Business ownership by minorities climbed steadily throughout the last decade, according to a report this week from the U.S. Commerce Department’s Minority Business Development Agency (MBDA) and the U.S. Census Bureau.
Minority business ownership grew by 46 percent to 5.8 million between 2002 and 2007, according to the report.
“It is encouraging that the minority business community is growing and making progress relative to all U.S. firms, but economic parity remains elusive,” MBDA’s National Director, David A. Hinson said in a statement. “While the number of minority-owned businesses continues to grow, they are still smaller in size and scale compared to non-minority-owned firms.”
In 2007, average gross receipts for minority-owned firms increased to $179,000 from $167,000 in 2002 — still well below gross receipts for non-minority-owned firms, which averaged $490,000.
“We must continue to close this gap,” Hinson said. “It is unacceptable, particularly during an economic crisis that disproportionately affects the minority business community, to have this ongoing disparity.”
Some key findings of the data include:
- Between 2002 and 2007, the number of minority firms grew by 46 percent, compared to 18 percent for all U.S. firms, and compared to 13.7 percent growth for the minority population aged 18 and older during the same period.
- Minority-owned firms employed approximately 5.9 million people in 2007, up from 4.7 million in 2002.
- Asian-owned firms grew 41 percent to 1.6 million from 2002. Asian-owned firms continue to generate the highest annual gross receipts at $510.1 billion in 2007, increasing 56 percent from 2002.
- The number of Hispanic-owned businesses totaled 2.3 million in 2007—up 44 percent from 2002. Receipts for Hispanic firms increased 55 percent to $343.3 billion.
- African-American-owned businesses grew to 1.9 million firms in 2007, up 61 percent from 2002 , which represents the largest increase among all minority-owned companies. African-American businesses generated $135.6 billion in gross receipts during the period, up 53 percent from 2002.
- There were 237,203 American Indian and Alaska Native-owned businesses in 2007, up 18 percent from 2002, generating $34.2 billion in gross receipts, an increase of 27 percent.
- Native Hawaiian- and Other Pacific Islander-owned businesses totaled 38,854 in 2007, up 34 percent from 2002. While these firms’ reported the largest increase in receipts among all minority-owned firms in 2002 (63 percent), the total amount reached only $7 billion.
MBDA, an agency within the U.S. Department of Commerce, assists minority entrepreneurs and business owners with consulting services, contract and financing opportunities, bonding and certification services, building business-to-business alliances and executive training.
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