My guest on this week’s Work in Progress podcast is Bárbara Gómez, Ph.D., the associate director of the Stanford Latino Entrepreneurship Initiative (SLEI). Dr. Gómez joins me to discuss the eighth annual State of Latino Entrepreneurship (SOLE) report released this morning.
Gómez is one of the principal investigators of the new SLEI report which shows that Latino-owned businesses (LOBs) continue to outpace the growth rates of white-owned businesses (WOBs) – and U.S. businesses in general – in terms of number of businesses and revenue.
“We continue to see this pattern. There is a continuous growth that Latino businesses have had in the past decades. We know that Latino business owners continue to strengthen the American economy, not only by increasing the total number of businesses that they start, but also by creating businesses that employ Americans,” she explains.
Gómez continues, “One of the biggest findings was that the number of Latino-owned businesses in America increased by 34% between 2007 and 2019, whereas the number of white-owned businesses in the same period of time decreased by 7 percentage points.”
There are now nearly 5 million Latino-owned businesses across the country, generating more than $800 billion in revenue.
It’s interesting to note that during the three years of the pandemic (2019-2022), “the median growth rate in revenue for LOBs was 25% and 9% for WOBs, and the median three-year compound annual growth rate for LOBs was 7% and 3% for WOBs,” according to the SLEI research.
Gómez says that while Latino entrepreneurs continue to grow, even thrive during unprecedented times such as COVID, they continue to face “systemic disparities that impact not only the growth of their businesses, but also the American economy. Among those challenges include unequal access to financing, as well as access to government and corporate contracts.”
Here is what the SLEI research finds.
Latino-owned businesses seeking loans from national banks have stronger business metrics than white-owned businesses, yet have lower approval rates for loans over $50,000. Also, LOBs receive substantially smaller contracts that take longer to secure from corporations and governments than WOBs, as much as 12 months.
“A year of loss, a year of uncertainty, a year of waiting that can impact not only the contract that you get, but your entire businesses as well,” she explains.
Dr. Gómez and I discuss more of the findings and some of the “whys” behind them. You can listen to the full podcast here or download it wherever you get your podcasts.
Episode 261: Bárbara Gómez, Ph.D., associate director, Stanford Latino Entrepreneurship Initiative
Host & Executive Producer: Ramona Schindelheim, Editor-in-Chief, WorkingNation
Producer: Larry Buhl
Executive Producers: Joan Lynch and Melissa Panzer
Theme Music: Composed by Lee Rosevere and licensed under CC by 4.0
Download the transcript for this podcast here.
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