Reagan unveils ambitious plan to spur growth of US minority businesses
Civil-rights and black-business spokesmen say they are impressed by President Reagan's plan to radically revitalize America's minority businesses, but they're not convinced that he can carry it out in a ''recession economy.''
Flanked by cabinet members, minority business leaders, and federal agency heads, the President unveiled his new program Dec. 17.
Successful minority enterprise is a ''major element of our economic recovery program,'' said President Reagan. He listed as key goals:
Long range. Creation of 60,000 new businesses and encouraging the growth of another 60,000 existing minority firms during the next 10 years.
Short range. Federal government procurement of $15 billion in goods and services, and federal assistance in the form of $1.5 billion in credit aid and $ 300 million in management and technical aid to help minority firms develop during the next three years.
Immediate action. Revamping the Minority Business Development Agency (MBDA) of the US Department of Commerce to implement these goals. Additional help will come from the independent Small Business Administration. The issuance of a new executive order on minority business development ''to assure the success of these federal initiatives.''
The Reagan administration has a ''great deal of ability to make things work, '' responds Gordon Alexander of the NAACP Black Business Advocacy Group and head of his own technical consulting firm. But he warns of ''unknowns'' in the President's proposal.
''The economy must be strong enough to accommodate new firms,'' he says. ''And real business opportunities must be available in both the public and private sectors. At present there is no clear evidence that the economy could absorb 60,000 new businesses in the next decade.''
Subcontracting is among the ''best ways'' to develop a working relationship with a major firm, adds Mr. Alexander. ''Good performance and contract relationships are the key to potential development of minority firms,'' he says.
The key agency in the implementation of the Reagan program is MBDA, now in the process of opening 100 one-stop service centers, designed to cut down the time and bureaucratic red tape involved in helping minority firms. Theron J. Bell, MBDA deputy director, detailed his agency's program as he opened one of the centers Dec. 8 in Boston. The centers focus on:
* Encouraging private corporations to do business with minority firms. Each center will try to encourage major corporations to commit themselves to offer management and technical assistance to minority firms.
* Coordinating federal, state, and local efforts with the private sector in doing business with minority firms.
* Creating an inventory and profile of minority firms around the nation, including their capabilities and specialties.
''Greater economic independence for minority Americans will best be achieved through increased opportunities for private employment and business ownership,'' Mr. Reagan said at a White House press conference.
The first full week in October 1983 will be declared ''Minority Enterprise Development Week'' each year, he said. And he added that he has directed federal contracting agencies to increase minority business procurement objectives for 1983 by 10 percent over 1982.
Reagan listed other actions: department and agency heads are to develop incentives to encourage federal contractors and grant recipients to utilize minority firms in subcontracts; the Cabinet Council on Commerce and Trade is to submit an annual plan on minority enterprise development for each agency; the Vice-President's Task Force on Regulatory Reform is to explore the reduction of barriers to small business expansion.
The Reagan program can provide what minority businesses need - venture capital, improved management, and contracts not only with government, but in the mainstream of the private sector, says James H. Lowry, president of James H. Lowry and Associates.
Earlier this year Dr. Lowry produced a study, ''Minority Business Enterprise Development in the 1980s,'' for MBDA. The report noted, ''Despite more than a decade of federal government assistance, minority business is still a depressed industry.''
In an article in its June issue analyzing its list of the ''Top 100 Black Businesses,'' Black Enterprise magazine termed the status of minority businesses ''cloudy.'' Noting that black business has quadrupled in the past decade, the magazine said it is also ''underdeveloped.''
Minorities comprise 20.5 percent of the nation's population, but own only 3.8 percent of all businesses, collect 0.5 percent of total receipts, and provide 0. 6 percent of all jobs, the studies by Lowry and Black Enterprise revealed.
Earl G. Graves, the publisher of Black Enterprise, noted that growing ''political clout'' is one of the factors favoring minority businesses. He writes:
''I must say that more than 'jawboning' by the federal government will be needed to bring results.''
He referred to the reluctance of many private firms to use the services or products of minority firms, calling some ''disinterested or downright hostile.'' Most minority firms prefer, however, to do business with the private sector, he added.