Refusing to use the recession as an excuse to not be employed, African American’s broke out on their own to thrive during the most recent recession. From the fourth quarter of 2007 through fourth quarter of 2009, the total number of non-agricultural self-employed people fell. But the number of self-employed Blacks increased 5.7 percent. In contrast, the number of self-employed Whites decreased 3.4 percent, self-employment among Asians decreased 10.5 percent, and self-employment among Latinos remained flat. Additional statistics released from the 2008 U.S. Global Entrepreneurship Monitor Report shows that Blacks “have higher levels of start-up activities than whites (13.9% vs. 8.4%) while having significantly lower rates of established ventures (8.1% vs. 1.8%).” Perhaps the strong growth trend in Black self-employment resulted in increases during a period when other races experienced declines.
Since the research has just been completed at the end of 2009, there are no definitive answers yet as to why this occured. Here are some a few reasons why this trend could have occurred:
- The ratio of more African American start ups being created in relation to white startups is much higher. Basically, compared to the mid 2000’s, there are significantly more African American startup companies being created which increases the overall percentages. This is a good thing and the numbers should continue to increase.
- The shrinking economy has forced many people to start their own company “on the side” as they try to maintain steady employment in a rough economical atmosphere.
- In general, the majority of African American startups are in the personal service industry which was not hit as hard as the manufacturing, finance and construction segments.
- The number of African American Angel investors has increased signifcantly over the past three to five years. These angel investors have been able to assist African American startups who have had recent difficulty getting standard financing from a bank. A great resource for finding angel investors is the Go Big Network.
- Depending on what area of the country you are living in, there are more incentives being passed by lawmakers to encourage entrepreneurship in general. I know this is a fact in California.
It would be interesting to see the breakdown of these increased numbers based on geographical location. I would predict that growth would be seen in the West Coast, Mid-Atlantic Region and the South (particularly North Carolina and Georgia). Why do you feel black self employment rose and which area of the country do you think experienced the highest growth?
