Historically, minorities in the US and other parts of the western world have struggled to compete in competitive markets and industries. Today, around 18.7% of businesses in the US are minority-owned, which shows just how far the US has come in recent years when it comes to representing minorities in business.
We’re Not There Yet
Despite this promising statistic, a deeper look into the landscape of US business ownership shows that inequality is still at the heart of many industries. A 2020 article by Brookings revealed that Black people in the US comprise around 14% of the US population, but black business only accounts for 2.2% of the country’s 5.7 million employer businesses. On the other hand, the number of Hispanic-owned businesses in the US has grown by 34% in the last 10 years to 4.65 million, making Hispanic-owned businesses the fastest-growing segment.
The Brookings article goes on to explain just how big of an 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 in the US, increase the pay of black employees, and increase total revenue by billions of dollars.
Why Minorities Are Struggling to Get Businesses off the Ground
A quick look into the numbers shows exactly why the US is home to so few black business owners. 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 we can see today also creates something of a vicious cycle: fewer minority business owners mean fewer opportunities for minorities on an individual level, and fewer young people inheriting businesses or learning how to run a business from parents and relatives.
It’s the responsibility of people in power across the US to address these disparities. Whether this means owning up to and correcting the disparity in the number of minorities being offered start-up loans or simply supporting minority-owned businesses, we think it’s important that businesses and individuals do what they can to level the playing field for minorities which in turn will increase the quality and diversity of start-ups in the US.
Why we support minority business owners
First and foremost, it’s important to acknowledge the disadvantaged background that most minorities in the US come from, and do what we can to level the playing field so that people of all races and classes can enjoy the same opportunities.
But that’s not the only reason why it’s important to support minority business owners in the US. Like Brookings, Mckinsey predicts a wider impact on the US economy as a result of the inequality that exists in business ownership. The firm predicts that the black-white wealth gap will cost the US economy between $1 trillion to $1.5 trillion each year until 2028.
Supporting minority-owned businesses is the best way to close this wealth gap, empower people from minority backgrounds to succeed, and strengthen communities across the US. We support minority-owned businesses because it’s the right thing to do, not just for minorities themselves but for US nationals across the country, and we encourage our partners, clients, and other corporations across the US to do the same.
Get in touch
Servintec USA specializes in manufacturing and supplying complex steel and aluminum fabricated assemblies for the automotive, off-road, and green industries. As a minority-owned business, we can help you comply with diversity standards required by your OEM. To find out more about how Servintec USA can help you to support minority-owned businesses, contact us today. We’re always happy to discuss our engineering and design services with new partners from a range of sectors and backgrounds.