Black entrepreneurship rates are climbing in the United States, and it’s because innovators like Mandy Bowman ’12 are doing their part.
Bowman established Official Black Wall Street in 2014, which makes it easier for customers to find and support Black-owned businesses. Recently, due in part to the Black Lives Matter movement, the business experienced rapid growth, and as a result, Bowman has hired seven additional employees, all of whom are women.
Bowman built this go-getter attitude at Babson, which co-founded the Global Entrepreneurship Monitor with the London School of Business more than 20 years ago.
In its most recent round of research with data collected from 2014 to 2018, Babson Professor Donna Kelley and Associate Professor Mahdi Majbouri discovered almost 20% of the U.S. Black population were in the process of starting or running a business.
Black entrepreneurs start younger, new data shows. Read the Boston Business Journal article.
This data set also determined 12.9% of the U.S. Hispanic/Latino population and 12.2% of the white population were entrepreneurs during the same time period.
“Entrepreneurship may represent a better career path than other opportunities,” Kelley said. “Starting a business allows you independence and control in your work, and the potential to earn a higher income and pursue opportunities you’re passionate about. Babson graduates are driven to innovate, problem solve, and recognize problems facing our world and take an active role enacting positive social and economic changes.”
A Diverse Approach to Business
In 2018, 26.4% of Blacks were identified as entrepreneurs, a figure which has risen steadily since 2015. During this five-year period, 12.8% of Black entrepreneurs started their businesses out of necessity because there were seldom employment options available.
There are more than 31 million entrepreneurs in the United States, and among Black entrepreneurs from 2014–2018, 50% were women, compared to 40% of white and 39% of Hispanic/Latino entrepreneurs.
Greater visibility for these entrepreneurs, i.e. via media or through personal contact, can inspire others to pursue starting a business, says Kelley. This could be critical at a time when Black-owned businesses face hardships.
“Entrepreneurialism enabled me to overcome discriminatory barriers to full enjoyment of the American dream that many Black people still experience today.”
Jane Edmonds, vice president for programming and community outreach
More than 40% of Black business owners reported they weren’t working in April due to the effects of the pandemic, compared to just 17% of white business owners. Black business owners also are more likely to be hindered in receiving financial aid as a result of the coronavirus than white business owners are.
But, with the rise of the Black Lives Matter movement, Official Black Wall Street has experienced exponential growth. Ninety-three thousand of the company’s 376,000 total app downloads have come since May.
“The increased response has been amazing,” Bowman said. “We have more followers. We have more users. We have more support.”
Reflecting on her own path, Bowman advised fellow Black women entrepreneurs to savor the process of scaling a business.
“At first, starting your own business seems overwhelming,” Bowman said. “Take small steps. Write a list. Know your value. Don’t be afraid.”
Closing the Gap
From 2014 to 2018, half of white entrepreneurs were in the upper third of the U.S. household income. Just one-third of Black and Hispanic/Latino entrepreneurs were in this income group. The most prevalent income level among Black entrepreneurs, accounting for 37%, was in the bottom-third household income category. This reflects the income level in the United States population. According to the U.S. Census in 2018, the average household income for Blacks was $41,911, while it was $51,404 for Hispanics and $65,777 for Whites.
“We have to work to change that over time,” says Kelley. “In the meantime, we need to help these groups overcome these restraints. We hope that entrepreneurship provides that possibility for earning a higher income and lifting families out of poverty.”
Jane Edmonds, vice president for programming and community outreach, founded her diversity leadership training and consultancy firm at the height of racial tensions surrounding segregation and busing in Boston in 1981.
She recently founded a second consultancy, Jane’s Way, at a time when injustice remains an obstacle in society.
“Entrepreneurialism enabled me to overcome discriminatory barriers to full enjoyment of the American dream that many Black people still experience today,” she said. “I still feel the same way: empowered to create value to meet the challenges of racial and other difference in our urgent world context.”
Launched 21 years ago by Babson College and the London School of Business, GEM continues to develop and disseminate entrepreneurship research with a goal of transforming the global economy and discouraging ingrained economic disparities. “Through GEM, we obtain a broader picture of what entrepreneurship looks like … and influence national and global approaches to fostering entrepreneurial ecosystems,” said Kelley.