America: White Males Are Now The Minority In Business Ownership

By Jordan French Jordan French has been verified by Muck Rack's editorial team
Published on June 14, 2021

Are you discouraged by the anemic ‘risk capital’ flows towards women and minority groups? Well, consider this broader milestone: White men are no longer the majority of business owners in the U.S. But granted that most small businesses, which include agencies and mom-and-pop shops, aren’t tech firms (albeit some productize to become one)—modernizing businesses may still offer hope. 

But what events could have caused this shift? What does it mean for the future of American entrepreneurship? Will white males dominate the business sector again?

The Shift in White Male Business Ownership

According to Forbes, as based on The New Builders book by Levine and MacBride, of the 30.5 million total number of business owners, 12.5 million or 41% are white men, a number that’s been declining since 2015. 

The authors gathered these data with the help of Stanford University researchers, where two sets of data from the U.S. Census Bureau’s 2017 survey were utilized, which includes both employer and non-employer businesses.

This yielded results similar to the Annual Business Survey on minority-, veteran-, and women-owned businesses, although from a different perspective.

Levine and MacBride highlight the stories of next-gen entrepreneurs, and the subsequent decline of American entrepreneurship, which appears to have been made worse by the pandemic. Moreover, although the U.S. government allocates funds for small businesses and startups, their policies never adapted to the changing demographics of business owners.

But is that all? 

The Next-Generation Entrepreneurs: Women Take the Lead

The number of women-owned businesses in the U.S., believe it or not, is getting closer to that of white males. Of the 30.5 million total number of business owners, 11.5 million businesses are owned by women, 65% of which are white women.

Looking at the data from ABS on similar surveys, this number has been growing since 2015. Their data also shows that over half of these businesses are small-medium enterprises (SMEs), consisting primarily of one to four employees. Each state in the U.S. has a fair share of women-owned businesses, but California, in particular, houses the highest number of these businesses. 

Furthermore, among the many sectors in the industry, the healthcare and technology sectors are where most of the women-owned businesses can be found, followed by the retail sector. For example, tech services like video conferencing and sending faxes without a fax machine are now needed more in the business world. Selling products and services through online shops is also becoming common. Online selling is known more as a woman’s business, and because they can be easily started, they also multiply fast.

So, perhaps the primary driver is the modern technology we have today. It’s now easier to start a business even without employees. Non-employer small businesses, which women dominate, can be started from home using online software programs, with automation tools minimizing the need to hire employees. The number of organizations that advocate women empowerment is also growing, which creates more opportunities for women to start their own businesses.

On the other hand, although white males tend to be more favored when it comes to venture funds, they prefer larger-scale businesses, which are more difficult and take longer to build.

More People Of Color

Of the 30.5 million total number of business owners, 6.5 million are owned by men of color. This includes Hispanics, Asians, African-Americans, Indians, and Pacific Islanders, the previous minorities that are slowly climbing up in the statistics. As of 2019, there are approximately 5.5 million firms in the U.S. Among these businesses, 18.3% or 1 million are minority-owned businesses. Combined with women-owned businesses, they’ve displaced white male business owners as the previous majority. 

Asians and Hispanics make up most of this number. Asians, in particular, make up over 50% of the total number of minority-owned businesses in the US and boasts the highest revenue from the minority group. 

This number consists mainly of restaurants, bars, hotels, and other hospitality-centered establishments. Since many rural areas in the U.S. rely heavily on the hospitality sector, the growth of these minority-owned businesses will significantly impact the country’s development, which may also play a huge role in providing minorities and women greater business funding or venture capital. 

What The Future Looks Like

Up until 2014, young white men were the dominant image when it comes to entrepreneurship in America. But as their prominence dwindles in the business sector, women and more minorities continue to establish their own businesses, and at a much faster rate. Although large businesses are still dominated by white men, in terms of numbers, there are definitely more small businesses, which are mostly run by women.

These businesses owned by women, especially women of color, are growing at least 4 times the rate of the overall population. If this keeps on, women are expected to exceed the 50% mark in just a few years, probably even sooner.

By Jordan French Jordan French has been verified by Muck Rack's editorial team

Journalist verified by Muck Rack verified

Jordan French is the Founder and Executive Editor of Grit Daily. The champion of live journalism, Grit Daily's team hails from ABC, CBS, CNN, Entrepreneur, Fast Company, Forbes, Fox, PopSugar, SF Chronicle, VentureBeat, Verge, Vice, and Vox. An award-winning journalist, he is on the editorial staff at TheStreet.com and a Fast 50 and Inc. 500-ranked entrepreneur with one sale. Formerly an engineer and intellectual-property attorney, his third company, BeeHex, rose to fame for its "3D printed pizza for astronauts" and is now a military contractor. A prolific investor, he's invested in 40+ early stage startups through 2021.

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