Black-Owned Businesses Thriving Nationally, Connecticut Growth Is More Modest

WASHINGTON, D.C. — (AP) Black-owned businesses are among the fastest-growing segments of the American economy, the government said in a recent report. The number of black-owned businesses grew by 45 percent nationally from 1997 to 2002, more than four times the national rate for all businesses, according to a report by Census Bureau.

In Connecticut, however, the number has increased at a slower rate, from 7,251 to 10,309.

“I think a lot of people are trying to start their own business due to the fact that the job situation is very scarce in Connecticut,” said Scot X. Esdaile, president of the Connecticut chapter of the NAACP.

While welcoming the new entrepreneurs, Mr Esdaile said his group plans to push for more opportunities to do business with the state so that the businesses thrive.

Revenues from black-owned businesses increased across the country by 25 percent during the reporting period, to about $89 billion. However, nearly all black-owned businesses are small — 92 percent had no employees other than the owners.

By comparison, about three-fourths of all US businesses had no employees.

“We do have challenges, we are making progress,” said Ronald Langston, director of the Commerce Department’s Minority Business Development Agency. “This is the real challenge: to move these smaller businesses into the next step of growth.”

The report is the third in a series of Census Bureau reports on businesses owned by women, Hispanics, and blacks. Together, the reports show that the three groups are underrepresented in business ownership but are narrowing the gap with white males.

From 1997 to 2002:

éThe number of all US businesses grew by 10 percent, to about 23 million.

éThe number of businesses owned by women grew by 20 percent, to 6.5 million.

éThe number of businesses owned by men grew by 16 percent, to 13.2 million.

éThe remaining 3.3 million businesses reported in 2002 were either jointly owned by men and women or the owners could not be determined. The number of those businesses shrank during the period by 18 percent.

éThe number of Hispanic-owned businesses grew by 31 percent, to nearly 1.6 million.

éThe number of businesses owned by white entrepreneurs grew by 8 percent, to 19.9 million.

Black entrepreneurs owned 1.2 million companies in the 2002, or about 5 percent of all nonfarm businesses in the United States. Hispanics owned about 7 percent and women of all races and ethnicities owned 28 percent, according to the Census Bureau.

Blacks made up about 12 percent of the population in 2002.

“We’re about halfway there,” said Harry Alford, president and CEO of the National Black Chamber of Commerce. “The future is bright. We will continue to spiral up.”

Mr Alford said black entrepreneurs have been helped by improved education levels and increased incomes among black consumers and business owners.

Blacks as a group still trail whites in education and income, but they have made gains in the past half-century. In 1950, only 14 percent of black adults had high school diplomas, compared with 36 percent of whites, according to the Census Bureau. The gap narrowed by 2000, when 72 percent of black adults had at least a high school diploma, compared with 84 percent of whites.

“We’ve got the first generation of significantly educated people,” Mr Alford said. “There’s a black middle class like never before.”

The report is based on administrative records and a survey of 2.4 million businesses. The Census Bureau defines black-owned businesses as private companies in which blacks hold at least 51 percent of stock or interest. The report does not classify public companies, with publicly traded stock, because they can be owned by many stockholders of unknown races and ethnicities.

The largest sector for black-owned businesses was health care and social assistance, with 246,000 black-owned firms. The second largest was other services, such as personal services, repair and maintenance, with 210,000 firms.

In some states, however, black-owned firms are concentrated in urban areas. About 80 percent of all black-owned businesses in Illinois were in Cook County, home to Chicago. Los Angeles County was home to nearly half the black-owned firms in California.

New York State had the most black-owned firms, with 129,324. It was followed by California, Florida, Georgia, and Texas. Together, the five states are home to 44 percent of all black-owned firms in the country.

In drastic contrast, Alaska’s 876 black-owned businesses have increased to just 926 during the reporting period. While Hawaii showed significant growth statistically, the 50th state still showed the lowest overall total of black-owned businesses with 638 in 1997 increasing to 817 in 2002.