Black-owned businesses remain on the rise in America – and that’s good for everyone.
A new report from The Brookings Institution in Washington, D.C. – spearheaded by Brookings Metro, the organization’s community outreach arm, and the Path to 15 | 55 initiative, which aims to grow Black-owned businesses – indicates that Black entrepreneurs were drivers of significant economic growth in the U.S.
Over half of the 132,000 new employer businesses – as in, businesses that provide workers with jobs – created between 2017 and 2022 were launched by Black business owners. Black-woman-owned firms experienced an especially significant boom in this time frame, with the number expanding by 71.6% since 2017, and their revenues growing by 82.1% overall. Researchers uncovered these findings by crunching U.S. Census Bureau data.
“This growth not only creates a more inclusive business environment, but also a more competitive and dynamic national economy,” researchers wrote in the study, which was published this week. To be specific, Black-owned businesses added $212 million in revenue to the economy, and paid out more than $61 million in salaries to employees in 2022 (the most recent year for which data is available).
During a livestream panel discussion held Thursday to break down the study’s findings, conversation moderator Tynesia Boyea Robinson, who is president and CEO of business consultancy CapEQ, noted: “Targeting support for communities that have long been divorced from opportunity does not come at the expense of others. In fact, it … helps drive national economic recovery.”
All of this beneficial growth by Black entrepreneurs comes in an environment that has long been under-supportive of Black business owners. From persistent problems like finding or saving startup cash, to the more recent, disproportionate harm Covid caused the Black community — including its businesses — they experience myriad difficulties at every stage of running a firm.
Moreover, investment firms and banks are traditionally run by mostly white people, who statistically have had trouble trusting Black-owned businesses or understanding how they address the needs of non-Black customers. And Black women — who continue to start businesses at a rate nearly double that of white women — routinely get caught at the intersection of sexism and racism.
And that’s before the second administration of President Donald Trump began targeting and rolling back diversity, equity and inclusion initiatives – both by eliminating them altogether in the agencies the federal government controls, and by forcefully encouraging rollbacks of such practices throughout the private sector.
Panelist Nicole Elam, who is president and CEO of the National Bankers Association, pointed out that VC firms in particular are regressing in this regard – both in terms of who they hire internally, and who they give funding to, which makes it tough to ensure that “Black businesses remain on folks’ radars.”
Indeed, there is still a long way to go toward achieving true equity, and a widely supportive entrepreneurial landscape – as Brookings Institution researchers note. Though 3.3% of businesses in the U.S. were Black-owned as of 2022, that representation still falls far short of Black Americans’ overall share of the national population (14.4%). They had the third-lowest representational share of employer business overall.
Making the effort to better support Black entrepreneurs matters, experts add. “These business owners support their communities by creating jobs and driving local economic development,” researchers said in the report. “And while it’s difficult to say what national business creation trends may have looked like without this growth, it’s no stretch to say that the explosion in the racial diversity of business owners helped American enterprise.”
During the livestream discussion, Elam noted that “the key now is adaptability.” Boyea Robinson added that Black business owners are uniquely poised to confront the challenges that face them – because as entrepreneurs, and as marginalized people in America, they are accustomed to weathering tough times. “We meet the moment, whatever the moment is,” she noted. “We have to continue to do that.”
