Monday, December 14, 2009

Latest Disparity Data shows no Gains to ALANA Businesses

Minnesota’s Performance in Using ALANA Businesses Bruce P. Corrie, PhD In 2000 the Governor’s Working Group on Minority Business Development documented the use of ALANA businesses in the state as recorded in the existing disparity studies in the state. The report can be found at http://www.ethnictrends.info. The report found that out of state procurement during that period totaling $2.2 billion, just $36 million were awarded to ALANA businesses or 1.6 percent of the total procurement. Analysis of the latest disparity data of the state in 2009, paints a similar picture. Of a total of $3.3 billion in state contracts, ALANA share was $36 million or 1.08 percent.

Minnesota's Statutes to Jump Start Small Businesses

Bruce P. Corrie, PhD www.ethnictrends.info

There are core policy proposals that have been suggested to grow small and minority businesses. The good news is that Minnesota does not have to create new laws – it has Statute 16C.16 already in place. What it can do is to fill in the critical gaps within these policies.

The legislative web site refers to a statute as, "a compilation of the general and permanent laws of the state, incorporating all new laws, amendments, or repeals of old law."

So there is an aura of permanence about this statute. Let us see how it stacks up against some commonly suggested policies to use small and minority businesses in the state.

Common Policy Proposals (Many of these were recommendations to the State provided by the Governor's Working Group on Minority Business Development in 2000 after statewide hearings and analysis of public procurement policies. See www.ethnictrends.info for the document):

1. Set aside a percentage of public procurement dollars for small and minority businesses.

2. Set goals for utilization of small and minority businesses in public contracts.

3. Provide technical assistance for small and minority businesses bidding on public contracts

4. Provide a simple central certification for small and minority businesses in the state across all entities at the federal, state and local level.

5. Break up large contracts into smaller ones that is within the capacity of small and minority businesses to bid on.

6. Assistance for small bidders who cannot compete with large firms which get special rates on large orders from suppliers.

7. Assistance with bonding and insurance requirements,

8. Quick payments for services done.

9. Reduce onerous paperwork needed to do business with the government

10. Set up mentoring programs, joint bidding, apprenticeship and other programs to grow small and minority businesses and prepare people for the future workforce needs of the state.

11. Provide easy access to RFPs and documents needed for the development of bids.

12. Provide information on upcoming projects at an early time so that small and minority firms can make plans to bid on such projects or develop joint bids.

13. Hold public officials accountable to meet utilization goals.

MINNESOTA LAWS IN PLACE RELATIVE TO THE ABOVE POLICY PROPOSALS

1. Set aside a percentage of public procurement dollars for small and minority businesses.

MINNESOTA STATUTES ALLOWS 25 PERCENT OF STATE PROCUREMENT TO BE DEDICATED FOR SMALL BUSINESSES.

16C.16. Subdivision 1. Small business procurements. (a) The commissioner shall for each fiscal year ensure that small businesses receive at least 25 percent of the value of anticipated total state procurement of goods and services, including printing and construction….

..(b) The commissioner must solicit and encourage Minnesota small businesses to submit

responses or bids when the commissioner is entering into master contracts. If cost-effective, when entering into a master contract, the commissioner must attempt to negotiate contract terms that allow agencies the option of purchasing from small businesses, particularly small businesses that are geographically proximate to the entity making the purchase.

Subd. 3. Professional or technical procurements. Every state agency must for each fiscal

year designate for awarding to small businesses at least 25 percent of the value of anticipated

procurements of that agency for professional or technical services.

TARGETED BUSINESS

Subd. 4. Targeted group purchasing. The commissioner shall establish a program for purchasing goods and services from targeted group businesses, as designated in subdivision 5. The purpose of the program is to remedy the effects of past discrimination against members of targeted groups. In furtherance of this purpose, the commissioner shall attempt to ensure that purchases from targeted group businesses reflect a fair and equitable representation of all

the state's purchasing.

2. Set goals for utilization of small and minority businesses in public contracts.

MINNESOTA STATUTES ALLOWS GOALS FOR THE UTILIZATION OF SMALL AND MINORITY BUSINESSES IN PUBLIC CONTRACTS. THEY MAY BE AWARDED UP TO SIX PERCENT PREFERENCE IN THE BID. BIDS COULD BE DESIGNATED EXCLUSIVELY FOR SMALL OR MINORITY BUSINESSES IF 3 SUCH BUSINESSES ARE LIKELY TO BID

Subd. 6. Purchasing methods. (a) The commissioner may award up to a six percent preference in the amount bid for specified goods or services to small targeted group businesses.

(b) The commissioner may designate a purchase of goods or services for award only to small businesses or small targeted group businesses if the commissioner determines that at least three small businesses or small targeted group businesses are likely to bid.

