Indiana's Latino population -- one of every 20 Hoosiers -- is expected to spend some $7.3 billion this year, according to a new state study on business and economic development.
The Indiana Commission on Hispanic/Latino Affairs compiled extensive research on the estimated 351,400 Indiana residents of Latino descent, a fast-growing segment of the state's population.
Latino buying power is estimated to hit $7.3 billion for 2010, which is a roughly 50 percent boost from five years ago; in 2005, Latinos accounted for $4.9 billion in spending in Indiana. Nationwide, Latinos accounted for $951 billion in spending during 2008, according to studies by the Atlanta-based Selig Center for Economic Growth.
The Latino effect on Indiana's economy is not limited to Latinos spending money. The number of businesses owned by Latinos also has risen in recent years -- a time when the Latino population in Indiana has increased by up to 8 percent per year.
Gilbert Velez, president of the Hammond-based Northwest Indiana Hispanic Chamber of Commerce, said the commission study's findings reflect the reality of what he sees taking place across the region.
Velez said the fact that many Latinos have been among those who lost more traditional jobs with companies is what motivated many of them to take a crack at operating their own businesses.
"They still have to earn a living, and there weren't other jobs so many decided to work for themselves," he said.
In Indiana, businesses owned by people of racial or ethnic minorities, along with women, can register with the state's Administration Department, making it possible for them to get special status when government contracts are awarded.
The state reported that between 1997 and 2002, the number of businesses registered with the state as being owned by Latinos increased to 5,482 from 4,277. The typical Latino business owner in Indiana is between 39 and 45, with two-thirds being male. Just more than half originate from Mexico, while one-sixth are born in the United States.
Most of those businesses are involved in wholesale, retail and distribution, along with professional services and food services. Few would be considered large -- the average value of a Latino-owned business in Indiana is $656,831.
Most Latino-owned businesses in Indiana have five or fewer employees and have existed for fewer than three years. Most of them have employees who are capable of doing business in English.
"When a (Latino-owned business) has a better English-speaking proficiency, they are more likely to be integrated in their business model," the study said.
The Hispanic Chamber's Velez said he would like to see more initiatives that encourage training to help bolster the survival rate of Latino businesses. But he said the biggest problem he sometimes sees is of Latino business owners themselves adopting an attitude that their companies are somehow "second-rate" and only provide services to Latino populations.
"These companies are doing quality work, and they deserve to be recognized as such," Velez said.
The state also keeps track of when such businesses seek financing from banks. The state indicates 30 percent of businesses registered as Latino-owned applied for loans, with 81 percent of those applications being approved.
