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Director Hinson Remarks at the 2009 Minority Enterprise Development (MED) Week Conference, Washington, DC
AS PREPARED FOR DELIVERY Thursday, August 27, 2009
Good morning and welcome to the 2009 MED Week Conference.
Over the next few days, you will have the opportunity to learn, to network and hopefully create new relationships that will ultimately help your businesses grow.
I am proud to represent the President of the United States, Barack Obama and Secretary of Commerce, Gary Locke, as National Director of the Minority Business Development Agency.
While President Obama and the First Lady will not be able to attend this event, they send their greetings.
I am pleased to confirm that Secretary Gary Locke will address this conference later today, and Ed DeSeve and Van Jones from the White House will be here on Friday.
As many of you know, MED Week is made possible by the hard work of many people at MBDA and SBA. Please join me in thanking them for putting the 27th annual National MED Week Conference together for you.
In addition, I want to take a moment to thank all our sponsors for their generous support, with a particular note of appreciation to our top tier sponsors:
- Lockheed Martin
- Northrop Grumman
The theme of this Conference: Energizing the American Economy with Minority Businesses speaks to the core mission and purpose of MBDA.
As many of you know, MBDA is the only agency in the federal government with the sole task to promote the growth and competitiveness of the minority business community.
MBDA supports businesses that our owned and operated by members of the Native American, Hasidic Jewish, Native Hawaiian, Asian, Alaska Native, Pacific Islander, Hispanic and African-American communities.
These communities represent approximately 30 percent of the U.S. population.
But by 2050, it is estimated these communities will constitute a full 54 percent of the U.S. population making them the future “majority-minority.”
In our current business model, MBDA’s activities are centered on helping companies from these diverse communities obtain financing and contracts from both the public and private sectors.
In 2008, we generated more than $2 billion in contracts and financing for our clients, created more than 5,000 new jobs and retained thousands more.
This gives us a Return on Investment (ROI), the primary way we value our results, of 74 times.
In other words, for every taxpayer dollar that went into MBDA in 2008, we delivered $74 dollars in returns to the national economy. For the first six months of 2009, we generated approximately $1.8 billion in contracts and financings.
Coming from the business sector, I think these are impressive results.
Over the last 40 years, MBDA has grown thousands of businesses. For example, a young immigrant from Ethiopia named Dosho Shifferaw moved to California where he was an industrial designer experimenting with new ideas. He created an exercise machine using rods rather than weights as resistance. With MBDA’s technical support and relationships, he was able to secure manufacturers for his innovative product - and Bowflex was born.
Today Bowflex has sold more than $1 billion dollars in exercise equipment nationwide.
Another client of MBDA, the New England Construction Company in New York City has been a client of the Queens Minority Business Center since 2003. When they first sought support from MBDA, their revenues were $500,000 dollars. With training in contract bidding and building strategic relationships MBDA helped New England Construction Company increase revenues to over $40 million dollars.
These are just a few of the many examples of our success.
With the support of MBDA, the minority business community now accounts for more than $660 billion dollars in gross receipts, and generates approximately 8 million jobs nationally.
Despite this success, the diverse business community continues to struggle and still must contend with substantial obstacles. We know these obstacles all to well:
- limited access to capital partially as a result of discrimination in lending;
- limited access to private sector contracts due to lack of networks;
- limited access to public sector contracts because of increased bundling;
- limited access to the social relationships that support the success of any business;
- and the perception of mediocrity associated with our communities and businesses which is both unfair and unjust.
As a result of these and other obstacles, the average minority-owned firm is less than half the size of the average majority-owned firm; has lower average payroll per employee; and a lower chance of success.
This not only stifles job growth and stability in minority communities, it limits job growth for all Americans because minority firms tend to be more balanced in their hiring of minority and non-minority employees.
In short, obstacles to the growth of the minority business community are obstacles to economic opportunity for all Americans.
As an American business community, we put food on the table for millions of employees who provide for their families. We provide innovative products and services that improve medical procedures, create new markets and satisfy clients. Our efforts send children to good high schools and better colleges, and our example focuses them on the global advantages that exist for those who are prepared.
We stabilize communities and create opportunity for all those willing to work.
When our employees choose to save a portion of their earnings, we help create the capital to fund their golden years and the opportunity to give the gift of wealth transfer to the next generation.
But we must continue to come together, work together and build together if we are going to achieve economic parity. Economic parity means minority firms will generate $2.5 trillion in annual revenue, create 16 million jobs and expand the tax-base by more than $100 billion per year.
At economic parity, the diverse business community will be larger than the economies of Russia, Italy or Spain. At economic parity, we reduce the unemployment rate from the current level of about 9.4 percent to 7.5 percent. At economic parity, the tax-base that is generated could fund 100 percent of Head Start; 100 percent of the Children’s Health Insurance program or a full 10 percent of the cost estimate to reform healthcare.
Achieving economic parity must be our highest goal and this is the central mission of MBDA. Achieving economic parity will not be easy, but we can do it!
How? We can achieve economic parity by creating larger minority-owned firms faster.
But to do this, we must change!
We must reconsider our business models and strategies for growth.
Minority businesses must move away from organic growth to growth by acquisition, merger, joint venture and strategic partnerships.
In other words, we must move away from only starting businesses and move toward buying businesses. We must move away from a sole ownership psychology to a strategic partnership psychology. We must move away from service oriented businesses and embrace the innovative opportunities of the future:
- Clean energy
- Smart grid technology
- And healthcare IT
You represent the innovators, the risk-takers and the entrepreneurs who develop and market new products and services.
It is this innovation that built this great nation. These ideas fuel the engine of our economic recovery. As business leaders, we must continue to lead into the 21st century.
Therefore, we must resist the comfort of racial isolation and separatism
and embrace the power, benefit and opportunity of multi-culturalism.
We must think globally, expect more from ourselves and demand opportunity consistent with our capabilities, performance and ambition.
And most important, we must learn to discern the difference between the pie and the crumbs.
In doing these things we can proudly take our place next to those extraordinary minority entrepreneurs and innovators that came before us and who succeeded despite having
no real access to capital,
no real access to public or private sector contracts,
and who operated their businesses in an environment which made building strong multi-cultural business relationships nearly impossible.
These amazing minority entrepreneurs fought the good fight and finished strong.
Some came to this nation by free will, others came by force and still others were already here, but all of them shared a common belief and dreamed a common dream - that in America, our tomorrow would be better than their yesterday.
They dreamed of an environment where their children produced more than they consumed and where pride in performance, integrity and a commitment to excellence were the determining factors to greatness.
The late Senator Ted Kennedy, who gave his life to public service, once said:
“For all those whose cares have been our concern… the work goes on… the cause endures… the hope still lives and the dream shall never die…”
Let us all say “thank you” for the foundation they provided and make a commitment to make more dreams come true.
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