(c) The commissioner, as a condition of awarding a construction contract or approving a contract for professional or technical services, may set goals that require the prime contractor to subcontract a portion of the contract to small businesses or small targeted group businesses.

3. Provide technical assistance for small and minority businesses bidding on public contracts

4. Provide a simple central certification for small and minority businesses in the state across all entities at the federal, state and local level.

5. Break up large contracts into smaller ones that is within the capacity of small and minority businesses to bid on.

MINNESOTA STATUTES ALLOW FOR LARGE BIDS TO BE BROKEN INTO SMALLER BIDS TO ENABLE SMALL BUSINESSES TO PARTICIPATE. 16C.16. Subdivision 1. Small business procurements. (a) ….The commissioner shall divide the procurements so designated into contract award units of economically feasible production runs in order to facilitate offers or bids from small businesses.

6. Assistance for small bidders who cannot compete with large firms which get special rates on large orders from suppliers.

7. Assistance with bonding and insurance requirements,

8. Quick payments for services done.

9. Reduce onerous paperwork needed to do business with the government

10. Set up mentoring programs, joint bidding and other programs to grow small and minority businesses.

11. Provide easy access to RFPs and documents needed for the development of bids.

12. Provide information on upcoming projects at an early time so that small and minority firms can make plans to bid on such projects or develop joint bids.

13. Hold public officials and contractors accountable to meet utilization goals.

MINNESOTA LAW ALLOWS PENALTIES TO BE IMPOSED ON CONTRACTORS WHO DO NOT MEET STATE GOALS FOR SMALL AND MINORITY BUSINESS UTILIZATION.

Subd. 6. Purchasing methods. (c)… The commissioner may establish financial incentives for prime contractors who exceed the goals for use of small business or small targeted group business subcontractors and financial penalties for prime contractors who fail to meet goals under this paragraph.

-- Bruce P. Corrie, PhD ethnictrends.info policyperspectives.org 651 641 8226

Thursday, June 04, 2009

National Study – Muslim African Immigrants Identify Closely with the American Dream

A recently completed study of African immigrant markets found that among all groups surveyed, Muslim African immigrants identified most strongly with the American dream. When asked their opinion on the statement, “America is a land of freedom, opportunity and possibilities for a better life,” 75 percent of Muslim African immigrants strongly agreed with that statement compared to 70 percent of all African immigrants surveyed. Among Somali Muslim immigrants the percentage who strongly agreed was even higher – 79 percent. African immigrants were less likely to report experiencing racism against them in America. Only about a third of those surveyed strongly agreed that they experienced racism against them in America. The percentage was even lower for Muslim African immigrants and even lower for Somali Muslims. The study also found a unique Islamic segment of the African immigrant consumer market. The national study was conducted by New American Dimensions of Los Angeles and commissioned by the US African Chamber of Commerce. David Morse of New American Dimensions and Dr. Bruce Corrie of Concordia University-St. Paul were co-authors. The study focused on African immigrants in Minnesota, Washington DC, New York and California. The study can be found at http://www.ethnictrends.info/pdfs/African_Immigrant_Presentation(2).pdf . A video of the study can be found at http://newamericandimensions.com . For more details on the study please contact Martin Mohammed (userad@aol.com), David Morse (david@newamericandimensions.com) or Dr. Bruce Corrie (corrie@csp.edu).

Monday, June 01, 2009

State of ALANA Business, 2009

State of Minority Businesses in the Economic Downturn in Minnesota, 2009 – “Glimmers of Hope” Saint Paul, MN: The 2009 survey results on the State of ALANA Businesses 2009 was presented at a packed town hall meeting focusing on the Economic Recovery Act at St. Paul College attended by senior policy leaders such as Congresswoman McCollum, Mayor Coleman of St. Paul and DEED Commissioner McElroy and others. “The key insight from the 2009 survey is that we can see “Glimmers of Hope” in the experiences of ALANA (African Latino Asian and Native American) businesses as they weather the economic downturn,” said Dr. Bruce Corrie, Dean, College of Business and Organizational Leadership at Concordia University-St. Paul. The online survey was sent to over 500 businesses and had an 11 percent response rate or 64 firms. These firms reflected a wide range of industries whose sales ranged from $10,000 to $20 million. Among the key findings of the survey: • 40 percent of the firms expected to increase employment in 2009. 24 percent reported reduction in employment in 2008. • 56 percent expected sales in 2009 to be average or above average while 44 percent expected sales to be below average. • Strategies used during the economic downturn included the following – o Finding a core stable financial base to weather the storm o Increased networking for new sources of revenue o Analyzing the customer base to find important market segments. o Analyzing the product base to find out products whose demand increases during the downturn. o Experimenting with innovative ideas and new products. Survey results can be found at www.ethnictrends.info. The survey follows a similar survey in 2008. For more information contact Bruce Corrie – 651 641 8226 or corrie@csp.edu

