Economic Empowerment through EntrepreneurshipNovember 2, 2015
Entrepreneurship is a key factor in local economic development. Research shows entrepreneurship supports the creation of local wealth, can create pathways out of poverty and creates jobs at a lower cost than do other strategies. While entrepreneurship is growing in African-American communities, it still lags other communities both in quantity and scale. Improving the disparities in entrepreneurship can help improve the overall economic disparities that exist in the African-American community.
According to recent data from the Census Bureau’s Survey of Small Business Owners, African-Americans comprise 13 percent of the American population but own just 9 percent of American businesses. These businesses generate only 1 percent of the nation’s sales revenue and represent just 2 percent of all U.S. businesses that employ workers.
In spite of these disparities, African-American entrepreneurship is gaining momentum. As the chart to the left shows, the number of African-American businesses increased sharply, from roughly 800,000 in 1997 to nearly 2.6 million in 2012 (the most recent period for which data is available).
To explore opportunities entrepreneurship can provide African-American communities, the Federal Reserve Bank of Kansas City’s Community Development Department launched a series of roundtable discussions across the Tenth District. These roundtables introduced an economic development strategy based on Grow Your Own entrepreneurship, and discussed how this strategy can help build a thriving entrepreneurial environment in African-American communities.
The roundtables included an overview of the current state of African-American business ownership in each community and discussion about how a Grow Your Own economic development strategy can be tailored for local community needs. Community members also participated in a discussion about opportunities and challenges to building a strong system for African-American business economic development.
For information on the roundtables email Dell Gines.