“Black, Indigenous, and other historically marginalized People of Color”)-owned businesses, and Black-owned businesses in particular, the ability of these businesses to successfully gain access to these critical resources continues to be impeded by entrenched barriers arising from historical disenfranchisement and discrimination (Lahr et al., 2022).

Kroeger and Wright (2021) discuss the disparities in long-term business success of Black-owned businesses versus white-owned businesses. They report, “Although Black people appear to start new businesses at higher rates than white people (Köllinger & Minniti, 2006), they are less likely to remain business owners over their life course (Ahn, 2011). Subsequent research has confirmed what these two findings imply: businesses owned by minorities tend to be less successful than those owned by white people” (p. 184). Further, Kroeger and Wright have analyzed the impacts of these stark disparities in business viability on the economic mobility of Black business owners and their families – illustrated in Figures 1 and 2. They report that “a Black entrepreneur who begins in the middle wealth tercile has roughly a 39% probability of rising into the top tercile over the next 4 years, and a 35% probability of falling into the bottom tercile. In contrast, a comparable white entrepreneur who begins in the middle tercile has a 47% probability of rising into the top tercile over the next 4 years, and only a 14% probability of falling into the bottom tercile. Our analyses suggest that these dramatic differences are primarily due to the differences in success rates for Black and white entrepreneurs” (Kroeger & Wright, 2021, p. 193).

Addressing Economic Disparities in Black Communities

Historic Barriers to BIPOC-Owned Business Success

Time and time again, researchers have concluded that discrimination in commercial capital access is one of the greatest impediments to viability and success for BIPOC entrepreneurs and small BIPOC-owned businesses (Gorman, 2017; Lahr et al., 2022; Turner, 2016; Zeuli et al., 2018). Biases in lending as well as capital investment cause these businesses to be perpetually undercapitalized throughout their entire life cycle (Fairlie & Robb, 2010; Gompers & Wang, 2017; Lofstrom & Bates, 2013; Sohl, 2018; Zeuli et al., 2018). Given that, rather than flourishing in high revenue generating, but capital intensive industries like wholesale trade, manufacturing and utilities, these businesses instead largely compete in less capital intensive industries such as health care/social assistance, professional/scientific/technical services, retail trade, administrative support/waste management, and construction, which tend to be low-revenue, labor-intensive (higher turnover), and highly competitive—and thus these businesses are plagued by disproportionately higher failure rates (Gorman, 2017; Lahr et al., 2022; Reuben & Queen, 2015).

Management education continues to be identified as critical to business startup and growth (Bates et al., 2007; Hecht, 2018; Lahr et al., 2022; Zeuli et al., 2018). This is even more pronounced for BIPOC-owned businesses. As Zeuli et al. (2018) report, their research on high-growth businesses in inner cities finds that due to the discriminatory obstacles that business owners of color face in accessing essential resources, they must over-compensate in areas like education in order to be competitive. They report that even for the BIPOC-owned businesses demonstrating high-growth in their study, the leaders of these organizations have had to accumulate higher levels of education than their white peers, yet still lag those white peers by 44% in profit.

Overall, Black students are disproportionately underrepresented in the business school pipeline, compared to both the overall U.S. population and to bachelor's degree graduates. Yet given the significance of higher education on the growth potential of BIPOC-owned businesses, this further hinders the proliferation of BIPOC-owned businesses (Lahr et al., 2022; Zeuli et al., 2018).

Recent attention has focused on efforts to improve “supplier diversity” in order to improve access to market for small, disadvantaged businesses. The intention of these programs is to link small businesses with large “anchor” business clients to ensure steady, predictable, long-term sales for these small businesses. However, securing supplier diversity opportunities has been demonstrated as particularly challenging for BIPOC-owned businesses, due to inconsistent commitment to the engagement of these businesses by the anchor organizations (Dollinger et al., 1991; Lahr et al., 2022; Portnoy & D'Costa, 2019). These challenges are further compounded by the power dynamics along the value chain—where suppliers of color are often at the mercy of abusive tactics and performance demands on the part of large anchor buyers (Blount, 2021; Schleper et al., 2017).