Tuesday, May 19, 2009

Citizen Solution to the MN Budget Impasse

It is unfortunate that our elected officials have reached an impasse over the budget and not non elected bureaucrats get to decide the future of Minnesota. We as citizens need to take charge of this process - How? Citizens should host a political summit in every county. The Secretary of State's office has the infrastructure and capacity to implement these town hall meetings through their voting and election infrastructure. The major elements of the budget proposals of the legislature should be summarized. Governor Pawlenty's proposals should be summarized. Citizens could vote on three options:
  • Accept the legislative proposals
  • Accept the Governor's proposals
  • Ask both the Governor and the Legislature to reach a compromise
Elected officials should follow the citizens recommendations. If they do not they have lost the popular mandate and should resign. I cannot believe that we in Minnesota are presented with a "default" option to resolve the serious issues of the future of Minnesota - especially in a time when so many Minnesotans are hurting because of the economy. If you agree with the above write your comment below and we will work to implement this vision.

Friday, April 10, 2009

President of Liberia's visit and Minnesota's Liberians

I welcome the visit of the President of Liberia to Minnesota. Here is some information on the economic contributions of Liberians to Minnesota.

Though a small community Liberians in the United States and Minnesota have a significant impact on the national and local economy. This report will document the multidimensional economic contributions of Liberians in Minnesota and the nation. The local analysis in Minnesota can help estimate the national economic contributions of this community to the nation.

Consumer Capital

  • Liberians in the United States have a buying power of over a billion dollars. This is equivalent to two times the GDP of Liberia in 2005.

  • In Minnesota Liberian buying power is an estimated $157 million dollars which is almost as large as the 2007-08 Liberian National Budget of $199 million dollars.

Worker Capital

  • Nationally and in Minnesota, Liberians have a higher labor force participation rates – 74 percent (nationally and locally).
  • Liberian workers are concentrated in the health care sector – nationally and locally with 45 percent locally and 36 percent nationally in that sector. Almost 4000 Liberians work in the health care sector in Minnesota.

Fiscal Capital

  • At the national level, Liberians pay an estimated 441 million dollars in personal taxes, almost equal to the GDP of Liberia.
  • In Minnesota, Liberians pay an estimated 24 million dollars in state taxes and 22 million dollars in federal taxes.

Entrepreneurial Capital

  • We do not have good data on Liberian businesses in Minnesota. However if we look at the growth in Black owned businesses in Brooklyn Park, the home of many African and Liberian immigrants we find that Black owned businesses grew over 100 percent during the period 1997-2002 from 205 to 437 and revenue of these firms grew over 70 percent during the same period, according to the Survey of Business Owners, 2002.

Global Capital

  • Exports to Liberia from the US was 75 million dollars in 2007
  • Liberia is an important source for Rubber imports to the US.
  • Minnesota with exports to Liberia of 1.2 million dollars in 2007 was the 15th largest trading partner of the US with Liberia.
  • Between 2002 and 2007 – trade between Liberia and Minnesota rose 1479 percent or over 14 times.

Economic Impact

  • Liberian workers are a small but significant part of the Minnesotan economy. According to the EMSI model the employment of Liberian workers helped create over 12,000 jobs and increase overall earnings by 492 million dollars. This earnings increase is almost the size of the GDP of Liberia.
  • Liberian workers have a powerful impact on the health care sector of Minnesota. According to the EMSI model, if the slightly over 3000 Liberian workers were to leave the local economy this would impact 7000 other workers in Minnesota and create a further earnings loss of over 300 million dollars in Minnesota.

Conclusion

Liberians in Minnesota and the nation are a small and significant part of the local and national economy. They influence the local and national economy in many ways – as consumers, workers, entrepreneurs, global and cultural capital. It is all the more important that the issue of the TPS of some Liberians expiring be given due policy consideration as a sudden labor shortage in a critical sector of the economy (health care) can have a significant on the economy of Minnesota.

Thursday, February 26, 2009

Black Capital Makes Minnesota Wealthier

I ran a simulation of the economic impact of over 145,000 Black workers in Minnesota. The model estimated that these workers helped increase earnings of other workers in Minnesota to the tune of almost 10 billion dollars. Black Capital makes Minnesota wealthier. I used the EMSI model which is an input-output model used by economists to give us a snapshot of economic impacts. The model has its own limitations but nevertheless helps us gauge broad economic impacts. For more information and data on the ethnic economy in Minnesota and the nation see www.ethnictrends.info. Bruce P. Corrie, PhD