Bruce P. Corrie, PhD
Concordia University-St. Paul, MN
Recent national reports document interesting trends in African American entrepreneurship.
- The Global Entrepreneurship Monitor, 2003 found that Black Entrepreneurship is the highest among all groups in the
. Total entrepreneurial activity for Blacks was 16.5 % compared to 10.8 % for Whites. Blacks had the highest rates for both opportunity based as well as necessity based entrepreneurship. Black entrepreneurs tend to be in age group 25-34 years. USA
- According to another report, The Panel Study of Entrepreneurial Dynamics, a longitudinal study of 64,622
- Black men and Black women are about 50 percent more likely to engage in start-up activities than Whites.
- Education significantly predicts nascent entrepreneurship for blacks: approximately 26 of every 100 black men with graduate education experience efforts to start a new business comparing to 10 of every 100 white men.
- Blacks in urban areas show a greater tendency to start businesses.
- Black women in the middle age groups, 25-54, have a much higher rate of entrepreneurship than other groups.
- Black men and women with higher income levels are more likely to start a business. They had the highest nascent entrepreneurship rates than all groups in the income range $76 K and up.
- Blacks working in full time jobs had the highest nascent entrepreneurship rates than blacks working part time or not working.
- According to recent studies by Small Business Administration, Office of Advocacy, during the period 1997-2001:
- The number of Black owned firms increased from 308,260 in 1982 to 780,770 in 1997.
- Total receipts of Black owned firms in 1997 was $71 billion dollars
- Black share of business ownership increased from 2.56 percent in 1982 to 4.2% in 1997. Black-owned firms made up 15 % of minority employer firms.
- Black-owned business survival rate increased with the size of the business, reaching 75 % with receipts between $500,000 and 999,999. Survival rates were the lowest in the $10-25,000 range for receipts.
- Black-owned business expansion rates were the highest in the less than $5000 range for receipts.
- The contraction rates were the lowest in the firms with low receipts.
- The receipt range of $10,000 to $50,000 appears to be a critical stage for the survival and expansion of Black-owned businesses.
- The sectors with the highest survival rates for Black-owned businesses were Finance, Insurance and Real Estate, Agriculture, Forestry and Fishing, Services, Wholesale and Manufacturing.
- Top sectors for Black owned firms were Services (53%), Retail (10 %), Transportation (8%) and Construction (7%).
- During the period 1990-2000 Blacks received 4.15 % of SBA 7 (a) loans and 1.59 % of the 504 loans.
- During the period 1997-2001, in Minnesota Black-owned businesses were the only minority group showing net gain in jobs created.
- During the period 1997-2001, in Minnesota Black-owned businesses had a survival rate of 71 % compared to the state average of 74 %.
- During the period 1997-2001, in Minnesota Black-owned businesses had an expansion rate of 33 % equal to the state average.
- During the period 1997-2001, in Minnesota Black-owned businesses had a contraction rate of 14 % lower than the state average of 23 %.
- States with the highest survival rates for Black-owned businesses were
Wyoming(93.5%), Utah, D.C., North Dakotaand (72 %). Rhode Island
- According to the 2002 Economic Census:
- Blacks firms make up 1.6 % of all employer firms in the country
- 31 % of Black employer business owners have some college education
- 25 % of Black employer business owners had a post-graduate degree, the second largest group in the country after Asians.
- A survey of clients of top non profits in
revealed that Blacks make up the largest percentage of their clients: MEDA (46 %), NDC (40 %), WomenVenture (21%). For the clients using the state’s Urban Initiative Funds, 46 % were Black. Minnesota
Bruce P. Corrie, PhD Emerging Markets Series
651 641 8226 email@example.com