Alex Espinoza has experienced Hispanic economic growth firsthand. When he started his California-based mortgage lender in 1981, it was the only Hispanic real estate company in the state's Inland Empire. That number grew to five by 1986. Today, he says, the region is home to about 50 Hispanic-owned real estate companies.
"As we continue to grow, these numbers will continue to escalate," predicts Mr. Espinoza, CEO of California Capital Cos. "It's refreshing to see [Hispanic] growth not only in terms of workers but also in business owners."
The latest figures from the Census Bureau confirm that Mr. Espinoza and the Inland Empire are not atypical. Results from the 1997 Economic Census show that the country had 1.2 million Hispanic companies in that year, with revenues of $186 billion. During the next several years, these Census numbers will serve as the main public data source on the size, dispersion, and development of Hispanic-owned companies.
The same people who submitted data for the Economic Census – business owners – may be the prime beneficiaries of the new data. Cesar Melgoza, CEO of Miami-based Geoscape International, which helps companies market to Hispanics, says the numbers prove crucial in strategic planning for B2B sales. "Any company that is putting a business plan together needs to figure out what the [market] potential is," he explains. "If I'm selling cash registers and I know there are 155,000 retailers, then I know what my universe is." Economic Census data can determine market size locally, regionally, or nationally.
Within the Hispanic economy, the Economic Census data can help Hispanic companies sell to other Hispanic companies, according to Ray Arvizu, CEO of Arvizu Advertising & Promotions in Phoenix and the former chairman of the U.S. Hispanic Chamber of Commerce. "We sometimes don't look at the opportunity that's around us," he says, noting that Hispanics make up 34 percent of the population in Phoenix.
"The [Economic Census] numbers have exceeded my expectations," Mr. Arvizu adds. "Now the system has to change and accommodate the growth of this change. We have redefined how we're going to play in the economy."
Although the Economic Census presents plenty of good news in terms of growth, it fails to pinpoint the real problems confronting Hispanic companies, according to Waldo Lopez, director of economic policy research for the Tomás Rivera Policy Institute.
"Some data are better than no data," says Mr. Lopez, "but the data are very limited. For example, when you look at industries [see "Industry Sectors" table], you have to take them at a very aggregate level. If we want to look at how well Latino firms are doing in the tech sector, that level of detail isn't there. You also don't have the ability to determine how many of these businesses have had to close down because of budget problems."
Mr. Lopez thinks it would be interesting to determine how many Hispanics launch their own businesses because of a shortfall in employment opportunities. He also finds a direct correlation between the number of Hispanic companies and the number of Hispanics, indicating a connection to birth rate and immigration. "Overall, Latino businesses will continue to grow as long as the Latino population continues to grow," he says.
Gabriela Glemus, director of policy and legislation at the League of Latin American Citizens (LULAC), focuses on the public-policy implications of the data. "Sometimes government doesn't really take our needs into account," says Ms. Glemus. "This is an opportunity for cities to take steps to eliminate zoning problems. … There's so much potential. The numbers are there – clearly."
Specifically, Ms. Glemus feels the numbers could assess unmet demand for retailers in inner-city neighborhoods. "It's my understanding, for example, that [California's] San Fernando Valley is divided ethnically. Latinos are primarily servicing each other. If you start looking around the country, you're going to see that in a lot of places," she says. "I'm really shocked that retail businesses are afraid to go into inner cities. It's important for businesses to start examining Census data in terms of investment strategies. Unmet demands of the inner-city market reach 25 percent in a lot of places."
Even as "Hispanics are revitalizing our cities," Ms. Glemus says, the public policies of affirmative action are waning. She sees this as a wakeup call, since in many communities Hispanic companies haven't found entry into government contracting. "All of us have to be more watchful," she says. "You can't study or practice economics without politics. Our economic capacity gives us teeth in the political arena, and vice versa."
But Hispanic clout won't simply grow; it will transform into the larger economy, according to Martin Regalia, chief economist for the U.S. Chamber of Commerce. "Hispanic-owned businesses are becoming a much larger part of the U.S. economy," he says. "We wouldn't have the economy without them. That comes through clearly in the statistics."
Growth will change the identity of Hispanic companies. "Decades ago there were significant isolation trends in the United States. What we're seeing now is those isolation trends breaking down," he says. Before long, traditional minority businesses will become the majority. "We shouldn't even think of them as minority businesses," Mr. Regalia states. "In the past, the reason for classifying a business according to these types of socioeconomic classes was to examine questions of bias. Once such businesses are fully assimilated, those are not the types of issues an economist looks at."
For Mr. Espinoza, the Economic Census numbers reflect daily experience. In the city of Ontario, California, the number of Hispanic companies has more than doubled in 10 years, he says, garnering the attention of business organizations and consumers. "You see it in our downtown, where everything was in English when I was growing up," he recalls. "You go down the street now and you see more signs in Spanish. Before, it was a decaying part of town. Now the vibrancy and resurgence of downtown is the result of the Latino entrepreneur."
In his own business planning, he has decided to target Hispanic CEOs who own growing companies. "To me, information is like money," Mr. Espinoza declares. "The more you have, the better off you are. This specific [Economic Census] information is going to help me because it's targeting the Latino community. This is invaluable."
More Data on the Web
For downloadable versions of these charts and others, visit our Web site at HispanicBusiness.com/extra>www.HispanicBusiness.com/extra.