NCPA - National Center for Policy Analysis

African-Americans and Entrepreneurship

December 11, 2002

This has been a breakout year for black chief executives, with African-Americans successfully climbing the corporate ladder at such major firms as AOL Time Warner and Merrill Lynch. But blacks are more often found running smaller firms they started themselves. In fact, African-Americans are 50 percent more likely than whites to be entrepreneurs.

That startling statistic was uncovered by a new study on entrepreneurship co-funded by the Ewing Marion Kauffman Foundation. The study found that the urge to start a business is widespread in America, but especially in the black community.

Why are so many African-Americans going the startup route?

  • Entrepreneurship is very color-blind, much more than corporate America, say the authors of the study.
  • The African-American community originally turned to entrepreneurship out of necessity, says Antoinette Malveaux, chief executive of the Chicago-based National Black MBA Association, because thanks to segregation and Jim Crow restrictions blacks were not well served by white-owned companies.
  • More African-Americans are obtaining M.B.A.s and other graduate degrees.
  • Among men with education at the graduate level, the study found that 26 percent of blacks and 20 percent of Hispanics have tried to start their own businesses, compared to only 10 percent of whites.

Malveaux says the resurgence of black entrepreneurship is reflected in her group's membership. A decade ago, only 1 percent to 2 percent of the Black MBA Association members were involved in startups; these days it's 7 percent to 8 percent.

Source: Mark Lewis, "Minority Report," Forbes, October 2002.

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