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In this episode of Work in Progress, Marlene Orozco, associate director of the Stanford Latino Entrepreneurship Initiative (SLEI), discusses the think tank’s just-released report, The State of Latino Entrepreneurship: 2022.
Latinos now make up 19% of the total U.S. population, having grown 23% over the past decade to more than 62 million people, according to the 2020 U.S. Census. Latinos also continue to play an important role in the country’s economy, making up 14% of the workforce, and increasingly as job creators themselves.
The report from SLEI shows that over the past decade both Latino-owned non-employer businesses and employer businesses are growing at a faster rate in the U.S. than those started by non-Latinos, this despite the fact that Latino entrepreneurs have a harder time getting financing.
“We’re seeing these trends across the board for all sizes and types of Latino-owned businesses. The number of all Latino-owned businesses has grown 44% compared to just 4% for non-Latinos. The number of Latino-owned employer businesses has grown 35%, compared to just 5% for all others. This is important because employer businesses are job creators,” Orozco explains.
An employer business is a business that has at least one paid employee other than the business owner. “Employer businesses in the U.S. make up over 80% of all small business sales. They’re a significant portion of the small business ecosystem,” she adds.
The SLEI report shows that the types of businesses being created cover all industries. “Contrary to stereotypes about the industries in which Latino-owned businesses operate, we find that among employer businesses, Latinos are equally likely as their white counterparts to own tech companies,” according to the report.
Orozco goes into further details in the podcast. “We find that 19% of new Latino-owned employer businesses are developing a technology or software product. This is compared to 14% among white-owned employer businesses that were surveyed.”
She goes on to say that not only are Latinos growing businesses faster, they’re also hiring employees at a dramatically faster rate than all others. “Since 2007, the number of employee growth has been 55% for Latino-owned businesses compared to just 8% for white-owned businesses. Latinos are very real job creators and contributors to the U.S. economy.”
Orozco and I talk about the difficulty many Latino entrepreneurs have in getting capital to start their businesses – “In this year’s report, we uncover the fact that Latino business owners are more often asked to provide collateral for their business, even when they look comparable on paper in terms of their business performance.” Tune into the podcast for that part of the discussion and much more.
Stanford Latino Entrepreneurship Initiative (SLAI) is a research and education collaboration between the Stanford Graduate School of Business and the Latino Business Action Network (LBAN).
Episode 217: Marlene Orozco, 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
Music: Composed by Lee Rosevere and licensed under CC by 4.0.
Download the transcript for this podcast here.
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