Asian, Pacific Islander Firms Surging in U.S.
The number of noncorporate U.S. businesses owned by Asians and Pacific Islanders grew by 30% from 1992 to 1997, four times faster than the nation’s overall business growth rate, according to U.S. census data released today.
Not surprisingly, California--especially Southern California--continued to dominate the Asian business landscape, with California claiming more than one-third of all such businesses in the nation.
The data point to a rapidly growing Asian marketplace in other parts of the country, including the East Coast and Texas, as well as in the traditional stronghold of the West.
“Thirty years ago you would have talked about the Asian [business] population being a one-coast population, here on the West Coast,” said Don T. Nakanishi, director of UCLA’s Asian American Studies Center, who viewed an advance copy of the report.
“When I look at these figures, I see a lot of diversity. Who would have ever thought Texas would be the No. 3 state?”
The report is based on the 1997 Survey of Minority-Owned Business Enterprises, an ethnic economic snapshot taken every five years to help government agencies and private groups plan programs and set policies to increase minority business development.
Because of changes in the methodology, some direct comparisons between the 1997 and 1992 surveys are not possible. For example, the 1992 survey did not include so-called C corporations--generally larger companies in which owners and shareholders are exempt from the legal responsibilities for debts and obligations.
Those corporations were included for the first time in the 1997 survey, making up 14% of Asian- and Pacific Islander-owned businesses and nearly half the revenue. Excluding those companies, the number of Asian- and Pacific Islander-owned businesses grew from 603,426 in 1992 to 785,480 in 1997, a 30% increase.
Including C corporations, there were 913,000 firms in the United States owned by Asians and Pacific Islanders in 1997, employing more than 2.2 million people and generating $306.9 billion in revenue.
The report also showed that the number of firms owned by native people of Alaska and Native Americans (classified by the census as American Indians), grew by 84% between 1992 and 1997. Those firms, not counting corporations, grew from 102,271 in 1992 to 187,921 in 1997. Even with that growth, those firms make up only a fraction--0.9%--of the nation’s total business pool.
Companies owned by Asians and Pacific Islanders made up 4% of the nation’s 20.8 million nonfarm businesses and generated 2% of all receipts.
The census data shows a steep growth curve continues for minority-owned businesses.
Census data released in March showed 30% growth in the number of Latino-owned firms and a 26% increase in the number owned by blacks.
“The one thing that people don’t think about is that minority business owners don’t just hire minorities, they hire everybody,” said Albert N. Eskenazi, business-development specialist for the Minority Business Development Agency’s regional office in San Francisco.
For the most part, companies owned by Asians and Pacific Islanders fell into the same industry-distribution patterns as the overall business community. Among companies owned by Asians and Pacific Islanders, 44% were in the service sector, compared with 43% for the all U.S. firms.
The key exception is retailing. Overall, 14% of business ownerships are in the retail sector. But among Asians and Pacific Islanders, 21% of all business ownerships are in retail.
Overall, receipts for noncorporate Asian firms rose by 68%, to $161 billion in 1997, compared with a 40% rise for all U.S. noncorporate firms. That translates into large numbers of companies generating comparatively small amounts of cash.
By far, the largest group of firms owned by Asians and Pacific Islanders--648,300 companies, or 71%--were sole proprietorships, and only 0.2% had 100 or more employees. Nearly one-third (259,600 companies) had annual receipts of under $10,000 while only 5% (45,300) had 1997 sales of $1 million or more.
Figures like that caused some merchants to question how viable many of those businesses are.
“Many [restaurants], they try to stay open even though they are just holding on,” said Harry Kwok, owner of the Hop Li Chinese restaurant, a 20-year-fixture in Chinatown in downtown Los Angeles.
“They sell their food very, very cheap, even though they don’t make much profit.”
The census showed that the average receipts per firm for companies owned by Asians and Pacific Islanders was $336,200, or 82% of the average figure for all U.S. firms.
But observers like David Honda, president of the Los Angeles-based Asian Business Assn., say overall the segment is strong and diverse, even if some firms are less than robust.
“Some of the businesses are struggling, but they are entrepreneurial in spirit,” said Honda, who’s seen a 40% growth in membership in his organization since 1992. “They know no time limits in which they have to close up their shop. So they’ll continue to hang in there.”
He and other Asian business owners said the extensive business network set up among Asian-owned firms--offering everything from financial assistance to trading partners--should help those firms weather the economic slowdown.
“The technology sector will be slowing down but other sectors, such as the restaurant sector will be going up,” said Peggy Cherng, chief executive and president of the Panda Restaurant Group. The South Pasadena-based company operates a chain of more than 400 restaurants in 35 states under the Panda Express and related brand names. “A lot of these entrepreneurs really want to make a go of it in the United States.”
The census also showed dramatic growth in the number of companies owned by Native Americans and Alaska natives. There were 197,300 firms in that category in 1997, employing 298,700 people and generating $34.3 billion in revenue. That tally includes C corporations but not firms owned by tribal governments.
Even though the rate of growth for Native American firms was greatest among any business segment, Native Americans continue to lag behind other ethnic groups economically, said David Beaver, executive vice president of the National Center for American Indian Enterprise Development based in Mesa, Ariz.
“I don’t know if saying there’s been 84% growth, when the rubber meets the road, if you can say that Native Americans are a lot better off now than they were in the 1992 Census,” Beaver said.
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Karen Robinson-Jacobs covers minority and immigrant businesses. She can be reached at karen.robinson@latimes.com.
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Business Boom
Between 1992 and 1997, the number of businesses in the United States owned by Asians or Pacific Islanders (excluding corporations) grew by 30%, according to data released today by the U.S. Census Bureau. That’s more than four times the growth rate for all comparable businesses in the nation.
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The number of Asian- and Pacific Islander-owned businesses has grown much more than business overall from 1992 to 1997 ...
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... and the Los Angeles metropolitan area continues to be No. 1 in Asian businesses.
Los Angeles/Long Beach: 114,462
New York City: 101,814
Orange County: 44,840
Honolulu: 39,252
San Francisco: 35,427
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Source: U.S. Census Bureau
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