The Commerce Department has embarked on a novel reorganization of its minority enterprise programs to aid previously ignored medium-sized firms, but the plan ultimately could hurt 98 percent of minority businesses, the head of a leading minority business association charged.
Dr. Berkeley G. Burrell, president of the National Business League, said that the plan, still in draft form, would not receive the "the popular support" of minority enterprises or trade associations because it would exclude almost all minority businesses because they are small. The Commerce Department denied the accusation.
The proposal is the partial result of a Commerce Department study which concluded that the government's rrograms to aid minority firms have hindered minorities in developing healthy businesses because of unfocused leadership and programs, misallocation of resources, and confusion and misplaced emphasis on small "Mom and Pop" businesses with low potential for growth, profits and employment of others.
The proposal recommends creation of a new agency headed by an assistant secretary and is a signficant departure from past programs. While assisting small businesses, it also would focus attention on more profitable medium-sized minority firms which government programs basically have ignored.
while small in comparison to majority firms, medium-sized firms are defined as those with goss receipts exceeding $1 million annually.The Commerce Department estimated there are 8,000 such firms among 400,000 minority businesses.
"Dr. Burrell has totally misrepresented the study," said Assistant Commerce Secretary for Policy Jerry Jasinowski. "The effort is not to decrease the emphasis on small firms. We want to build on that and expand minority business enterprise beyond that . . . to bring minority enterprise into the mainstream."
The proposal would create a Minority Enterprise Development Administration combining and increasing the $58 million budgets of the Office of Minority Business Enterprise and the Inter-Agency Council.
The Small Business Administration and the Commerce Department have duplicated efforts and have engaged in infighting over who will have greater authority over minority business, the Commerce report said.