Building on L.A.’s Economic Mosaic : Minorities: Economic development in the region can nurture ethnic cooperation as Latinos, Asians, blacks and Anglos forge business alliances.

If the riots and their aftermath have proved anything, it is that the old system of minority advocacy and Establishment accommodation no longer provides solutions to our most critical economic and social problems. Rather than emphasize competing ethnic differences, Los Angeles needs a politics that builds on the highly diverse nature of the region’s ethnic mosaic.

This politics derives strength from developing economic power within each group, and using that power to create enveloping social and economic networks. In place of fragmentation and exclusiveness, it is egalitarian in its belief that all groups contribute to society. To that end, it would work to nurture and cultivate the shared objectives--a strong economy, good schools, efficient transportation--of all members of the mosaic society.

It is a politics that decisively breaks with the hierarchical view of economic and ethnic politics that has characterized the region for the last 25 years. At one end of that hierarchy were a small number of large corporations exercising inordinate sway over the region’s economic direction. At the other were designated leaders from the various ethnic communities, bargaining with the corporate Establishment over the perquisites of the public purse and political power.

This “broker state” approach no longer reflects economic and social realities in Southern California. For one thing, to cede to major corporations the basic responsibility for the regional economy makes little sense when many are downsizing, leaving town or adjusting to outside ownership.

Nor can we expect these large companies to play the predominant role in creating new jobs and wealth. Even during the aerospace-led economic boom of the 1980s, large firms generated no more than one-fifth of all new jobs in the region. As the military downturn took hold in 1988-1990, small and mid-sized firms created a remarkable 86% of all new jobs in Los Angeles, including virtually all new growth in general and high-technology manufacturing.

Equally critical, the term “ethnic minority” no longer fits so easily into the category of perennial supplicants. Although many nonwhites remain mired in poverty, Southern California boasts the nation’s largest concentration of companies owned by Latinos, Asians and African-Americans, even though the region ranks fourth in total black population. Taken together, minority-owned businesses in Los Angeles earned receipts nearly three times larger than New York counterparts, according to one survey.

If nothing else, this growth shows that elements within all leading minority groups share a strong interest in the region’s entrepreneurial vitality. Rather than being victims or members of a generalized “people of color,” these individuals are catalysts of self-renewal within each community. They are the glue holding the mosaic together.

To date, the Los Angeles Establishment has been slow to adjust to this complex mosaic. Responding to the riots, for example, the ruling elites seem determined to recreate the failed pattern of the “broker state” through Rebuild L.A. This is evident in Rebuild’s core economic leadership--drawn, with few exceptions, from the remnant of the old Anglo downtown corporate Establishment. At the same time, most minorities on the Rebuild board seem out of ‘60s central casting: professional supplicants, social-service providers and politicians.

This apparent longing to revive the glory days of the Great Society era should not be greeted with enthusiasm by residents of South Los Angeles, or other Angelenos. More than two-thirds of the funds targeted for South Los Angeles and other inner-city areas in the ‘60s and ‘70s, notes Robert Woodson, head of the National Center for Neighborhood Enterprise, ended up in the hands of what Woodson calls “the social-service industry”--advocates, bureaucrats, lawyers and professional poverty warlords.

A more sensible strategy, Woodson and other activists suggest, would develop economic grass roots by making capital available to local entrepreneurs. This kind of empowerment-oriented strategy turns the traditional broker-state relationship on its head, transforming minorities from supplicants into wealth creators. Working in fields as diverse as textiles, electronics, biomedical-component manufacturing, entertainment and business services, many minority-owned companies have already outpaced the corporate giants in new wealth creation and job growth.

These companies offer more hope for new jobs than firms like General Motors Corp., whose highly publicized $18-million grant to Rebuild’s South Los Angeles program barely compensates for the economic damage its layoffs at the Van Nuys assembly plant and Hughes Aircraft Co. subsidiary have caused in the region.

It is here that mosaic politics--with its emphasis on building on economic and ethnic diversity--can play a critical role. Rather than focusing on high-profile corporate largess, we should concentrate on facilitating and even providing incentives to the scores of smaller, less formal and more localized efforts now underway.

These efforts, often spearheaded by local entrepreneurs and community-based activists, reflect how a mosaic society operates. For one thing, such people tend to be more pragmatic. At the same time, locally owned firms are usually far more dependent for their success on the regional pool of skills than the footloose chieftains of large public companies, who frequently take their direction from Wall Street analysts.

Smaller firms, often working in concert with local communities and more enlightened larger companies, have already begun to develop efforts that could prove important. The Inland Empire Economic Council, for example, is starting to tie together the various strands of the region’s growing textile industry--from university researchers to manufacturers and merchandisers. The Ontario-based group has also developed a program to help bring capital sources to local firms as a means of relieving high unemployment.

Equally intriguing are attempts by some high-technology and aerospace manufacturers in Orange County to build quality supplier networks with local companies in Los Angeles, many Latino- and Asian-owned. Another promising model is the innovative QWOD Plus People Based Community and Economic Development Program, focusing on the heavily minority Sylmar-Pacoima-San Fernando area. It seeks to combine local corporate interests with educational institutions and the indigenous work force to spur new economic growth. Anchored by a training program at Mission College, whose student body is more than half Latino, the program seeks to supply quality workers to local industries along with the creation of new affordable housing.

All these examples reveal the extraordinary congruence between the goals of economic development and ethnic cooperation that is the foundation of the new mosaic politics. One prime example can be seen in efforts by Chinese-American entrepreneurs and bankers to develop partnerships with Latinos and African-Americans as a logical means of expanding their own market and opportunities.

Among the most successful components of the L.A. mosaic, the Chinese business community owns numerous shopping malls and factories, and boasts more than 20 banks. Yet, it now faces the limitations imposed by an ethnic population of roughly 300,000. Latinos and African-Americans--who have few well-developed financial resources in their communities--offer Chinese financiers a burgeoning but undercapitalized market for new business loans, as well as potential sources of highly motivated workers and an enormous potential consumer market.

Compared with the well-publicized antics of the professional advocates or corporate disbursements being announced by Rebuild L.A., such small efforts may seem far from newsworthy. Yet, it is precisely this kind of ground-level cooperation that may serve us best in carrying our metropolis successfully into the next century.