Fayetteville Arkansas, University of Arkansas--Old Main Overview

Fayetteville Arkansas, University of Arkansas--Old Main Overview
Overview of Fayetteville, AR

Monday, February 19, 2007

What is the Economic Impact of Hispanic-Owned Businesses in NW Arkansas?

Seeing signs recently in Fayetteville about a Korean restaurant preparing to open triggered thoughts of the many small businesses in NW Arkansas owned and operated by immigrants.

Minority-owned businesses are nothing new, of course. They have been the backbone of America since immigrants first came to America. As the immigrant population grows throughout the U.S., so does the number of businesses owned by minorities.

According to a new study by the Center for an Urban Future, a New York City think tank, immigrants have been more likely to be self-employed than native-born residents in every U.S. census since 1880. Further, immigrant entrepreneurs have been an overlooked and little-understood piece of cities' economies. The research shows that more businesses are being started by foreign-born vs. native-born entrepreneurs in major cities, driving growth in sectors from food manufacturing to health care.

NW Arkansas mirrors the nationwide trend.

Benton County’s overall population grew by 22% in the five-year period 2000 to 2005. At the same time, the Hispanic population grew 78%, from slightly over 13,000 to nearly 24,000. Hispanic population in Washington County showed a slightly smaller percentage of increase, 73%, while the overall population increase in Washington County was 14%. Translating that to numbers means the Hispanic population grew from approximately 13,000 to more than 22,000. Certainly no other ethnic group comes close to such an increase in our area.

So, it’s no surprise to see to see more and more signs in Spanish while traveling in the two counties. There are restaurants, grocery stores, auto sales and repair shops, clothing stores, daycare centers, real estate agents, notaries public, Spanish-speaking radio stations and newspapers, and more.

For many immigrants, entrepreneurship is the best way to rise above a menial, low-paying. Immigrants are known for their willingness to work hard to obtain a brighter future for themselves and their children.

However, they face many significant roadblocks, notably the language barrier and lack of available business loans. Another problem stems from the perception of banks and chambers of commerce the immigrants brought with them from their native lands.

It sometimes takes years for immigrants to feel secure enough to divulge business and personal information to banks. Many immigrants do not comprehend what a banker means when asked about their “business plan.” Their plan is to join with family members and work long, hard hours.

There is no doubt that minority-owned businesses contribute greatly to our local economy but the amount of the impact is difficult to determine. No one in NW Arkansas has made a thorough study. Some area chambers of commerce are reaching out to the Hispanic community, as are some banks. However, a comprehensive study is lacking.

The cost of such a study is the biggest obstacle. The Skyline Report, an economic summary of the real estate market in NW Arkansas which I frequently mention in my blog, is prepared for Arvest Bank by the Center for Business and Economic Research of the Sam Walton School of Business at the University of Arkansas. I’ve read estimates that the Skyline Report costs $250,000 annually. While certainly expensive, this comprehensive analysis is extremely useful for measuring the real estate market.

I believe the economic impact of Hispanic-owned businesses is being overlooked at best and ignored at worst. It is time for a thorough study of their importance in NW Arkansas.

The Hispanic population is the largest minority group in NW Arkansas and the U.S. There is no sense in burying our heads in the sand any longer; Hispanics, as well as other ethnic groups, are here to stay.

Perhaps one of the banks could see the benefits of such a study or area chambers of commerce could join together to fund an analysis. It needs to be done.

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