June 11, 2014
Women of Color Are Driving Entrepreneurship
Women of color are a principal force within the U.S. entrepreneurship community, according to a new report released by the Center for American Progress. The report lays out the current landscape of women of color entrepreneurs, explores the factors in the traditional workplace that push women of color to start their own businesses, and offers recommendations in order to ensure women of color continue to pursue entrepreneurship and thrive.
“Empowering women of color to capitalize on their own talents is a must if we hope to strengthen our nation’s economy,â€ says Farah Ahmad, policy analyst for Progress 2050 at CAP, Â and author of the report. “Their contributions to the economy by providing services, products, and jobs, all while contributing to their own families’ economic stability, is an opportunity.â€
With U.S. Bureau of the Census projections predicting women of color will make up the majority of all women by 2045, the success of entrepreneurial women of color, breaking down of barriers to entrepreneurship, and supporting more equity in the workplace has become vital, notes Ahmad.
The number of women-owned firms in the United States grew by 59% from 1997 to 2013–one and a half times the national average. Women of color are the majority owners at close to one-third of all women-owned firms in the nation. African American women are both the fastest-growing segment of the women-owned-business population and the largest share of female business owners among women of color, at 13%.
African American women-owned businesses grew by 258% and Latina-owned businesses grew by 180%. African American women are starting businesses at a rate six times the national average, and their 2.7 million firms are currently generating $226.8 billion in annual revenue and employing almost 1.4 million people.
According to the report, women of color are overcoming significant obstacles in order to start their own businesses, some of which include difficulties in accessing capital or bank loans. Still, women of color are increasingly becoming entrepreneurs because they may not be satisfied with their position in today’s traditional workplaces, where they are overrepresented in the low-wage job sectors with few benefits, have higher unemployment rates than both white women and white men, and continue to be underrepresented in professional and managerial positions. Feeling marginalized or excluded in their workplaces and finding advancement within their workplaces especially challenging, particularly due to their lack of access to networks and the resulting lack of social capital, women of color continue to turn to entrepreneurship.