Rural Minority Business Development

This study is a first attempt to undertake formal research and policy analysis of a heretofore neglected topic, rural minority business development. Data show that only about one-sixth of all minority-owned firms are located in rural (nonmetro) areas with some groups recording even lower percentages. For example, only 11 percent of Hispanic firms were found in rural areas in 1987. However, proportions of nonmetro Hispanic firms reach 20 to 50 percent in some southwestern states and proportions of nonmetro black enterprises reach 30 to 70 percent in some southeastern states. Review of the research literature discloses that rural minority businesses experience critical problems associated with four kinds of capital needed to support any successful enterprise: physical, financial, social and human. Examples are given of programs devoted to rural enterprise development which address problems related to the four forms of capital. Insights gleaned from the examples and additional observations by policy analysts are used to suggest policy directions for expanding rural minority business.