Statement on Minority Business Enterprise Development

December 17, 1982

This Administration is committed to the goal of greater opportunity for economic progress and independence for all Americans. We began movement toward this goal last year with enactment of major elements of our Economic Recovery Program. By reducing inflation and stimulating economic growth, this program will promote the kind of economic environment essential to the formation and development of business enterprise. In addition, our economic program will result in increased private savings through incentives provided by tax rate reductions and will slow the growth of government spending. Both actions will expand the pool of financial resources from which businesses can obtain capital for development.

But these steps are only a beginning. We must maintain the momentum by keeping the tax rate cuts in place and by retaining the tax indexing scheduled to begin in 1985. This indexing will prevent inflation from forcing individuals, including investors, workers and small business owners, into higher and higher tax brackets.

Our Administration, however, has not stopped there. Today, I am announcing additional steps to promote an economic environment in which minority entrepreneurs can better marshal their talents and skills to achieve better lives for themselves and, in so doing, contribute to a stronger economic base for America.

Our program is based on the following important principles:

  • A healthy, growing economy is fundamental to creating the opportunity for the formation and growth of minority-owned businesses.

  • Greater economic independence for minority Americans will best be achieved through increased opportunities for private employment and business ownership.

  • Creativity, private entrepreneurship, and individual initiative will ultimately determine the success or failure of individual minority businesses.

  • Expanded involvement of other private firms is crucial to minority enterprise developmental efforts.

The specific steps, which reflect these principles, along with key elements of our economic recovery program, will provide the basis for a renewed and vigorous minority business effort for the 1980s.

The Minority Business Development Agency of the Department of Commerce and the Small Business Administration will assist directly in the formation of at least 60,000 new minority businesses over the next ten years.

During the same period, this Administration will assist in the expansion of at least 60,000 minority businesses or 10 percent of the approximately 600,000 minority businesses that already operate in America today. We will place particular emphasis on labor intensive businesses and those in industries with high growth potential.

The Federal government will procure an estimated $15 billion in goods and services from minority businesses during the three-year period comprising Fiscal Years 1983, 1984, and 1985, based upon our current overall procurement plans. Actual procurement objectives will be set on an annual basis and will be based upon this Administration's objective of increasing the share of total procurement supplied by minority businesses. This does not include minority business procurement by recipients of Federal grants and cooperative agreements, which could amount to an additional $6 to $7 billion during this three-year period.

We will make available approximately $1.5 billion in credit assistance and $300 million in management and technical assistance to promote minority business development during this same three-year period.

To expand minority enterprise participation in Federal government subcontracts, I am directing department and agency heads to develop and implement incentive techniques that will encourage greater minority business subcontracting by Federal prime contractors.

To continue full minority business participation in procurement resulting from government grants and cooperative agreements, I am directing the major Federal grant-making agencies to encourage their grantees to achieve a reasonable minority business participation in contracts let from their grants and agreements. This will be done in a manner consistent with the Administration's commitment to the principles of federalism.

In order to spur private sector involvement in minority business development, I will ask the business leaders of this country to work with me to encourage private firms to expand their business transactions with minority enterprises.

I am asking the Vice President's Task Force on Regulatory Reform to explore opportunities for reducing regulatory and other barriers to small and minority business expansion, and for promoting meaningful entry into the international trade arena.

In order to ensure the success of these Federal Initiatives, I will be issuing a new Executive Order on Minority Business Development which reaffirms the Federal commitment. It will prescribe specific policies and actions to be taken in these programs and direct the Interagency Council for Minority Business Enterprise to establish uniform guidelines for all Federal minority business efforts. It will also direct the Cabinet Council on Commerce and Trade to submit an annual plan specifying minority-enterprise-development objectives for each agency.

The Minority Business Development Agency has established a national network of Minority Business Development Centers which, in concert with existing SBA Small Business Development Centers, will provide management and technical assistance to minority firms and promote increased participation of private firms and other public sector resources.

I am directing Federal contracting agencies to increase minority business procurement objectives for 1983 by at least 10 percent over actual procurement in 1982. In addition, we are taking measures designed to expand the number of minority firms participating in Federal procurement programs.

And beginning next year, I will designate annually the first full week in October as Minority Enterprise Development Week.

Together, our policies and programs for minority business development should set the stage for the expanded development of minority business. But most important are the steps to be taken by minority entrepreneurs themselves and other private concerns. Recognizing that the realization of the American Dream is ultimately achieved in the private marketplace, we can, through a greater commitment to public and private cooperation, help minority Americans to achieve fuller participation in the market economy.

Ronald Reagan