Bert Caldwell: Minority businesses need a bigger boost

Minority-owned businesses still trying to recover from the blow of Initiative 200 have formed a new organization backers hope will help members more fully participate in Washington’s economic resurgence.

The Multi-Ethnic Business Alliance (MEBA) unites, for the first time, minority business groups on both sides of Washington concerned about their negligible — and diminishing — share of state contracts. For a state proud of its diversity, international connections, and strong support for women in public office, the statistics are embarrassing.

According to the Washington Office of Minority and Women’s Business Enterprises, or OMWBE, minority-owned businesses captured just $21.6 million in discretionary state purchases of goods and services in fiscal 2005. That’s .76 percent of a total $2.8 billion for construction, architecture, engineering, professional and other services, as well as purchased goods. Women did only slightly better; $33 million, or 1.17 percent.

Members of minority groups comprise more than 20 percent of Washington’s population. Women, well, guess.

After the passage of I-200 in November 1998, but before it took full effect, minority- and women-owned businesses each garnered more than 4 percent of state contracts. Meager enough, and the trend is worse.

I-200 eliminated the preferences shown minority- or women-owned businesses in the awarding of state or local government contracts. Most governments dropped the guidelines almost immediately following passage of the initiative, although some school districts and universities continue to weigh ethnicity in admission decisions. The U.S. Supreme Court said Monday it would hear two cases, one from Seattle, contesting the legality of such preferences.

Organizers say MEBA was formed last month to raise awareness of minority business issues, to build partnerships with the majority business community, and to develop new strategies for doing business with the Olympia. They want to see minorities capturing an additional $70 million annually in state business within two years.

Ben Cabildo, executive director of Spokane-based AHANA, is the chairman of the new organization. David Tyner III, president of Tyrisco Insurance in Seattle, is the vice chairman.

Cabildo says minority-owned businesses are growing, but at a slower pace than their non-minority peers. “We need to be part of the equation for economic development,” he says.

Tyner says many former partners dropped their association with minority businesses quickly following I-200 passage. Yet, a thriving minority business community is good for everyone, he says, including the non-minority workers who comprise more than half the payroll at many minority-owned companies.

Tyner sees the best near-term opportunities for those offering professional services like architecture and engineering.

Both say minority business owners must do a better job communicating with each other, and building leadership, in addition to reaching out to the broader business community. Not to mention officials in Olympia.

“They say they’re going to address the problem,” Cabildo says. “They’ve been saying that for a long time.”

Carolyn Crowson, OMWBE director, says state government is listening. An effort is under way to identify policies or regulations, some of them federal, that may impede state business relationships with minorities and women, she says. Most departments have set goals for minority contracting, but all except her own are far short of those targets.

Crowson says the state can improve its performance, but businesses, minority or majority, must be competitive. Unfortunately, she adds, qualified minority businesses are often overlooked as good partners.

State officials are intent on changing that, she says.

“We’ve got the ball rolling,” Crowson says. “I think things are going to get better.”

They could hardly get worse. Preferences may not have been the answer, but Washingtonians seemed to have abandoned all care for minority businesses without the depth of experience, contacts or capital to match up with long-established competitors. That’s poor thinking.

Former Spokane Mayor John Powers, now president of the economic development group enterpriseSeattle, last month told a minority business gathering that diversity makes Washington a stronger global player.

“Difference can make all the difference when you’re out there competing not with Oregon or Colorado, but with Dublin, Dubai or Taipei,” he said.

Olympia must find a way to be different.