For minority and women-owned businesses, there’s good news and bad news.
First, the good: The Department of Commerce’s Minority Business Development Agency, which is “dedicated to the growth and global competitiveness of U.S. minority-owned businesses,” reported in June that it helped minority-owned businesses earn more than $3.6 billion in contracts last year. The report adds that the agency helped to create or maintain 16,730 jobs. That’s the highest mark in the MBDA’s history.
From 2009 to 2012, the agency has assisted minority-owned businesses obtain more than $14.5 billion in contracts, and creating or maintaining more than 33,000 jobs. Those numbers represent the best four-year stretch in MBDA history.
MBDA national director David A. Hinson said upon the report’s release that it “illustrates the crucial role MBDA plays in helping U.S. minority-owned businesses grow and expand globally, particularly because of the quantifiable return on investment and impact these business have on our economy.”
Now the Bad News: MWBE’s Share of Government Work Still Lags
Now, the not-so-good news: According to an August report by Bloomberg, of the $98.2 billion in contracts given by the government to small businesses in 2012, Hispanic-owned business garnered 8.4 percent ($8.21 billion) and black-owned businesses got 7.2 percent ($7.1 billion).
These numbers lag behind population statistics. Hispanics make up 17 percent of the U.S. population, and blacks make up 13 percent, according to the United States Census Bureau. Black-owned business contracts decreased 6.5 percent from 2010, and Hispanic awards dropped 4.4 percent.
Federal budget cuts as part of the sequestration — expected to reduce government spending by $85 billion this year — have contributed to the decrease, according to Ruth Sandoval, president of the National Hispanic Business Group.
She told Bloomberg that immigration issues could also be connected to the Hispanic numbers decreasing. “We had a difficult time getting in to begin with,” she said. “When you’re talking about such a small piece of the pie as we are given, it’s sad to see that we are going backward.”
Harry Alford, CEO of the National Black Chamber of Commerce in Washington, D.C., has taken it a step further, encouraging small business owners to explore work overseas. “Is it worth the fight, or should you go and find business elsewhere?” he said. “I don’t see a lot of people smiling who do business with the federal government.”
Possible Solutions in the Public, Private Sectors
There are several ongoing efforts to help businesses owned by historically disadvantaged populations get a leg up. Among them: Initiatives to help identify MWBE opportunities to fulfill state contracts.
More importantly, perhaps, are efforts in the private sector. Groups of venture capitalists have popped up across the nation to help fill the void, and various companies and professional firms have made it a priority to help minority businesses with advice and connections.
TBWA, an international advertising agency, recently announced the appointment of Doug Melville to the newly created role of chief diversity officer for North America. In addition to fostering diversity within TBWA, Melville has been active in helping educate small business owners about how to succeed in the digital world.
His “Digital Breadcrumbs” strategy, featured recently in a segment on Fox Business, includes advice on how to brand your company for success and how to organize an effective digital campaign, for example.
Such innovative efforts might go as far as government set-asides in helping to level the playing field.