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Minority-owned businesses: a look ahead.

According to the 1987 census, between 1977 and 1987 the number of minority-owned firms increased dramatically. Asian American-owned firms increased 394%; Native American-owned firms 401%; Hispanic-owned firms 93% and Black-owned firms increased 84%. Cumulatively, these firms generated over $77 billion in gross receipts. These statistics correspond to over 1,213,570 minority-owned businesses which, in addition to providing salaries for over 300,000 proprietorships, provided paid employment for 836,000 people. The most important theme in the revitalization of the American economy is job creation.

As an example of how things would be if we were to truly utilize America's minorities, the state of Maryland prepared a "What-if" scenario for the commission to indicate on a one state basis what would happen if Maryland's minority-owned business were as big as the nation's non-minority-owned business.

We lead the world in productivity even though 20% of our population is not fully productive. As we said in our interim report, if we are able to transform an estimated 50 million people (20% of our population) consisting largely of minorities into a positive and contributing national resource, we can add hundreds of billions of dollars to our Gross National Product. At no other time in American history has the full utilization of all sectors of our economy been more relevant and vital.

To accomplish this feat and to keep America leading the world, the President and Congress must work hand in hand to establish and enforce policies which provide positive incentives to the public and the private sector. We propose solutions in this document and it is up to all of us to guarantee our future.

In most quarters of America, when the discussion in the media turns to the economy, the picture of doom and gloom permeates the landscape. The media continues to put forth the perception that America is rapidly losing its place as the leader of the world. However, according to Business Week, "America still remains the premier economic power, despite its indebtedness to the rest of the world, its trade and budget gaps, and its stark contrasts between rich and poor." In current dollars, U.S. Gross National Product totaled about $5.5 trillion for 1990. In absolute terms, the U.S. still leads the world in productivity.

We have taken bold steps with the Commission's final report. In the introduction alone we say that we did not prepare this report to "inspire neutrality." Indeed, we are certain that this document will bring forth charges that we are anarchists, that we are attempting to abolish Federal minority business development programs and that we are placing all existing minority business development programs in jeopardy. On the contrary, our mission is economic development and the full incorporation of an underutilized population into the mainstream of an economic system that will benefit all Americans. We fully acknowledge the failure of predecessor government programs while admitting that Federal programs are still necessary to create a level playing field. We also acknowledge the existence of business development entities created by the government which need to be reorganized or revitalized to achieve their original intent.

Following the swearing-in of members of the Commission on Minority Business Development at the White House in March 1990, we embarked upon a two-year mission to collect and synthesize as many views of a representative sample of the American people as possible. After 100 cities in 42 states, 500 witnesses and tens of thousands of pages of testimony, our final report does not purport to represent the absolute or ultimate statement on minority business development issues in America, for those issues are dynamic ones - but it does represent the opinions and input of a microcosm of the historically underutilized business community.

The findings and recommendations contained in the report could only have been ascertained through an independent review of government policies and practices, studies and reports, legislation and operating procedures. This kind of objectivity can only be derived from input from those individuals who are out there every day where "the rubber meets the road" and cannot be derived merely from any one area or region in this nation.

The United States has historically been a model for the world because of our free enterprise system with emphasis on entrepreneurship and innovation. Today, however, America has lost ground and momentum in these critical areas. There is no focal point nor national policy to promote entrepreneurship - it is taken for granted. Financing and equity capital needed for the growth of small businesses is becoming increasingly more difficult to obtain and entrepreneurship without "access to capital cannot thrive."

One of the many recommendations proposed by the Commission is to restructure the provisions of the Community Reinvestment Act to permit banks to provide loans to existing and aspiring minority entrepreneurs to grow or start a business. Growth opportunities resulting in precious jobs are diminishing at an alarming rate, while the economy is further burdened by high unemployment, a spiraling crime rate and fewer educated Americans. Foreign competition is on a historic increase which makes it more difficult for American businesses to price products and services competitively, both domestically and internationally. Nowhere is this more alarming or more devastating than among America's minority population.

It is predicted that within another 20 plus years, our society will have transformed itself into a workforce consisting mostly of women and multiple ethnic groups. Training and, in many instances, retraining, are critical to maximize the potential of the growing labor pool. Any segment of our population that is unproductive, unskilled and uneducated imposes a phenomenal burden on everyone else. Exclusion of a few is a losing proposition and every element and individual within this nation must be mobilized and utilized.

A serious shortage of minority entrepreneurs exists and this creates an overall societal problem affecting families, neighborhoods and the nation as a whole. Moreover, the lack of businesses results in increased unemployment and crime in the immediate neighborhood areas, more so than any where else. All of these factors negatively impact America's economic condition.

If, on the other hand, we are able to transform an estimated 50 million people (20% of our population), consisting largely of minorities and other disadvantaged persons, into positive and contributing national resources, we can add hundreds of billions of dollars to our gross national product. We can also minimize the financial drain of welfare and other subsistence program by allowing taxpaying citizens who had been dependent upon government programs for survival to become viable.

According to our Commission Chairman Joshua 1. Smith, "Civil rights without economic strength is a borrowed event. It can be taken away at any time. "In support of that strength-building process, we must create an American theme to "minority business development" not a minority segment" of American business. Successful minority businesses will never evolve until public and private sectors stop viewing them as social causes" and start treating minorities in business as "legitimate partners" and "competitors." The majority of our community still perceives minorities in business in a social context, as simply beneficiaries of affirmative action programs and civil rights campaigns. Yet, over time, affirmative action and equal opportunity programs have helped to create decision-makers and business leaders among minorities and women throughout all levels of government and the private sector. As a result, a new generation of entrepreneurs from these groups has evolved which has the management experience, the technical skills and the capability to be successful in business. Fledgling minority entrepreneurs now need access to opportunities because what is good for minorities in business is also good for America.

John R. Winston is the Special Assistant to the Chairman of the U.S. Commission on Minority Business Development.
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Title Annotation:From the U.S. Commission on Minority Business Development: 1992 NSPA National Issues Conference
Author:Winston, John R.
Publication:The National Public Accountant
Article Type:Transcript
Date:Jul 1, 1992
Previous Article:Appeals in the 1990s: "new directions." (From the IRS Appeals: 1992 NSPA National Issues Conference)
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