Skip to main content Accessibility help
×
Hostname: page-component-848d4c4894-8bljj Total loading time: 0 Render date: 2024-07-05T05:09:43.824Z Has data issue: false hasContentIssue false

8 - Minority Business Assistance Programs Are Not Designed to Produce Minority Business Development

Published online by Cambridge University Press:  18 December 2009

Timothy Bates
Affiliation:
Professor of Labor and Urban Affairs, Wayne State University
David M. Hart
Affiliation:
Harvard University, Massachusetts
Get access

Summary

Minority business enterprises (MBEs) have been expanding rapidly in size and scope in recent years. Public policies seeking to promote MBE development have sometimes contributed to this growth process. Yet government has generally preferred to pursue assistance strategies that generate little entrepreneurship. Lending programs targeting overcrowded, low-profitability lines of business have been particularly widespread. Tiny loans flow to marginally viable firms; consequent high loan-default rates erode the capital available. The U.S. Commission on Minority Business Development put it well: “Minority firms seem to be gaining ground in a system that perpetuates their relegation to areas of business endeavor that are among the most crowded and least profitable” (1992: 24).

The contrast between high MBE growth and misdirected assistance policies is striking. This apparent paradox can be resolved by understanding the dichotomy between low-growth “traditional” MBEs and high-growth “emerging”MBEs. Although the latter generate most of the job creation and economic development, the former receive most of the government assistance. Unfortunately, as this chapter will show, most MBE assistance programs are flawed in intent, design, and implementation; they are designed to fail. There are a few success stories, however. This chapter will identify effective strategies for assisting minority-owned businesses and provide concrete examples that demonstrate that they work.

As long as minority entrepreneurs are thought of as the walking wounded of the small business world, minority entrepreneurship policy will be misdirected. Programs frequently fail because they ignore the factors that determine and shape small business viability.

Type
Chapter
Information
The Emergence of Entrepreneurship Policy
Governance, Start-Ups, and Growth in the U.S. Knowledge Economy
, pp. 155 - 172
Publisher: Cambridge University Press
Print publication year: 2003

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Save book to Kindle

To save this book to your Kindle, first ensure coreplatform@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×