Marginalized Business Challenges in Oakland, CA

Our team found these themes and issues echoed by participants in our recent study of the needs and challenges facing traditionally underserved businesses in East Oakland, California. Our team was asked by a local manufacturing hub to hold listening sessions with emerging manufacturers in Oakland in order to investigate the obstacles local makers and manufacturers face in Oakland, as well as any positive resources that the makers have found to help them grow and thrive. East Oakland demonstrates the profound perseverance and care of a deeply rooted community, but one that continues to be oppressed by the legacy of redlining and persistent disinvestment. As Ravani (2019) notes, “As significant swaths of Oakland bloom with new development … East Oakland is a neighborhood removed, pockmarked by small operations searching for a way to grow” (p. 2).

In 2018, the City of Oakland conducted a groundbreaking study to measure levels of equity in Oakland (City of Oakland, 2018). This study, which provides the most recent equity indicators for Oakland, was developed to provide a “quantitative framework that can be used by City staff and community members alike to better understand the impacts of race and measure inequities” (p. 8) in Oakland, and to serve as a baseline to assess trends in disparities over time. As reported, poverty disproportionately affects Black (26.1%) and Latino (21.9%) communities (p. 24), with “the median income for White households 2.93 times the median income of African American households” (p. 34). Further, “Among White employed individuals, 3.9% were business owners, compared to 1.4% of African American employed individuals” with business ownership in the city overall at 2.6% (p. 23).

According to the Greenlining Institute, “as Oakland undergoes rapid change with new developments, investments, and incoming residents, economic prosperity is not being shared equitably among Oakland's communities. … For Oakland's small business community, the threat of commercial displacement may loom most threateningly for small businesses owned by people of color, which constitute 49.5 percent of the city's total businesses” (Velasquez, 2019, p. 3).

Goals of the Study

This qualitative study sought to engage and collect learnings from a diverse and representative sample of local manufacturing businesses, ranging from premarket to growth-stage companies. The study aimed to strengthen and expand the network of local entrepreneurs and manufacturing industry partners in the local manufacturing ecosystem while identifying common barriers and enablers for local manufacturing firms, and existing partnerships and synergies which could be reinforced. Additionally, the research sought to develop recommendations for key stakeholders in government, education, industry, and the entrepreneurship ecosystem.

One of the areas of particular concern for this research was ensuring that the perspectives of traditionally overlooked or underrepresented businesses were central to the study. Therefore, manufacturers of color, women, and others facing multiple, compounding barriers were expressly encouraged to participate. As observed by Bates et al. (2007), small BIPOC-owned businesses face pervasive discrimination in accessing the three key determinants of small business viability: Leadership education, credit and financial capital, and the marketplace. Among minority business enterprises (MBEs), discriminatory barriers have often interfered with efforts to obtain access to these building blocks of business viability, specifically resulting in overly small, less profitable, and generally less viable firms (Bates, 1997).

Notably, for those MBEs that do prosper, research does not provide a clear singular cause. Even after measuring for multiple numbers of variables traditionally defined as determinative for business growth, Boston and Boston (2007) report that for SME growth, none of these variables are statistically significant. As they note, “the large number of variables reflecting personal attributes of owners, characteristics of businesses, and business strategies cannot explain the intraracial differences in high-growth and no-growth companies … This means that the real explanation behind the achievement of high-growth status lies in something that we have not yet measured” (Boston & Boston, 2007, p. 123).

However, for high-growth companies at large, some research suggests that successful growth can be attributed at least in part to a nontraditional strategic purpose for the business. Boston and Boston (2007) reference Kim and Mauborgne's (1998) findings that high-growth companies paid little attention to matching or beating their rivals, instead seeking to make their competitors irrelevant through value innovation rather than conventional competitive approaches. Porter and Magretta (2014) explain this phenomenon as the foundation of competitive advantage, arguing that one of the key aspects of value innovation is resisting the temptation to compete to be the “best” in the industry. “Competing to be the best leads inevitably to a destructive, zero-sum competition that no one can win” (Magretta, 2011, p. 24). Instead, successful competitive advantage is earned through developing unique value throughout the value chain, thus creating greater value for those being served. “Competing to be the best feeds on imitation. Competing to be unique thrives on innovation” (Magretta, 2011, p. 31).

