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June 05, 2022

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Asian American businesses building back from pandemic

Susan Au Allen is national president and CEO of the US Pan Asian American Chamber of Education Foundation or USPAACC. In 1984, she founded USPAACC with a group of business and civic leaders in Washington, D.C., and California to bring the diverse Pan Asian American business and professional people together as one unified voice in business, commerce and trade. 

Here, she discusses the state of Asian American and Pacific Islander business in the U.S., recovering from COVID-19, the outlook for supplier diversity and more. 

By Susan Au Allen

The protracted effects of the pandemic that cost lives, disrupted work and destroyed countless livelihoods in the past two years have been especially trying for the Pan Asian American and Pacific Islander business community.

While the state of the more than 2 million Asian American-owned businesses is generally sound, confident and growing stronger each day, there is still an uphill climb for many enterprises in various sectors. 

The onslaught of twin pandemics — the coronavirus pandemic and the pandemic of racism — have been devastating for Pan Asian American businesses. Both issues are beyond their control and have a long-lasting impact. The upsurge in anti-Asian sentiment and violence led to limited days and hours open, less foot traffic and heightened fear and anxiety — on top of the ruinous effects brought by the pandemic.

Still, despite these challenges, many business owners rolled up their sleeves, made tough decisions and pivoted to stay afloat. They kept the flame of entrepreneurship alive and burning brightly.

As the U.S. economy rolls back to pre-pandemic levels, there are still many Pan Asian American and Pacific Islander-owned businesses that continue to face challenges in varying degrees, depending on the sector to which they belong. 

At the height of the pandemic, 27%, or around 233,000 Pan Asian American-owned enterprises shuttered, according to some estimates. 

According to Reuters, some 90% of small Asian-American firms in a New York Federal Reserve and AARP report lost revenue last year, greater than the 85% for Blacks, 81% for Hispanics and 77% for whites.

Research from Robert Fairlie, an economics professor at the University of California, Santa Cruz shows Asian-owned businesses nationwide have been the most negatively impacted of all demographic groups by last year’s pandemic, according to cnbc.com.

According to Scientific American, in California, 83% of Asian Americans with high school degrees or less filed unemployment claims in California, compared to 37% for non-Asians, according to a UCLA report in July. During the lockdown, Asian unemployment jumped to 25% in New York City — the largest increase of all races, according to a report from the Asian American Federation last October.

Those greatly affected came from the hospitality, food services, personal services and retail sectors. 

This dreary fact was not surprising, as Pan Asian Americans are disproportionately over-represented in these sectors. The stringent public health restrictions caused a steep decline in customer foot traffic, resulting in a sharp decline in sales. 

So, business owners had to find new revenue streams to keep their heads above water.

Dine-in or take-out?

For example, Saint Hung, owner of Universal Processing LLC, a credit card processing company based in New York City, experienced that downturn because his clients’ sales dropped precipitously. He pivoted and taught credit-card processing to small retail businesses and helped them create online ordering systems, among other efforts.

One of Hung’s clients is China Spice, an Indian-Chinese restaurant in New Jersey that is a popular dine-in and takeout place. When the pandemic hit and foot traffic came to a standstill, the restaurant lost nearly 90% of its business. Universal Processing helped the restaurant set up an online ordering system to reach out to customers. Soon after, takeout orders increased, and the business slowly recovered. 

Neighborhood lifelines

Other struggling Asian American businesses relied on neighborhood lifelines — internal networks or support systems in their own ethnic enclaves like Chinatown, Koreatown, Japan Town, Little India, Little Manila and Little Saigon. 

Mom-and-pop businesses like Culture-Lite Printing Inc. — a family-owned printing shop in San Francisco’s Chinatown — sought the help of BeChinatown, a nonprofit coalition of community leaders, residents and merchant property owners. In dire straits, the 30-year-old printing shop could not pay rent or utilities. BeChinatown helped it negotiate rent. The Northeast Community Federal Credit Union also stepped up with a $35,000 loan and assisted it with partial payments toward rent. 

These examples show that despite the disruptions and challenges, Pan Asian Americans can pull together as a community. 

Making a difference

To help small, minority and other diverse businesses recover faster from the pandemic, in October 2021, the U.S. Small Business Administration selected the US Pan Asian American Chamber of Commerce Education Foundation or USPAACC as one of eight national Tier I grantees to be part of its $100 million nationwide Community Navigator Pilot Program, or CNPP. With 15 USPAACC spokes covering five critical states — California, Georgia, Illinois, New Jersey and Texas — the initiative provides recovery services to underserved and unserved businesses hard-hit by the pandemic and those who had never accessed the free services the SBA offers: training, technical assistance, financial services and access to capital services and business development advisory services. With these free services, the best is yet to come for America’s small businesses.

“The USPAACC Southeast Chapter is leveraging the CNPP grant to expand and multiply its efforts to reach and assist Pan Asian American as well as Black, Hispanic, Native American and other small businesses that have suffered financial and business hardships due to the recent pandemic,” said Lissa J. Miller, senior vice president and head of supplier diversity, Truist Bank, and board chair, USPAACC-SE. “We appreciate the opportunity that the SBA has afforded us to be a source of renewed hope to our small-business community.”

On the West Coast, USPAACC has further strengthened its efforts through its five spokes. 

“The CNPP has enabled us to continue helping the underserved small-business owners in Orange County, California,” said Jay Ungos, founder and president of The TAG Network, a project manager of the USPAACC Orange County spoke. 

“During these challenging times, we are able to reach more businesses and help them grow by giving them access to programs, events, webinars and resources that can have a big impact on their recovery,” he added. “Thanks to USPAACC and the SBA, we are able to make a difference together in our community.”

Driving innovation

Today, as supply-chain bottlenecks begin to ease and businesses inch their way to the next normal, leveraging technology and accelerating digital transitions have become an even more urgent undertaking.

President Biden’s trillion-dollar infrastructure investment to rebuild the country’s infrastructure and strengthen broadband is good news for many. Growth in digital infrastructure will drive innovation forward and that extends to underserved and unserved communities — Asian, Black, Hispanic, Native American, disabled, veterans and women. 

Emerging technologies like artificial intelligence are expected to have more business applications. These will create more sunrise industries, a ripple effect with more job opportunities and more robust business growth. 

Businesses in the STEM-related niche and government contractors — most of whom have been largely untouched by the pandemic — are now well-positioned to thrive in the marketplace. A few Pan Asian American businesses are in STEM fields — information technology, biotechnology, engineering, etc. — and these innovative enterprises must have better access to capital and no barriers to entry to thrive and succeed.

Indeed, the national economy is at an inflection point — a new environment that is more tech-based. It is one of many shifts, both small and tectonic, that could offer a myriad opportunities. 

For many Pan Asian American businesses, it would take a monumental step forward to build back from the pandemic. But as long as more resources from the public and private sectors are made available to help this community refocus, retrain, retool and navigate available opportunities, then its vibrant resurgence will be ensured in the new economy. 

To learn more about USPAACC, visit uspaacc.com.