Minority Entrepreneurs Embrace the Internet – But Barriers Block Complete Integration.

Larger minority-owned businesses use Internet technology to enhance their firms, but often do not fully engage in e-commerce due to market challenges and barriers, a new report prepared by the Tomas Rivera Policy Institute (TRPI) states.

The report, “Minority Businesses’ Use of Internet Technology,” was commissioned by the U.S. Department of Commerce’s Minority Business Development Agency (MBDA), Wells Fargo and QWEST Foundation. According to the report, more than 60 percent of the minority businesses surveyed recognized and understood the benefits of e-commerce, and up to 91 percent of the businesses were connected to the Internet.

The study focused on 1,673 Latino, African American, Asian and Pacific Islander and Native American-owned firms with more than $500,000 in annual revenues. On average, these companies generated annual sales between $3.3 million and $4.9 million. Dun & Bradstreet Corp. provided the national data file of minority-owned businesses that was used to select the sample.

“The report indicates that the majority of the businesses surveyed have computers, access to the Internet and Web sites at rates similar to those of majority-owned businesses,” said the report’s author and TRPI’s director of economic research, Dr. Waldo Lopez-Aqueres. A much smaller number of large minority-owned firms are engaging in online sales (10-13 percent).

The study suggests that minority businesses are under-investing in e-commerce technology. Many of the firms have a large minority clientele who are not as likely to have computers or Internet access as majority households. Others (20-24 percent) said their product does not lend itself to e-commerce. Technology costs limit other businesses from launching Web sites or upgrading current sites, the study shows.

“Government and the private sector use of e-commerce for purchasing and selling continues to grow at a rapid rate,” said MBDA national director Ron Langston. “To successfully compete in this economy, minority businesses must embrace technology and e-business strategies.”

MBDA will use the results to increase Internet access and e-commerce among larger minority-owned firms. In addition, the report’s findings will be used in the development of MBDA’s Minority Business Internet Portal, which is scheduled to be available to the public in September 2001.

Wells Fargo vice-president Tim Rios said, “The bank will use the report’s findings to better understand minority use of the Internet. Wells Fargo has long been committed to understanding the needs of all small business owners. There is constant learning from our research that helps us fine-tune the services we offer our minority business customers.”

Founded in 1985, the Tomas Rivera Policy Institute, an affiliate of the Claremont Graduate University, was established as a nonprofit organization to conduct and disseminate objective, policy-relevant research and its implications to decision makers on key issues affecting Latino communities. Under the guidance of President Harry P. Pachon, Ph.D., TRPI has evolved into the country’s premier research institute on Latino issues, garnering national recognition for its work in the fields of education, immigration policy, information technology and civic and social research.

For more information or for a copy of the study at http:://www.tpri.org