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Higher percentage of minorities, women start their own businesses than average

WASHINGTON—Minorities and women are starting their own businesses at higher rates than the national average, according to Census Bureau data released Thursday.

The number of businesses owned by native Hawaiian and Pacific Islanders grew the most between 1997 and 2002, by 67 percent. That was nearly seven times the national average of a 10 percent increase in all private businesses.

Black-owned businesses increased by 45 percent. The number of Latino-owned businesses grew by 31 percent during those years. Women and Asians entered the ranks of business owners at twice the national rate, at 20 percent and 24 percent, respectively.

The Census Bureau compared data it collected from 1997 to 2002 in its "2002 Survey of Business Owners." The study is conducted every five years.

Statistics for businesses owned by American Indians weren't comparable because of changes in methodology.

Ronald Langston, national director of the Minority Business Development Agency, part of the Department of Commerce, said the economy improved after the 2001 terrorist attacks in part because of the growth in minority-owned businesses.

"The success or failure of minority-owned businesses will increasingly drive the success or failure of the overall U.S. economy," Langston said.

He credited President Bush's economic initiatives—such as increased business tax credits and lower interest rates—with helping more minorities become entrepreneurs.

"These preliminary results," Langston said, "validate the success of President Bush's pro-growth strategy and his vision of an `ownership society.'"

The increase in Latino-owned businesses is a result of more flexible banking standards, said Eric Rodriguez of the National Council of La Raza, a Washington-based advocacy group for Latinos.

Some banks across the country now accept alternative forms of identification, such as a Mexican identification card, as a way to open a bank account, apply for a mortgage or apply for a business loan.

"I think we have seen more steps that offer more flexible policies for immigrants," said Rodriguez, director of policy analysis at the council. "We want to see a lot more of the markets open to Latino immigrants."

Harry Alford, president of the National Black Chamber of Commerce, said he expected growth for black-owned businesses to be larger, around 60 percent. The 2001 terrorist attacks and the economic recession that followed may have slowed the growth, he said.

Alford urged the president to continue with policies that "have been good for business."

The survey also measured the change in receipts or sales that those businesses had.

Black business owners had the largest growth in receipts, 30 percent. Hawaiians and Pacific Islanders followed with 26 percent. Latino and Hispanic business owners matched the national average, 22 percent. Receipts for female and Asian business owners fell below the national average at 16 percent and 13 percent, respectively.

The Census Bureau collected the data from business tax returns, Social Security information and surveys that were conducted by mail. To be counted, a company needed to have grossed more than $1,000 in 2002. Only businesses in which more than 51 percent was owned by a minority were considered minority-owned. Owners were allowed to identify with more than one race.

The Census Bureau released the data at a press conference with the National Urban League, a New York-based black business group.

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(c) 2005, Knight Ridder/Tribune Information Services.

GRAPHIC (from KRT Graphics, 202-383-6064): MINORITYOWN

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