WASHINGTON — It is a sight that has become increasingly common in big cities: a boom of small businesses ranging from restaurants to laundries in neighborhoods of newly settled Asian-Americans. Often in economically blighted areas, they are an apparent sign of budding prosperity.
But Indochinese immigrants, who run many of these businesses, have a different name for it. They call it the business ghetto.
Of 255,000 businesses run by Asian-Americans in 1982, the most recent year for which Census Bureau statistics are available, almost 70% were in services and retail trade. And, of every 20 businesses started by Indochinese refugees each month, 18 will fail during the first year, according to one study.
Le Xuan Khoa says it is time for a change. It is time, he says, for Indochinese to go into businesses such as high technology, heavy manufacturing, banking and transportation.
Khoa, a philosophy professor in Vietnam and now president of the Washington-based Indochina Resource Action Center, said in an interview: "This is the land of opportunity. We have thousands of types of businesses out there. They should not stick to business ghettos."
To encourage Southeast Asians to expand their horizons, Khoa and other activists conduct business seminars and workshops in cities across the country--including Los Angeles, Washington, San Antonio and other sites with large Asian populations--on such issues as borrowing big money to making dramatic changes in business philosophy.
Southeast Asian businesses have a long way to go, according to a study in Los Angeles by Khoa's organization and the city's Economic and Employment Development Center, which provides technical assistance to Vietnamese businesses.
The study found many problems among the area's 38,000 Southeast Asian businesses, including poor management, undercapitalization and "ethnocentric orientation." (The survey noted that 46% of the Indochinese small businesses said their clients are mostly Indochinese refugees.)
The strikingly harsh assessment in the report--titled Economic Development Opportunities for Indochinese Refugees in Los Angeles--and the observations of many experts on Indochinese businesses, portray merchants in Southeast Asian communities as decidedly uninformed about Western commerce, often because of wide cultural differences.
For example, the report found "a clear lack of understanding of the American consumer's taste, spending habits, needs, culture and traditions" and a "lack of knowledge of the American business environment."
And, aside from these problems, the Indochinese also must deal with outside competition.
The report asserted that "cutthroat competition and drastic price-undercutting" by "other Asian competitors" in restaurants and grocery stores are running the Southeast Asians out of business. These other Asian groups, it said, "seem to hold the advantage because of their
access to abundant external sources of financing from Hong Kong or Taiwan."
Although the Chinese and Southeast Asians "are in the same geographical areas, doing the same thing," said Andy Anh, executive director of the Los Angeles Economic and Employment Development Center, "the question is who is better capitalized to sustain a business."
The answer, he said, is the Chinese. Because they and the Koreans have been in this country longer than the Indochinese, they generally have better adapted to the American marketplace. Moreover, he said, many Indochinese must send money to their homeland to help relatives and friends who have not been able to emigrate, thus siphoning off potential financing from their businesses.
As relative newcomers, Indochinese often find old, establishment institutions unwilling to accept them. In some cases, language is the roadblock.
That is more true for Laotians and Cambodians than for Vietnamese, said Thida Khus, director of employment programs at the nonprofit Khmer Society of San Antonio. She said that, compared to the Vietnamese, Cambodians and Laotians had "very little exposure to Americans" during the Vietnam War, giving them relatively few opportunities to learn about American language and customs.
Language a Barrier
Thomas R. DeGregori, a professor of economics at the University of Houston who specializes in Third World issues, said language is one of the "assimilation characteristics" that are "barriers to entry" to the American business world. Such problems are compounded in Houston, where 6,500 Asian firms are situated, DeGregori said, because the business community "has always been a closed-entry" one run primarily by established residents.
The ultimate barrier--cash shortage--figures prominently in the Indochinese business story. In many cases, inexperience with the workings of financial institutions and the inability to negotiate complicated forms prevent owners of small businesses from graduating to bigger businesses.