(ThyBlackMan.com) According to a data series produced by the US Bureau of Labor Statistics (BLS) Business Employment Dynamics (BED) – a primary source for information on the labor market – the rate of business (as well as) job creation in America has been on a steady decline.
The number of jobs created, as the data series suggests, “has decreased from 4.1 million in 1994 to 3 million in 2015” which equates – when the trend is combined – to a decline of jobs in the overall number of new establishments that while contributing greatly to the economy, are inevitable to fail.
Moreover, a study by the National Bureau of Economic Research (NBER) shows that for about three decades, start-up activities in the United States has been slowing down.
The steady decline, to which many refer to as “dying”, is suspected to have been caused primarily by debt (i.e., student loans) and the increased taxes. However, there seems to be an exemption, and those are businesses started by minority entrepreneurs – particularly of the African Americans.
Kauffman Foundation (a registered 501 non-profit, private foundation based in Kansas City, Missouri), reported in its 2016 Startup Activity Index – a comprehensive indicator of new businesses creation in the United States – that while most new entrepreneurs are still White, the share of the African Americans (from 1996 to 2016) increased from 8.43% to 9.24% and is continuously growing.
In addition, it has been found by the Global Entrepreneurship Monitor – as reported by Fortune – that “black business owners are creating businesses at a higher rate than their white counterparts and other minorities.”
Over the past decades, black entrepreneurs and consumers are underestimated. However, not for too long – as research shows a significant change in the trend. But what could these changes suggest? Specifically, how are these seen to help power up the world economy?
African American businesses are more likely to be “necessity-based”.
Donna Kelley, a professor of entrepreneurship at Babson College, said that black entrepreneurs are more likely starting a business out of need. This is primarily because most of them may have attained lower educational levels, open businesses with less long-term potential, have less access to financial resources to continue operating, or are in an environment that does not promote business survival.
These factors might be a bit of a concerning fact. However, if viewed positively; the increasing number of black entrepreneurs venturing into business can do good to people in positions of influence to promote widespread economic growth through lending support and assistance (i.e., skills development, providing awareness, and improving access to capital), which, when done successfully has a huge potential to transform these entrepreneurs into opportunity entrepreneurs and ultimately drive growth to the economy.
It might take a lot of hard work but unless acquisition markets and venture capitalists facilitate access to capital, it is very hard to support a business and even start one.
A large number of African Americans consumers have an unprecedented impact on the economy.
Nielsen, a leading global and information and measurement company, reported on the “untold story” of black consumers that the black population is continuously growing – and so, their buying power and of course, economic influence as well.
The report suggested that it is “the key time for companies to ‘build and sustain deeper, more meaningful connections’ with black consumers” and entrepreneurs as 2015 became a “tipping point” for the black Americans’ “unprecedented impact across a number of areas (i.e., television, social media, and television).
The rise of minority-owned business rates in America, particularly the thriving black entrepreneurship, produce over 400 billion dollars in annual revenue and 49 billion dollars in local, state and federal tax revenues – as reported by the National Minority Supplier Development Council (NMSDC) and the Institute for Thought Diversity (ITD).
This booming entrepreneurism can therefore help the US economy to get more ahead of the game, most especially against Japan and China – which aside from competing with each other over a number of issues (such as Nanjing massacre, territorial dispute, and not to mention it’s recent scramble over Africa), are in rivalry with America for the being economically powerful.
Meanwhile, the entrepreneurial spirit among African Americans has been robust than ever. That while might be necessity-based, are also inspired by role models (i.e. Oprah Winfrey). But whatever their motivations are, more importantly, black entrepreneurship are continually growing – a stepping stone to diversify nationally and ultimately, globally.
Staff Writer; Greg Moore