February 12th 2024.
Recent data from the U.S. Census has shown that there has been a 14% increase in the number of Black-owned businesses since 2020. This is certainly a positive trend, but there is still a significant underrepresentation of Black-owned businesses compared to the Black population in America. It's also worth noting that this growth has been primarily concentrated in a few industries.
The majority of Black-owned businesses in 2021 were in the healthcare and social services sector, followed by professional, scientific, and technical services. Other top categories include administrative, waste management, and remediation services. A survey conducted by the Pew Research Center in January 2023 revealed that around 60% of Black adults see supporting Black businesses as an effective strategy towards achieving equality in the United States. Additionally, nearly 40% of Black adults believe that having Black-owned businesses in Black communities is equivalent to supporting Black businesses and establishing a Black national political party.
In December 2023, the White House released a fact sheet highlighting the rise of Black businesses. The sheet also mentioned several initiatives led by the Biden-Harris Administration, such as the Small Business Community Navigators Pilot Program. This program allocated $100 million to 51 organizations, including the U.S. Black Chambers of Commerce and the National Urban League. According to an analysis by the Small Business Administration (SBA), this program provided training and counseling to over 350,000 small businesses, 43% of which were Black-owned. This $100 million investment is the largest federal contribution towards supporting minority small businesses. Additionally, the SBA increased its share of loans going to minority-owned businesses from 23% to 32%.
As stated in the fact sheet, "When Black businesses do well, they create jobs, generate wealth in their local communities, and make the broader economy stronger." This sentiment is strongly supported by a 2020 report from the Brookings Institution, which suggests that if Black businesses had equal access to capital and resources as white businesses, it would significantly boost the American economy.
In recent years, there has been a significant increase in the number of Black women owning businesses. In 2020, they accounted for 37% of Black-owned businesses, and by 2023, this number had risen to approximately 42%, approaching gender parity. According to the Brookings Institution, both male and female Black business owners were more likely to cite a desire to help their community as a reason for starting their businesses.
Despite facing challenges in securing funding, Black businesses experienced a significant rise during the pandemic. Diamonte Walker, the deputy executive director of the Urban Redevelopment Authority of Pittsburgh, believes that this is a sign of progress that could extend to other aspects of Black financial wealth. In an interview with US News & World Report, Walker stated, "You see a glaring wealth gap between Black people and white people. That disparity is felt not only on an economic level but on a psychological and emotional level... As these Black businesses start to thrive, it signals what's possible."
In related news, a Black entrepreneur and business owner recently launched a free webinar to assist 1,000 Black-owned startups. This is just one example of the growing support for and recognition of the importance of Black businesses in the economy. The post on Black Enterprise titled "Black-Owned Businesses See 14% Increase, Reflecting Positive Growth Amidst Challenges" further emphasizes the resilience and potential of Black businesses.
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