While it’s no surprise that ethnically diverse Hawaii leads the nation in the percentage of minority-owned businesses, what’s surprising is fewer than 1 percent have the certification that could help them get contracts from the government and big business.
Of Hawaii’s 120,468 businesses, 68,563—or 56.9 percent—are minority owned, according to a 2007 survey, the latest data available, released yesterday by the U.S. Census Bureau. Asian-owned businesses accounted for 47.2 percent of all businesses in Hawaii. Native Hawaiian-owned and other Pacific Islander-owned businesses accounted for 9.4 percent and was the highest of any state.
However, only 167 local small businesses are designated as 8(a) certified minority firms by the U.S. Small Business Administration. The certification gives companies an advantage in submitting bids for jobs with the federal government, said Jane Sawyer, district director of the SBA’s Hawaii district office. The federal government aims to award 23 percent of its contract money to 8(a) companies.
"It can be a marketing tool for their business," Sawyer said.
Likewise, only about 65 companies are certified as being minority owned by the National Minority Supplier Development Council, a nonprofit that connects small businesses with Fortune 1000 companies.
Some Fortune 1000 companies have agreed to spend between 5 and 20 percent of their procurement dollars with minority businesses, according to Scott A. Vowels, president of the Northern California Minority Supplier Development Council, which works with Hawaii businesses.
The National Minority Supplier Development Council said that minorities represent about 28 percent of the U.S. population, but minority businesses represent only 15 percent of total businesses and only 4 percent of total corporate purchases. The council’s goal is to increase procurement and business opportunities for minority businesses.
"We’re probably one of the best-kept secrets for minority businesses," Vowels said. He added that the council would like to help Hawaii minority businesses make connections with mainland companies. "A lot of businesses are capable of servicing not only Hawaii, but also the mainland and having a national footprint if just given the opportunity."
Jose Villa, director of Latin Business Hawaii (the Hispanic Chamber of Commerce), added that minority businesses in Hawaii are missing out on contracts that go to mainland companies with the right certification.
"Our businesses are struggling; a lot of our businesses have gone out of business, and yet here’s an opportunity where local businesses could be getting these contracts and it’s going to companies on the mainland," said Villa.
According to the 2007 census survey, Hawaii’s 56.9 percent minority-owned businesses was followed by the District of Columbia with 40.2 percent and California with 35.6 percent.
Nationally the percentage of minority-owned businesses jumped 45.6 percent to 5.8 million between 2002 and 2007, more than twice the national growth rate for all U.S. businesses, according to the report, which is conducted every five years as part of the economic census.
The 2007 survey is based on data collected from a sample of more than 2.3 million businesses nationwide.