Minority-Owned Businesses

Set-asides were first created in 1953, when the U.S. government passed a law that set aside five percent of all procurement contracts for small businesses owned by socially and economically disadvantaged people. The SBA has defined and redefined the term "socially and economically disadvantaged" many times since then by adding different groups and deleting others. The core group under the original law included Black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, and other minorities.

By the early 1970s, the U.S. government passed a series of regulations and laws designed to ensure that private contractors with lucrative government contracts set aside a small percentage of their work for assignment to subcontractors owned by individuals from "socially and economically disadvantaged" backgrounds. Regulations in some government agencies were written specifically in an attempt to assist minorities requiring a specific percentage of participation by these minorities. The theory behind these laws was that when public money was being spent, all citizens should have an equal right to compete for contracts, and that minority- and women-owned companies needed special assistance to compensate disadvantage and secure reasonable opportunities to bid successfully. In ensuing years, it became clear that such programs were a tremendous boon to many minority-owned businesses.

By the 1980s and 1990s, though, critics of affirmative action and set-aside policies argued that minority-owned businesses were coming of age and could compete in the mainstream economy. In fact, they said, "setasides" impede minority-owned businesses' chances of success, because companies came to depend on them to the detriment of seeking contracts through competition. Finally, some critics contended that such policies discriminated against white business owners. Although once these policies were seen as a way to redress past discrimination, many now characterize affirmative action programs as reverse discrimination.

Many researchers and minority entrepreneurs reject these arguments, however. They point out that revenues of minority-owned businesses still fall short of those found in comparable white-owned firms. Finally, many supporters of affirmative action programs contend that "public policy drives private behavior," and that any government decision to tear down programs designed to help minority-owned businesses would serve as a sort of tacit approval for companies to return to discriminatory behaviors in which they engaged in the past.

SOURCES OF ASSISTANCE

Minority entrepreneurs have several sources of assistance that they can pursue in building and expanding their businesses. The U.S. Small Business Administration is a source of many programs designed especially for minority entrepreneurs, programs designed to aid small businesses with everything from finding startup funding to bidding on government contracts and learning how to write a business plan. The SCORE program—which stands for service corps of retired executives—is another program overseen by the SBA and designed especially for small businesses, among them, minority-owned small businesses.

Several organizations have also been developed to help minorities in the world of business. They include:

National Black Chamber of Commerce (1350 Connecticut Ave. NW, Suite 405, Washington, DC 20036, phone 202-466-6888),

U.S. Pan Asian American Chamber of Commerce (1329 18th St. NW, Washington, DC 20036, phone 202-296-5221)

U.S. Hispanic Chamber of Commerce (2175 K Street, Suite 100, Washington, DC 20037, phone 202-842-1212),

National Indian Business Association (1730 Rhode Island Ave., NW, Suite 1008, Washington, DC 20036, phone 202-223-3766),

National Association of Minority Contractors (666 11 Street NW, Suite 520, Washington, DC 20001, phone 202-347-8259),

National Minority Supplier Development Council (1040 Avenue of the Americas, Second Floor, New York, NY 10018, phone 212-944-2430)

National Association of Women Business Owners (8405 Greensboro Drive, Suite 800, McLean VA, 22102, phone 800-556-2926).

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