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American Entrepreneurship in Black and White (and All Colors)

The Great Recession of 2008 came with a counterintuitive twist – the unprecedented growth of minority-owned small businesses in the U.S.  But although the data shows that the representation of minority firms in the small business ecosystem increased from 2007 to 2012 while the percentage of white-owned firms decreased, the larger question is whether those minority firms also made headway toward achieving equity or parity with white-owned businesses.

New research by Henry McKoy, director of Entrepreneurship and Faculty at North Carolina Central University and former Kenan Institute Entrepreneurship Fellow, and Kenan Institute Director of Education, Aging and Economic Development Initiatives Jim Johnson reveals a mixed picture for minority business formation, growth and expansion during the study’s timeframe.

The findings, published in a recent paper titled Do Business Ecosystems See Color?, clearly show a rise in the share of business ownership by typically underrepresented ethnic and racial minorities, and a corresponding increase in equity and parity for minority-owned businesses without paid employees.  But for minority-owned businesses with paid employees, equity and parity with white-owned firms actually decreased.  Black-owned businesses fared the worst, owning just 13 percent of the firms they should have had at the end of the study.

Read the study in its entirety

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