Hispanic Business: A Key to the Future

By: Daniel H. Jara  NJBiz 2-27-06

Our state currently enjoys one of the highest standards of living in the

country. This high standard exists due to our long-term economic growth

which creates new jobs and provides more opportunities to residents. The

engine behind this economic growth for New Jersey has been – and will

continue to be – entrepreneurship. Entrepreneurs create the companies

that enable us to enjoy a high standard of living. They are among our

most important residents and we must, as a community, ensure that New

Jersey becomes the “location of choice” for current and future

entrepreneurs. This allows us to achieve two goals: First, keeping New

Jersey-based entrepreneurs here and secondly attracting entrepreneurs

currently living in other states to New Jersey. In order to make this

happen, we need to answer two questions: Who comprises the entrepreneurial

community and what must we do to attract them to New Jersey.

Entrepreneurs are a diverse group not easily conforming to a single

descriptive profile. They vary based on education, life experience,

motivation and goals. They do, however, share certain trends and

demographic characteristics that allow us to formulate a good picture of

who they are. Among the largest and fastest growing identifiable

entrepreneurial groups are Hispanics. Hispanics are launching new

businesses at more than twice the right of the overall population and will

soon control over 2 million businesses. Why do Hispanics demonstrate a

relatively high incidence of entrepreneurship relative to other groups?

There are several key reasons:

1. Heritage. Entrepreneurship is innate to many Hispanics due to

experiences in Latin America where economic opportunities outside of

entrepreneurship are very limited.

2. Practical reality. Hispanics raised and educated outside of the United

States may find that assimilating into corporate culture in the U.S. is

very challenging. Launching a new company is an effective way to achieve

economic independence while avoiding the real and perceived barriers

inherent to large companies.

3. Risk-tolerance. Over 40 percent of Hispanics in the United States were

born outside the country and emigrated here. Leaving your native country

in search of opportunities abroad prepares one for taking risks in life.

In relative terms, starting a business is far less risky then adopting a

new country.

With an understanding of who entrepreneurs are and what motivates them,

all members of the New Jersey community can play a role in attracting them

to the state. Large, established businesses can give new and small

businesses the opportunity to serve as suppliers. Developing formal

programs and initiatives – where managers are provided incentives to

procure from small businesses – is an excellent way to start. Consumers

can consciously make an effort to try products and services produced by

local entrepreneurs. The financial community can develop additional

financing structures and funding products that target start-up ventures

and small businesses. Access to capital is considered by Hispanic

entrepreneurs to be one of the top 3 hurdles to starting a new venture in

New Jersey. State and local government can play a role by reducing the

barriers to entry required to launch a business in New Jersey.

Streamlining registration paperwork, clarifying regulatory requirements,

providing tax incentives to entrepreneurs and creating a competitive

environment for benefits providers are some key steps that can be taken.

Hispanic entrepreneurs will start businesses in the communities that

provide the most attractive package of incentives and opportunities.

Let´s make New Jersey the community of choice for entrepreneurs so we can

continue to reap the long-term economic benefits for generations.