Helping minority firms grow

A new initiative aims to grow minority-owned companies in Boston, a project that comes amid plans to relaunch a directory of minority- and women-owned businesses that was created for last year's Democratic National Convention.

The new program, called Initiative for a New Economy, launched yesterday with $1.3 million in funding over three years. The money goes toward setting up an office and hiring a chief executive to help minority-owned businesses position themselves as suppliers to major corporations. The program also will call on top corporate executives to commit to giving contracts and guiding minority companies through the complex corporate bidding and procurement processes.

The initiative comes as the Greater Boston Chamber of Commerce relaunches the DNC vendor directory next week. Originally hailed by Mayor Thomas M. Menino as a document that would be used long after the Democratic convention's end to help minority- and women-owned businesses, the online directory was pulled from the Internet in September, just two months after the event.

Officials said yesterday that the initiative and the directory are unrelated, but nonetheless represent a growing attitude among Boston's business and political establishment that enduring economic gaps along racial lines must be eliminated. ''We are now, as of the 2000 census, a majority-minority community. Clearly the economic activity of this region does not reflect that fact," said William Van Faasen, chief executive of Blue Cross and Blue Shield of Massachusetts.

Added Menino: ''Our entire city of Boston is more diverse than ever. Change must be reflected everywhere."

Blue Cross, along with the United Way of Massachusetts Bay, the Boston Foundation, and the city have each committed $100,000 a year to fund the initiative over the next three years. Liberty Mutual Group is giving $100,000 for one year.

A new study of minority-owned businesses prompted the initiative. The study, conducted by Boston Consulting Group and Babson College, found that the number of minority-owned firms in the Boston area multiplied at a faster clip than other businesses.

Still, the report said, minority-owned companies are under-represented in the state's economy.

The number of minority-owned businesses in the state grew by 13.5 percent between 1997 and 2002 to about 60,000, according to the study. Those companies represented 10.4 percent of the state's businesses in 2002, while ethnic minorities were 18.4 percent of the state's population.

Many of those firms lack the capacity to land lucrative contracts with major corporations that could help them expand, the report said.

Darnell Williams, chief executive of the Urban League of Eastern Massachusetts, said many minority firms are too small to meet the needs of bigger companies, so the few minority firms that can handle bigger jobs grow bigger.

''There should be an opportunity for that circle to be expanded," Williams said.

That's why the chamber plans to revive the DNC directory, said spokeswoman Erin Murphy. It will roll it out in three phases, starting as an online listing of companies and becoming an interactive directory by the year's end.

The directory will include about 300 companies, Murphy said.

Alexis Brooks, whose Inside Cable networking firm won a contract with the DNC through the vendor directory, said she hoped the new efforts would expand opportunities for firms like hers but doesn't expect change to happen overnight.

''This is something that in Boston has been missing for so long," Brooks said. ''It's going to take some time."

Keith Reed can be reached atreed@globe.com. Globecorrespondent Madison Park contributed to this report.