Number of Minority-Owned Businesses Increases but Economic Parity Remains Elusive

WASHINGTON--(BUSINESS WIRE)--The U.S. Commerce Department’s Minority Business Development Agency (MBDA) and the U.S. Census Bureau today announced that the number of minority-owned firms increased by 46 percent to 5.8 million between 2002 and 2007 according to data from the Preliminary Estimates of Business Ownership by Gender, Ethnicity, Race and Veteran Status: 2007, from the U.S. Census Bureau’s 2007 Survey of Business Owners.

“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. “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 had average gross receipts of $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.”

As the nation’s population demographics change, so too has the United States business community. Specifically:

•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 age 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.

•Black, or African-American-owned businesses grew to 1.9 million firms in 2007, up 61 percent from 2002 - the largest increase among all minority-owned companies; and generated $135.6 billion in gross receipts, 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.

•Minority-owned firms employed approximately 5.9 million people in 2007, up from 4.6 million in 2002.

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