Supplier Diversity: The Importance of Creating Opportunities for Minority-Owned Businesses

We're Not There Yet

A deeper look into US business ownership shows that inequality is still at the heart of many industries. A 2020 Brookings article revealed that Black people comprise around 14% of the US population, but Black business accounts for only 2.2% of the country's 5.7 million employer businesses. Meanwhile, Hispanic-owned businesses have grown 34% in the last 10 years to 4.65 million, the fastest-growing segment.

The Brookings article explains the impact supporting Black-owned businesses could have on the US economy. If Black businesses reached parity with non-Black businesses, this could create over 1.6 million jobs, increase the pay of Black employees, and increase total revenue by billions of dollars.

Why Minorities Are Struggling to Get Businesses off the Ground

According to the Stanford Institute for Economic Policy Research, only 1% of Black business owners were able to obtain loans in the founding year of their new business, compared to 7% of white business owners. The inequality also creates a vicious cycle: fewer minority business owners mean fewer opportunities and fewer young people inheriting or learning how to run a business.

Why We Support Minority Business Owners

It is important to acknowledge the disadvantaged background that most minorities in the US come from and level the playing field so people of all races and classes can enjoy the same opportunities. McKinsey predicts the Black-white wealth gap will cost the US economy between $1 trillion and $1.5 trillion each year until 2028. Supporting minority-owned businesses is the best way to close this gap and strengthen communities.