For decades, entrepreneurship has been disproportionately concentrated in populations of white men. According to the most recent Census data, released in September 2016, at the end of 2014 there were 5.4 million businesses, and only 17.5% of them qualified as minority-owned—even though African-American, Latino, Asian, and other minority populations represent more than 38% of our country. Women-owned businesses accounted for 19.4% of all businesses—even though women make up just over half of the country.
These figures are clearly imbalance, but there’s evidence that they’re improving—and will likely improve further as millennials start to become more involved in entrepreneurship.
Entrepreneurship grew in 2016, according to the much-anticipated annual report by the Kauffman Foundation. Over the past two years, the rate of entrepreneurship has increased nearly 15%, which translates to more than 550,000 new businesses for each month during that timeframe. But what’s really interesting is how many of those new businesses are being started by women and minority groups.
According to the report, 40.6% of new businesses are started by women—a huge improvement over the 19.4% average rate of women business owners. Latino-owned businesses are also on the rise, with Latino business owners accounting for 20.8% of all new entrepreneurs—more than double the rate back in 1996.
The rates of millennial entrepreneurship aren’t particularly high—in fact, entrepreneurship in age groups 20 to 34 and 35 to 44 has increased since 2015, but is still lower than the rate back in 1996—but still, it’s the millennial generation that’s starting to push for this level of diversity.
Millennials and Diversity
So why is the millennial generation, if their rates of entrepreneurship are lower than generations past, influencing such a major boom in women- and minority-owned startups?