New Book Examines Race and Entrepreneurial Success

An entrepreneur's education, financial resources and prior work experience are key factors in their success, according to a new book, which examines race and small businesses in the United States.

"Race and Entrepreneurial Success: Black-, Asian-, and White-Owned Businesses in the United States" analyzes Census Bureau data to determine why Asian American-owned business do well in comparison to white-owned business and why African American-owned firms do poorly when compared to both.

African American-owned firms tend to sell less, have fewer employees, earn smaller profits and go out of business more than their peers. But African Americans comprise only 5.7 percent of the 13 million business owners in the United States.

By drilling down into the Census data, the authors found that fundamental issues of education and financing greatly impact an entrepreneur's chance for success. Fifty percent of African Americans have less than $6,200 in personal wealth, which is one-eleventh of that held by whites and Asian-Americans. Less than 20 percent of African Americans go to college compared to 30 percent of whites and 50 percent of Asian Americans.

African Americans also suffer in their start-up success because of a lack of an entrepreneurial legacy. Very few gain experience from working in a family-owned business, which the authors say is largely due to the high rates of growing up in single-parent families. Currently, 55 percent of African American children live with only one of their parents.

"This book will demystify some of the reasons for the disparity in the success rates of some minority businesses," said Daryl Williams, director of Minority Entrepreneurship at the Ewing Marion Kauffman Foundation and national director of the Urban Entrepreneur Partnership. "The ability of minority entrepreneurs to fully participate in the economy is critical. Any work that moves us in that direction is of the utmost importance."

The new book by Robert Fairlie and Alicia Robb was published by MIT Press and partly funded by the Kauffman Foundation.

By Sharon McLoone |  August 19, 2008; 10:08 AM ET Data Points
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Please email us to report offensive comments.

I am a small business owner; when we cold call on the phone; folks do not know who owns the company nor the color of our skin or gender. When our folks sell the deal; the color of the owners skin nor the gender are discussed.

Starting a business is hard I have found over the last 3 years; I do not blame anyone if I fail; for my successes, I attribute it to hard work and luck.

We never ask for handouts; we appreciate help, but expect nothing. Hard work still works, folks should try it.

Posted by: small business owner | August 20, 2008 8:03 AM

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