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Minority outreach on the rise

October 31, 2008

Athena Merritt, Philadelphia Business Journal


As disparities between minorities and whites in business continue to be well documented, public and private entities are mounting new efforts to be inclusive. This special report, Minding the Gap, documents some of those efforts.


Minority-owned companies are the fastest-growing business sector in the U.S. economy, numbering more than 4.1 million nationwide, 59,064 statewide in Pennsylvania and 20,295 citywide as of the latest U.S. Census Bureau figures.


The minority population likewise is growing. Nonwhites represent about one-third of the U.S. population and are projected to become the majority by 2042 - a tilt already seen in Philadelphia where the largest single racial group, at 44 percent, is black.


The trends are ones that those who are looking to grow economies can't afford to ignore, said Ronald Langston, national director of the U.S. Department of Commerce's Minority Business Development Agency.

Nationwide, minority businesses had a $670 billion impact in 2002, a figure that has surely grown, Langston said. The buying power of blacks, Asians, Hispanics and American Indians was projected at more than $54 billion in Pennsylvania this year and is projected to hit nearly $70 billion by 2012, the Selig Center for Economic Growth at the University of Georgia said.


"If they are the fastest-growing segment, coupled with the fastest-growing population, they need to be viable, they need to be competitive, you can't ignore them," Langston said of the growth of minority companies and population.


This year, new efforts aimed at supporting minority business growth rolled out at state and local levels and in the public and private sectors, with more planned for next year.


They're needed now more than ever to address the stark disparities and barriers minorities face, according to the Urban League of Philadelphia's State of Black Philadelphia report last year and the Economy League of Greater Philadelphia report, called "Everyone's Business: Building Minority Businesses to Scale," scheduled for release today.


Both Pennsylvania and New Jersey established offices this year to increase diversity and are working to improve what many believe is one of the largest opportunities and obstacles for minority businesses - certification as a minority-owned business for purposes of doing business with the state. New Jersey's Office of Supplier Diversity has held workshops throughout this year to clear up confusion over the process, Elizabeth Lindsey, associate assistant state treasurer, said.


"Businesses kept telling us that they need to get on ‘the list' to get a contract, there's an idea floating around that there's a magical list and if you get on the list, you get a contract," Lindsey said.

Next year, New Jersey will offer online certifications to further ease the process.


"We are developing a new system that will be almost fully automated so businesses will actually submit all of their applications online that right now they are required to submit on paper," Lindsey said. "They will get a response very quickly, if everything is there, they will get a response within a few hours."

Women- and minority-owned businesses land about 10 percent of Pennsylvania's contracts and 8 percent of New Jersey's.


Certification has also been a stumbling block for women and minority firms in Philadelphia, which prompted Mayor Michael Nutter to dissolve the Minority Business Enterprise Council and replace it with the Office of Economic Opportunity established this month. As executive director, Michael Bell will develop an economic opportunity strategy by Jan. 31, which will include a plan to improve the certification process and help businesses build capacity. The Greater Philadelphia Hispanic Chamber of Commerce is also working to address the issue through seminars it hopes the state will fund.


"Many Hispanics are not aware of the opportunities out there," chamber President and CEO Varsovia Fernandez said. "It opens doors for contracts and when you go through the certification process it helps you to organize your business and it stimulates best practices."


Brandywine Realty Trust and Liberty Property Trust, two of the region's largest commercial developers, have made a concerted effort to engage minorities on their projects. Philadelphia City Council demanded more inclusion on projects at the Pennsylvania Convention Center last year. Additionally, the Enterprise Center has been working with the John S. and James L. Knight Foundation on a database that will give access to contract opportunities. By late summer it plans to open a culinary training center with retail space.

The Urban League of Philadelphia, which opened an Entrepreneurship Center this month, plans to expand customized recruitment services to more firms through additional funding it recently secured, Urban League of Philadelphia President and CEO Patricia A. Coulter said.


"If a company wanted to get help with their diversity recruiting they could call us and we would ... find out what they are looking for and craft something that meets their needs," Coulter said of the fee-based service, which has been tapped by Comcast Corp.,SunocoPrudential FinancialMorgan Stanley and Philip Morris.

"More and more [minorities] are seeing themselves as business owners," Langston said. "They are out there, they are viable, don't overlook them."