Latina Entrepreneurs Growing and Powerful
12 Mar, 2012
They represent one of the fastest growing sectors in Hispanic business today
There is no doubt that small business and entrepreneurship has the potential to turn the US economy around, and both private equity and the Federal Government have initiated programs that support the growth of the next “Gazelle” or fast growing start-up with the potential of becoming the next Google or Apple. But in between the established “Giants” and the “Gazelles”, lies a whole territory of smaller companies that also help to fuel the economy – smaller companies from yoga studios, cleaning services to cupcake shops.
So how are women entrepreneurs doing? The answer is – not so great but…
According to the Kaufman Foundation study Overcoming the Gender GAP: Women Entrepreneurs as Economic Drivers, women are not fairing that well in the entrepreneurial sector, in fact there is a wide gap. The study shows that although nearly half of the workforce and more than half of our college students are women, their lag in building high-growth firms has become a major economic deficit.
The American Express OPEN Forum report for 2011 found that just 1.8 % of women-owned firms had revenues of more than $1 million, while men-owned firms, 6.3 %.
How are Latina entrepreneur fairing?
While scanning the “Top” lists of several business publications I was struck by the lack of Latinas, in fact, on Inc’s 2011, Top 10 Latino and Hispanic Entrepreneurs – not one Latina, and I wondered why aren’t there more of us?
This doesn’t mean that Latinas are not launching new businesses, but it would seem that we are somewhat “invisible” entrepreneurs… and terribly underrepresented in the media and in scholarly research. What’s very interesting is that, Federal Reserve data shows that there is a huge surge (almost 60%) in the Hispanic entrepreneurial sector, and even though entrepreneurial ventures by Hispanic women are lagging slightly behind Hispanic men, they are ahead of non-Hispanic women. It is clear from these statistics that Hispanic business is on the rise.
One of the reasons that we may be “invisible” is that Latina entrepreneurs are concentrated in the Micro-entrepreneur sector and most of those businesses have lower earnings. Although the bulk of Latina entrepreneurs are concentrated in this sector, according to the study “Latina Entrepreneurship” by Magnus Lofstrom and Timothy Bates, “Latinas possessing the same levels of traits regarding education, immigrant status, and the like actually earn more than their white-women counterparts pursuing entrepreneurship”. Yet, this surge of Hispanic business seems to have gone unnoticed, and must be addressed, if this movement is happening without any significant support – can you imagine the economic effects if Latina entrepreneurship where nurtured and supported by government and private equity? What financial outcomes and success rates would we experience if we started to see some Latina oriented entrepreneurial programs? And what could it mean to private wealth creation in this growing demographic?