The 1936 Randolph-Sheppard Act As a Model of Business Incubation for Entrepreneurs Who Are Blind: Can It be Generalized to Other Populations?

Background & Purpose: In 1936, in the middle of a period of intensive development of federal programs addressing issues of social welfare, The House and Senate passed the Randolph-Sheppard Act of 1936. This act gave priority to entrepreneurs who are blind to own and operate businesses in federal office buildings, national parks, and other federal properties. Subsequently, each state created structures to implement the Act and to assist entrepreneurs who are blind to take advantage of this opportunity, including in most instances creating the same opportunity in state-owned properties. This focus on assisting a social welfare population to engage with the market through business creation is historically a unique model. Today this approach would be considered an example of social enterprise incubation on a large scale. It has the potential to provide a model for additional populations of people with disabilities, people who are poor, and economically excluded communities to build individual and collective wealth through business development. This paper gives an initial report of the authors’ research on the implementation of this Act. Although initially many of the businesses were small newspaper and cigarette shops in federal buildings, today many of the businesses are vending machine businesses on federal and state properties.

Methods:

The research includes review of historical documents, internal reports and evaluations by state agencies, semi-structured interviews with officials responsible for the current implementation of the Act, and entrepreneurs who are operating businesses under the Act, and visits to some of the businesses.

Results: This is currently in-process research. The paper will be an initial report on the data from New York State, which provides the foundation of a national study. The paper will discuss the models used to provide business training and ongoing support of the entrepreneurs, compared with other models of business incubation in social enterprise from the authors’ prior research and publications on business incubation. Additional comparison includes business models, business plans, accommodations made in the business plans for conditions or situations that can affect business success, how the businesses are capitalized, the average time to financially break-even, and models of ongoing business support. The Act’s implementation will be compared and contrasted to contemporary models of business development, such as inclusive entrepreneurship.

Conclusions, & Implications: There are various models of business development and market involvement for social welfare populations utilized today, including Work Integration Social Enterprises; Social Cooperatives, consumer-run businesses, and other forms of business incubation. However, the Randolph-Sheppard act has been under-studied and may provide opportunities to learn from a consistent 85 year program that has succeeded through different economic periods and social policy regimes. More specifically, can the model be generalized to other populations. For example, it is common for economically excluded populations to start informal businesses – businesses that are providing economic support for the owners and their families, but which are not formally incorporated and so limit the opportunities to leverage them to build wealth. Can the Randolph-Sheppard act provide insights and models for formalizing such economic activity?