This study, therefore, sought to shed light on possible factors that influence the success of businesses facing barriers to growth, including potential avenues for non-traditional value chain innovation.

Methods

The research study obtained approval from the Mills College Committee for the Protection of Human Subjects on 10/7/2019. ¹ Participants who agreed to participate in the research study executed an Informed Consent prior to participation. Given the study’s emphasis on strengthening and expanding the network of local entrepreneurs and manufacturing industry partners in the local manufacturing ecosystem, study participants intentionally comprised local manufacturers, ranging from premarket to growth-stage companies based in various regions throughout Oakland, including North, Downtown, West, East, and Deep East Oakland. A total of 21 participants were interviewed during 4 focus group sessions and 1 one-to-one interview. All participants were over 18 years of age and were invited to share their experiences in launching, operating, and growing their businesses. They were also asked to complete a short survey, detailing business sectors, growth stages, revenues, geographic locations, identifying demographics, and follow-up contact information for future research.

Diligent efforts were made to include manufacturers of color, women, and others facing multiple, intersecting, and compounding barriers; however, outreach was not restricted to these demographics. Participants were identified and recruited through networking and snowball methods (Creswell, 2013). The potential impacts of White-identifying or appearing facilitators’ physical presence on participant responses, particularly for manufacturers of color, were addressed by strategically coordinating focus group sessions to be predominately led by facilitators of color, which seemed to yield beneficial engagement with participants, based on observed willingness of participants to discuss sensitive lived experiences related to racial discrimination and disparate impacts.

Participant business types were wide-ranging across sectors, including: Apparel, art prints, cannabis, compression molding, stitching, drones, fabrics, space design, food and beverage, prototype design, laser cutting, screen printing, stereo, and ice cream manufacturing. Manufacturers of color facing multiple, intersecting, and compounding barriers were positively represented amongst the participant population.

In alignment with the goals of the study, participants were asked to reflect on specific prompts regarding their business ventures, experiences in founding, launching, and growing their businesses, helpful resources, particular challenges faced, and any additional insights they wished to share. Key terms, such as “common barriers, partnerships, synergies, and recommendations,” were also spoken aloud by focus group facilitators to further emphasize the study goals.

All focus group notes and recordings were manually transcribed and coded. The following categories were used to sort codes and themes in further analyzing the focus group data (Krueger, 2002): Experiences, resources (currently have/needed), challenges, anything else to share, shifts in opinion, extensive topic discussions, intense topic discussions, important session comparisons, key points/themes/big ideas, hunches, thoughts, and other factors/emerging themes.

Detailed sampling frames and methods are provided in Appendix A.

Primary Findings

Common Barriers and Enablers for Local Firms

While we invited participants ² to comment on both common barriers as well as enablers for business success, we found that major themes revolved around consistent barriers to start-up and growth. Common primary barriers encompassed challenges related to funding, resources, business education, government, price sensitivity/local sourcing, cultural traditions, labor, space, access to market, community, and business growth.

Participants consistently expressed concerns regarding funding challenges, particularly noting a lack of funding sources for smaller businesses given the tremendous cost of equipment, and a lack of culturally sensitive investors/funders to serve traditionally underrepresented businesses. Resource accessibility emerged as another significant barrier, with participants noting that technical assistance providers are inaccessible due to cost for small businesses and that these assistance providers are mainly comprised of big businesses or other support groups who are unable to address the needs of manufacturers. Participants further expressed a “lack direct connection” to the needs of manufacturers, stating that technical assistance providers are often “wildly out of touch,” do not understand the business, and lack nuance.

Business education gaps were repeatedly identified, with participants specifically noting a lack of knowledgeable mentoring and a lack of business training sufficient to meet their needs. Government relations presented additional challenges, with participants expressing concern that local government assistance agencies are neither listening to small businesses nor providing support. Participants believe there are too many rules and too much red tape to be fought through, feeling as though they are fighting the system rather than being supported by the system.

