Minority Entrepreneurship

Between 1997 and 2002, the number of U.S. firms owned by minorities grew at three times the rate that of firms in general -- a fact that reflects the reality that ethnic communities in the United States are expanding rapidly. Indeed, more than 85 percent of the estimated population growth between now and 2050 will come from minority groups.

A close look at the breakdown of distribution of business ownership by race, gender and ethnicity reveals significant imbalances. Women, for example, are under-represented as majority owners of firms, and the under-representation increases as one goes up the ladder.

Much the same can be said of Hispanics, who account for 13.5 percent of the population, but just 7 percent of firms and less than 1 percent of revenues. African-Americans account for 12.4 percent of the population, but only 5 percent of firms and less than 1 percent of revenues. By contrast, for Asian-Americans, the percentages of firm employees and receipts are in approximate parity to the group's percentage of the population as a whole, and they own a share of firm numbers higher than their share of population.

Milken Institute