HispanicBusiness

Hispanic small-business owners often shy away from technology. In today’s economy, that’s a high-risk posture.

By Teresa Talerico
HISPANIC BUSINESS® magazine
May 2002

Frank Dominguez, president and CEO of Imperial Construction in Elizabeth, New Jersey, remembers when his employees punched an old-fashioned time clock and scheduled projects by scribbling them on sheets of legal paper. Like most small businesses starting out in the mid-1980s, his company handled many office tasks manually. Today, Imperial uses the software program Microsoft Project. The company has 60 Compaq Presario computers, a T1 line, and its own Web site. Stuck in morning traffic on the turnpike, Mr. Dominguez uses a wireless Palm VII to keep tabs on workers – whether they’re in Massachusetts, Louisiana, or Florida. Recently, he began using CamClock, a mobile, digital time clock that lets employees punch in from their construction sites around the country. “This technology has definitely improved my profitability,” says Mr. Dominguez. “This combination of the Palm Pilot and the CamClock has reduced my cost of labor massively.” Though some Hispanic-owned small businesses have embraced technology, many still lag behind. Less than 6 percent of Hispanic small-business owners have an e-commerce strategy, compared with 35 percent of non-minority small businesses, according to a study sponsored by Microsoft Corp. A 2001 Tomás Rivera Policy Institute study found that only 52 percent of Hispanic companies used computers and information technology, compared with 71 percent of African-American companies. The same study showed that Hispanic-owned businesses were less likely to have a Web site – 42 percent compared with 56 percent of their African-American competitors. “Hispanic small businesses are a little bit behind the times right now,” agrees Victor Cabral, vice-president of government and Hispanic affairs at Verizon Communications and co-chair of the IBM Hispanic Digital Divide Task Force. The reasons are myriad and can even be traced to early childhood access to technology. Experts say training, education, and incentives are vital to narrow the gap, especially since Hispanic small businesses are mushrooming. So why is there still a digital divide? Some businesses don’t have Web sites because they assume customers aren’t online. Or they say a niche business doesn’t lend itself to e-commerce. Carlos Garcia, co-owner of Endpak, a global paper bag manufacturer in Pico Rivera, California, says his company’s Web site is still under construction. He says his very specific market focus – Endpak manufactures industrial packaging for can companies – doesn’t warrant a large-scale site. “We don’t think it’ll be that effective a form of marketing, because of our niche market,” he says. “It’s a very limited number of customers. We haven’t pursued our Web site more aggressively because of that.” Carmen Fuentes, owner of Carmen’s Jewelry in Moline, Illinois, says Internet service is costly, and she relies on word of mouth from local customers. “I don’t have a computer in my business,” she says. “The Internet sends you a lot of bills. For now, I’m doing OK with what I’ve got.” Ms. Fuentes says she hopes to have a business computer next year, however, and concedes that an Internet site would enable her to advertise. Such situations are not uncommon, according to Michael Verchot, director of the Business and Economic Development Program at the University of Washington’s School of Business. His program assists small businesses in Seattle’s economically distressed communities; many of the businesses are minority-owned. In the last few years, the program has spent an increasing amount of time helping them with technology.