Price sensitivity and local sourcing created additional tensions for participants, who noted public resistance to paying higher prices for locally made goods yet feel compelled to invest in and support the local economy. Cultural preservation emerged as both a challenge and motivation, with participants expressing a lack of support to retain cultural traditions in business, yet believing strongly that business is an important driver in ensuring that cultural traditions are preserved.

Labor costs presented ongoing challenges, with participants expressing a strong desire to hire skilled labor and compensate them well, but also noting that payroll and benefits costs are enormous for small businesses. Production capacity limitations were evident through participants’ reports of a tremendous lack of affordable space to conduct operations. When trying to build economies of scale by contracting with established factories to share their capacity, participants reported that established firms require minimum order levels, which small firms cannot meet.

Access to market challenges were particularly pronounced for small business owners of color, who expressed significant difficulties in accessing customers. Community isolation emerged as another barrier, with participants noting a lack of community for sharing, and the discouraging trend of destructive competition between small/similar businesses. Finally, business growth fears were expressed by many small business owners who feared the challenges associated with business growth, with some larger organizations expressing a loss of joy in running the business due to the challenges of growth.

Existing Partnerships and Synergies That Can Be Reinforced

Despite the numerous barriers identified, participants also highlighted certain attitudes, approaches, and systems that they believe could significantly contribute to improving prospects for long-term viability for Oakland businesses. These included purpose and passion, social-mindedness, collaboration, mentorship, and reflection of Oakland culture.

Participants emphasized the importance of finding or rediscovering joy and passion in running the business, believing these are absolutely crucial to enabling business owners to address adversity with resilience. They further recommended that business owners engage with a sense of purpose by sharing and building upon their personal stories. Social mindedness emerged as a driving force, with the majority of business owners revealing a desire to cause positive social impact through their business. Participants ultimately argued for the need for socially driven business leaders to acknowledge the primary social aspects of their business, while also recognizing that profit generation does not diminish the social relevance of the business.

Collaboration was repeatedly emphasized, with participants noting the need to seek out and align with complementary businesses. This mindset was described as rooted in the culture of collaboration in the Bay Area. Mentorship needs were reiterated, particularly for culturally appropriate mentors in the area of business funding and financial literacy, with particular interest in nontraditional funding methods which address the specific financial challenges faced by BIPOC businesses. Finally, participants recognized the importance of Oakland culture in engaging younger-minded consumers who are open to higher prices to support equitable products and services, and emphasized consumers’ love of Oakland as driving demand for products and services that benefit the overall economy and community.

Participants’ Recommendations

Participants provided specific recommendations for entrepreneurs, government, industry, and education stakeholders. For entrepreneurs, participants explained that human connection is important in leading a small business and reiterated the vision for creating clusters ³ for in-person connection and collaboration. They advised entrepreneurs to be open and willing to do things differently than the norm, emphasizing that businesses need to stop thinking so competitively head-to-head and instead look for ways to position themselves based on their unique value propositions.

Regarding government, participants reiterated that it is crucial that government organizations support small businesses and appropriately represent the community. They called for the creation of live/work spaces to help retain small businesses amid high costs of living and operations, more affordable zoning, and making manufacturing space affordable for small businesses. For industry stakeholders, participants called for the creation of associations to give small businesses a legal voice and to identify businesses to seed appropriate clusters. They urged factories to allow for smaller minimums and for businesses as a whole to think synergistically.

Finally, for education, participants emphasized the imperative to educate the public on the need for higher prices to support the viability of specialized, organic manufacturing in Oakland, while ensuring that learning and support resources are easily accessible.

Secondary Findings

Additional Barriers and Enablers

International relations challenges emerged as participants reported that long-standing international trade barriers are impacting their potential for growth and can hinder their full use of local suppliers. These outsourcing challenges include the intricacies of supplier competition, varying labor costs, and price point marketing, with additional problems including the stealing of ideas and unethical product manufacturing practices.

Sustainable production concerns were evident as participants indicated the use of primarily international outsourcing to reduce production costs while maintaining product quality. Although participants emphasized a preference for local suppliers and environmentally friendly production methods, they noted such sustainable practices are considered too expensive, despite their potential impacts on community health. Supply order minimums were identified as “too high,” which can heavily impact sustainability outcomes.

