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Growing Group of Entrepreneurs : Asian, Other Minority Firms on the Fast Track, Data Show


WASHINGTON — Business ownership by Asians, Pacific Islanders and Native Americans, growing twice as fast as the national average, jumped 56% nationwide from 1987 to 1992, and receipts soared by 163%, the Census Bureau said Thursday.

California was home to a third of these businesses, more than any other state. Asians and Pacific Islanders owned more than 230,000 businesses here--10.3% of all firms in the state, accounting for 9.2% of receipts.

Continued Asian American population growth, an entrepreneurial tradition among Asians, plus a high level of education and training in booming fields such as electronics, engineering and science, helped account for the growth and economic health of Asian American-owned firms, said Paul Ong, a UCLA professor who has written on Asian entrepreneurs.

Asian Americans are "well-represented in growth sectors, well-situated in that part of the economy that would offer opportunities," he said.

The most striking development nationwide was the surge in sales, bringing the size of Asian-owned firms much closer to the average for all U.S. business enterprises, whose numbers increased by 26% in the same five-year period. Average receipts totaled $165,000 for firms owned by Asians and Pacific Islanders, compared with $193,000 for all U.S. enterprises.

The gap in revenues between Asian and nonminority firms "is small and getting smaller," said Eddie J. Salyers, chief of the Census Bureau's company statistics branch.

The data also show that Asians and Pacific Islanders are more likely to be involved in business ventures than are other major minority groups.

The category--which includes Chinese, Japanese, Koreans, Vietnamese, Asian Indians, Filipinos and Hawaiians--accounted for 3.1% of the U.S. population in 1992, but it owned 3.5% of the businesses. Native Americans and Alaska Natives consisted of 0.007% of the population and owned 0.006% of the businesses.

By comparison, African Americas were 11.9% of the population and owned 3.6% of the businesses, with average sales of $52,000, according to previous Census Bureau reports. Latinos had 9.5% of the population and 4.5% of enterprises, with average receipts of $94,000.

Ong, a professor in the School of Public Policy and Social Research at UCLA, said one reason why Asians appear to have fared better than other minorities is because thousands of well-established and well-financed Asian entrepreneurs have fled their homelands to escape political insecurity there. Taiwanese business owners and those from Hong Kong, fearing the coming Chinese rule in 1997, make up a good portion of the new Asian entrepreneurs here, he said.

Victoria Chang, executive director of the nonprofit Asian American Economic Development Enterprises Inc. in Monterey Park, said many well-educated Asian immigrants--professors and physicians--arrived in the United States with retirement funds. But because of language difficulties, they were not able to pursue their former professions and ended up owning convenience stores or other small businesses.

"This is a scenario that I have seen in Monterey Park and the San Gabriel Valley and in San Jose," Chang said. "They cater to their own language-specific population and they own restaurants, carpet stores and whatever business is available."

Meanwhile, U.S.-born Asian Americans may have found themselves blocked from top management jobs by the "glass ceiling," or subtle discrimination, and have gone into business for themselves, Ong said.

"A number of Asians in this country and U.S.-born Asians are finding self-employment a better option than continuing as a paid employee," he said. "Some of it is the glass ceiling, but some Asians are just more entrepreneurial."

Shubha Ghosh, an economist and attorney who helped prepare a report for the nonprofit group Leadership Education for Asian Pacific, or LEAP, said Asian entrepreneurs typically finance their businesses with cash loans and gifts from friends and family members, rather than through debt on assets or bank financing.

Asians tend to use family-run businesses as a way to finance education or even other business start-ups for second-generation Asian Americans, Ghosh said.

Meanwhile, more prosperous Asians, those from overseas and here, often provide seed money for other Asian entrepreneurs. For example, in the Silicon Valley, a third of all venture capital flows to Asian immigrant entrepreneurs, Ghosh said.

Asian immigrant population growth here also contributed to the increase in Asian businesses, Ghosh and others said.

Geographically, 55% of the 705,672 businesses tallied in the report were clustered in California, New York and Texas.

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