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Minority Entrepreneurship Drives Small Business Growth

By Thomas G. Exter, chief demographer at TGE Demographics
For Ebony Marketing Systems Inc.

Small businesses owned by African Americans, Asians, and Latinos significantly outpaced all others in post-recession business growth. According to the Census Bureau’s Survey of Business Owners (SBO), non-minority firms grew by only 9.9 percent between 2007 and 2012, the latest years for which such data are available. Meanwhile, minority owned firms more than doubled at a five-year pace of 152 percent.

The SBO survey is fielded along with the bureau’s Economic Census, every five years on the two and the seven. The 2012 data on this topic was just released in February 2016; yes, it takes time to compile all the data. The context, of course, is the Great Recession, coming on the heels of the 2007 data point, which caused a huge slowdown in the entrepreneurial activity. The Kaufman Institute, known for its annual tracking of entrepreneurial trends, recently published a report showing a long-awaited up-tick in entrepreneurial trends.

A key question is: Who and what types of businesses are driving the resurgence? The SBO shows a persistent drop in firms with employees with most of the overall increase coming from firms without employees, that is, one-person entrepreneurs. Who are these job creators? African American entrepreneurs nearly tripled (up 245 percent) from 748,550 to 2.6 million. Latino entrepreneurs more than doubled (up 171 percent) from 1.2 million to 3.3 million. Asian entrepreneurs grew 68 percent from 1.1 million to 1.9 million. Non-minority entrepreneurs grew only 9.9 percent from 17.2 million to 19 million. Firms with employees, those creating jobs for others, were still down 11 percent from pre-recession levels through 2012.

Remember, these figures represent change between 2007 and 2012, and therefore understate the depth and persistence of the recession in some markets. Nevertheless, the SBO provides strong evidence that single-person entrepreneurs, led by African Americans, Latinos, and Asian Americans have propelled innovation and small business growth to new heights. To the extent that the experiences of these entrepreneurs can be shared and learned by others, the country can only benefit.


  1. Allegro Milo says

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