Business education gaps were further emphasized through participants’ acknowledgment of a lack of technical understanding for some entrepreneurs who do not have a formal education in the field of business. These individuals rely primarily on their own determination and small business development-entrepreneurship advice from their mentors, while also joining networking groups and engaging in the sharing of knowledge and resources.

Additional Partnerships and Synergies

Educational partnerships that include apprenticeship and internship opportunities were identified as useful in helping emerging manufacturers further develop their business’ purpose and vision. Formal education settings were recognized as ideal for engaging future generations for the manufacturing industry, with mentorship programming highlighted as helpful to better navigate the intersecting and compounding challenges within the industry. More intentional networking connections to industry-specific networks were desired by participants, with the sharing of resources, connections, and marketing ideas deemed valuable.

Additional Recommendations

Participants recommended keeping up with trends in the marketplace to avoid becoming irrelevant, emphasizing the importance of seeking mentor advice, attending conferences, seeking design and marketing help, and risk-taking for maintaining relevancy in the marketplace. Community building was emphasized through recommendations to share business stories with others in the community to increase human and local connections and build credibility and trust. Participants suggested seeking city partnerships, small business collectives, space sharing, and mutual aid support, while also proposing developing interdisciplinary industry networks and sharing groups.

Emerging Themes

Our research revealed several key themes that extend beyond traditional business support frameworks. Collaboration and community-building emerged as critical needs, with participants noting the necessity of gaining cooperation from established businesses in partnering for economies of scale, addressing the prevalence of destructive competition among small, similarly positioned businesses, and seeking support from large industry businesses through aligned values. Many participants of color viewed the prevailing approach of larger businesses as one of small business value appropriation rather than genuine collaboration.

Social and community purpose represented another significant theme, with participants sharing their desire to invest in and support the local economy. The majority of business owners strongly emphasized their personal wish to promote societal change through the products, services, or character of their business, with social commitment serving as a primary driver of business endeavors, even when profit pressures often conflicted with that belief.

Community culture and care emerged as fundamental motivators, with many participants expressing their strong belief that businesses can be key to holding cultural traditions for future generations. Participants recognized that consumers’ deep love of the community was a key driver in demand for products and services dedicated to uplifting the local economy and the state of the community. A central finding from these considerations is that the majority of these business owners hold a strong sense of responsibility to the surrounding community, and are driven to contribute a positive impact through their business activity. Yet business owners frequently expressed frustration with the struggle to honor this community focus while adhering to their learned expectation that their businesses must be, first and foremost, profit-driven.

Discussion

As we noted prior to our study, while the factors that influence success for BIPOC-owned businesses are at present inconclusive, high-growth companies at large do show evidence of successful growth through focusing on value chain innovation over traditional competition.

We saw evidence of this type of nontraditional effort to prioritize value delivery over competition in many of the participants we interviewed. We observed that many, even without conscious recognition, operated their businesses as social ventures, with the primary goal of positively impacting their communities through their businesses, rather than competing to maximize profit for the benefit of the business owners.

This type of socially driven entrepreneurial mindset was similarly noted by Monti Jr. et al. (2007) in describing “civic enterprises”—urban, “InnerCity Entrepreneurs” who “engage in civic activities while pursuing business growth” (p. 355). These “civic capitalists” are motivated not only by a desire to start a profitable venture but they also are inspired by their family, ethnic values, and an obligation to give back to their community (Monti et al., 2007, p. 372).

When presented with the suggestion that their motivations went well beyond being profit-driven to being socially driven, many of the participants reacted with a sense of dawning realization. This is consistent with the civic capitalist mindset, where entrepreneurs pursue this mix of profit-generating and socially directed activities “in a very aggressive way even when they do not acknowledge it” (Monti et al., 2007, p. 267). Rather than having either a bottom-line focus or a “do-gooding” focus, they blend business and community improvement goals in a variety of creative ways, with the good they do sometimes by design and sometimes not.

