Originally appeared July 18, 2001, in the Chicago Free Press.
HAS ANYONE EVER DONE any research on gay entrepreneurship? It seems not. Yet the role of gays and lesbians in starting and developing small businesses would seem to be a significant aspect of our community's structure and its potential for stability, growth and empowerment.
In recent years entrepreneurship has become an important research topic in the economics profession. Black entrepreneurship has been studied as contributing to material prosperity and social equality for African-Americans. The same is true of women's businesses.
But no one, neither economists nor anyone else, seems to have studied gays and lesbians who notice potential business opportunities and take the risk of exploring and developing them by starting a business and offering a product or service for sale.
Even a recent 300-page book ostensibly on "the economic lives of lesbians and gay men" has little to say on the topic. The author seems oddly uninterested in the possibility that gays might more likely be economic risk takers or that gay businesses might provide social and economic benefits to the community simply by existing.
Yet gay-owned businesses are important to our community. Within any sizable gay enclave there are not only gay-owned bars, but gay restaurants, catering services, bookstores, health clubs, bed and bath shops, hair salons and barber shops, print shops, tanning salons, flower shops, card shops, clothing stores, leather goods stores, photographers, computer service providers, and a host of others-including gay newspapers.
To see why gay and lesbian entrepreneurs are important consider what they provide to the gay community and the community at large.
Gay businesses help root and develop the gay community. Just as gays often are urban pioneers, moving into decaying neighborhoods to help spark their revival, so too gay entrepreneurs, early to notice that migration, may be among the first to move in and begin providing products for those new residents.
They help bolster the economic base of the community, filling empty storefronts, encouraging other businesses to move into the area and augmenting the tax base which provides influence with city officials.
Gay business owners improve the social environment of the gay enclave by pressing for street safety, demanding adequate police protection, promoting neighborhood cleanup, demanding improved public services or securing private alternatives. This in turn lures more gay residents, further developing the neighborhood.
And, of course, just by having gay-owned businesses, gay entrepreneurs provide a kind of psychological comfort for other gays who can feel that the area is friendly because the business owners share common concerns and might take an interest in their needs as residents and friends as well as customers.
Equally important, for the entrepreneurs themselves starting a business is a way of seeking psychological as well as financial autonomy. It frees them from the worry about being treated unequally because they are gay.
And starting a business can tap creative energies and generate greater economic productivity. That in turn could produce a strong sense of self-fulfillment. Self-fulfillment may be a private good, but the economic productivity has public benefit.
But all this raises a number of questions.
Are gays and lesbians, with their experience of social hostility and their need for psychological autonomy (and their lack of a dependent family) more likely to be risk-takers and entrepreneurs? Or does lingering homophobia disproportionately pressure them to seek economic independence?
How did gay entrepreneurs decide what kind of business to start? Was it a business they already worked in and knew, or a dream they had long deferred or something they simply saw as an unmet need and a potential niche in the market?
Why did they decide to locate in the gay enclave? Were rents initially lower? Did they already live nearby or decide to move nearby? Are gays and lesbians a primary market for their product or service? Did they want to feel a greater part of the gay community?
How long did starting a business take from plan to opening? How much delay was there in obtaining the necessary city permits, inspections, approvals, and so forth? How much did the formal process cost-the licenses, fees, legal paperwork, payoffs and political contributions ("facilitation fees") to city officials? How significant a factor were business, real estate and sales taxes?
Did they have problems with hostile city inspectors, complicated and out-of-date (and often contradictory) building codes and antiquated zoning laws often designed to frustrate economic development? One business owner told me a city official initially refused to register the name of his store. Another said zoning variances could be bought for a price. Inspectors sometimes want to be bribed.
How does being a gay entrepreneur, paying business taxes, managing personnel and dealing with government regulation affect the entrepreneur's political and social outlook? Are his or her previous views changed by the entrepreneurial experience? If so, how?
No one is looking at these things. And because they are not we are probably underestimating the importance of gay entrepreneurs and how we could help them help our community.