The University’s total business with minority-owned companies increased more than 50 percent from last year, according to the University’s Office on Community Economic Development.
Out of $706 million spent last year by the University on campus-wide goods, services and constructions costs, the report tallied $45.6 million spent toward local businesses owned by women, minorities and disabled persons — all of which were targeted businesses for community economic development.
The minority-business expenditures exceeded the office’s original projection by more than $12 million — with one-third of the expenditure amount directed toward women-owned businesses and roughly two-thirds going toward minority-owned businesses.
According to a University small business program, there are no preferences or set-asides for University purchasing bids. But all departments are encouraged to buy from targeted businesses.
The University directed 7 percent of its total expenditures to targeted businesses, which closely matched the percentage of minority workers utilized by the University last year — the office estimated that ratio to be 6.6 percent.
The targeted expenditure effort is part of the Board of Regents’ plan to develop and improve neighborhoods and businesses of diverse communities within the area that have been historically ignored or economically underrepresented within the community at large.
Citing concern over the health of existing minority businesses, development director D. Craig Taylor said there are more than 11,000 minority-owned businesses in Minnesota and that nearly 43 percent of total state tax revenue is derived from minority-owned businesses.
Still, the companies struggle to compete and thrive amid larger corporations.
Taylor, who spent 12 years as a corporate manager before returning to the University two years ago, said he was concerned over the state of minority communities in general.
He said some black communities struggle to develop economically, in part, because of high incarceration rates of black male adults who then cannot help generate suitable incomes for working families.
“People all over want things like a decent wage and decent benefits. … (And) disparity is not closing, but widening,” said Taylor, a University graduate who has a master’s in business administration.
In his new role as economic director in an educational environment, Taylor mentioned one possible economic solution to larger minority problems: the attraction and retention of students of color by universities.