This nontraditional approach, particularly when not an intentional and deliberate aspect of the organization's strategy, can lead to confusion regarding organizational priorities and positioning. As Monti et al. (2007) note, “The complexity of their [combined] social and economic goals, organizational practices and community activities creates dilemmas for these entrepreneurs, particularly as they grow” (p. 373). Consistent with this lack of clarity on social impact strategy, many entrepreneurs have not made as much use of their professional and community networks to attract new employees, or the capital or technological resources they need to make their ventures grow. This was borne out notably in our research by the repeated wishes expressed by participants for a sense of “community” and “sharing” with professional experts and other similarly minded businesses.

As a potential basis for addressing this lack of social strategy clarity, networking, and resourcing, we began by reflecting on the grass-roots solution that many participants reported as a means of accessing needed learning: By seeking out advice and guidance from mentors within their communities. While outside of the traditional definition of education resources, this learning path has proven instrumental in enabling many of the participants to gain many of the insights they need to continue forward.

This suggests a compelling yet under-acknowledged path for accessing learning, as well as generating capital resources, and discovering a valuable market: From within the communities of the BIPOC businesses themselves. This type of grass-roots community sharing, action, and support is reflective of the concept of “Collective Courage” by Jessica Gordon Nembhard. In her book, A History of African American Cooperative Economic Thought and Practice, Gordon Nembhard (2014) chronicles the historical and present-day impacts of “grassroots economic organizing and collective ownership” (p. 28) as strategies for economic survival in communities of color facing White supremacist barriers and economic and legislative racial discrimination.

Gordon Nembhard's work demonstrates the profound benefit to disenfranchised communities of cooperative learning, ownership, and economic investment, particularly in the face of “personal, family, social, political, and economic challenges” (Gordon Nembhard, 2014, p. 28). Gordon Nembhard (2014) confirms the recognized need for “education and training of members, leaders, and managers” and “stable and adequate capitalization and clientele” but also identifies the need for “the building of trust and solidarity among members” and “support from the community” (p. 30).

The “4th Dimension” of Need

Based on these findings, we argue that along with the three dimensions of access to capital, market, and education, a key “fourth dimension” to viability and growth, particularly for Black-owned small businesses, is a clear social value orientation. This strategic approach is characterized by a collaborative, community-oriented social impact strategy, implemented through cooperative, community-supported market engagement (Lahr et al., 2022). Given the innumerable inequities facing small, Black-owned businesses, we argue that these businesses must form cooperative alliances with one another and within the community in order to increase market visibility and community participation. Additionally, through intentional collaboration among businesses, their ecosystem, the purchasing public, and the local community, these businesses can build collaborative trust.

Conclusions

Reclamation, Restoration, and Racial Reconciliation

The economic damage in the United States resulting from racial discrimination has resounded throughout generations, demonstrating the deeply entrenched nature of systemic racism. It is crucial to recognize the historical roots of racial inequity as not just a series of past events, but as an ongoing system of deliberate economic suppression that has had multigenerational economic consequences, and which continues to define economic opportunities and social dynamics in affected communities to this day (Arellano, 2023). Therefore, in order to truly address the catastrophic effects on the human condition resulting from the entrenched systems of racial discrimination, we must introduce methods of restorative repair and atonement, and then enact societal transformation to ensure similar societal wrongs never happen again.

By recognizing racial discrimination as an integrated, self-reinforcing system (Reskin, 2012), we argue that the only way to restoratively interrupt such a well-developed and high-performing system is to very intentionally introduce a deliberate, sustained, and highly coordinated counter-system. Given the staggering magnitude of the cumulative violence, cultural erasure, and economic extraction that Black Americans have suffered under this self-reinforcing system of racial discrimination, such a counter-system must address the historical injustices embedded within our social systems, policies and processes, and challenge the societal institutions and structures which normalize, legitimize, regenerate, and perpetuate these disparities.

Reflecting on the findings and insights from our research, we conclude that fostering cooperative, solidarity-based business systems within our most vulnerable communities will seed nonextractive, equitable wealth distribution—leading to mutually-reinforcing societal systems and institutions that promote the intergenerational transmission of equitable access and opportunity. Specifically, we view cooperative economics, an economic framework that values collaboration over capitalistic competition, as an incubator for community reclamation through shared work and wealth. And we envision that solidarity economics, grounded in participatory democracy, cooperative and public ownership and a culture of unity, will further equip communities to regain control of their own economic trajectories.

Recommendations

Based on these findings from Oakland's manufacturing sector, we recommend the investigation of methods to develop intentional, community-engaged business collaboration in historically marginalized and disinvested communities. While this study's focus on manufacturing businesses in Oakland provides important insights into one critical sector, future research should examine whether similar collaborative approaches are effective across diverse business types and urban contexts. We encourage an assessment of the impact this type of collaboration has on the economic opportunities for individuals most marginalized within those communities, with particular attention to how collaborative models might be adapted for different industries, geographic contexts, and local policy environments. The goal of such expanded research would be to demonstrate replicable means of countering prevailing discriminatory systems while accounting for the unique economic and demographic characteristics that shape minority business experiences across different communities.

Actionable Steps for Stakeholders

To advance these collaborative approaches, we recommend specific actionable steps for key stakeholders. Government agencies should support community-led business incubator programs that prioritize cluster development and provide culturally appropriate mentorship, while reviewing zoning policies to create affordable cooperative working spaces. Educational institutions should develop targeted business training programs that integrate cultural traditions and social impact strategies, partnering with community organizations to ensure accessibility. Funding organizations should develop investment criteria that recognize and value social impact alongside traditional financial metrics, while creating accessible application processes for smaller businesses. These immediate steps can be implemented while longer-term research assesses their effectiveness and adaptability across different contexts.

Study Limitations

This study has several limitations that should be considered when interpreting the findings. First, the geographic scope of this research was limited to Oakland, California, a city with unique economic, demographic, and policy characteristics that may not be representative of other urban environments. Oakland's specific history of redlining, its position within the broader San Francisco Bay Area economy, and its particular mix of gentrification pressures and community activism create a distinctive context for BIPOC-owned businesses. Therefore, the findings may have limited generalizability to minority entrepreneurs operating in cities with different economic trajectories, demographic compositions, regulatory environments, or historical patterns of racial discrimination.

Second, while the sample size of 21 participants is appropriate for qualitative focus group research, it may not fully capture the breadth of experiences within Oakland's diverse business community. Given the wide range of business sectors represented in the study—from apparel and food manufacturing to technology and cannabis production, and from high-growth to low-growth—each industry segment was represented by only a small number of participants. This limited representation within each sector may not adequately reflect the full spectrum of challenges and opportunities that minority business owners face across different manufacturing industries, potentially overlooking sector-specific barriers or enablers that could be significant for targeted policy interventions.

Third, the recruitment approach using snowball and networking methods, while appropriate for reaching hard-to-access populations, may have introduced selection bias into the sample. This methodology likely overrepresented business owners who are more connected to entrepreneurship networks, business support organizations, or community advocacy groups, while potentially underrepresenting more isolated business owners who may face different or more severe challenges.

Finally, the focus on manufacturing businesses, while providing depth within this sector, limits the applicability of findings to service-based businesses or other types of minority-owned enterprises that constitute significant portions of the minority business ecosystem. Manufacturing businesses face particular challenges related to equipment costs, production space, supply chains, and regulatory compliance that may not translate directly to businesses in other sectors. Service-based minority businesses, for example, may encounter different patterns of customer access challenges, capital requirements, and growth strategies that were not explored in this manufacturing-focused study.

Future Research Directions

Future research should expand this investigation across multiple cities and business sectors to test the broader applicability of community-engaged collaborative models. Longitudinal studies tracking the implementation and outcomes of collaborative interventions would provide valuable insights into their long-term effectiveness. Additionally, research should examine the specific mechanisms through which social value orientation translates into business viability, and investigate how policy environments can be structured to support collaborative business ecosystems in marginalized communities.

Supplemental Material

sj-docx-1-rbp-10.1177_00346446251401882 - Supplemental material for In Pursuit of Restorative Justice: Insights from Marginalized Businesses in Oakland, California

Supplemental material, sj-docx-1-rbp-10.1177_00346446251401882 for In Pursuit of Restorative Justice: Insights from Marginalized Businesses in Oakland, California by Darcelle Lahr in The Review of Black Political Economy