- Multicultural Business Owners The Overlooked Market?
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NY Times (front page): Moving to the U.S., prospering, immigrant entrepreneurs attain considerable affluence
Bloomberg: Immigrants key and majority of small businesses in NYC
Forbes: Latino-Owned Businesses leading the recover – revenue jump an astonishing 55%
These, and other recent news stories, show how key immigrant business owners are to the U.S. recovery. Entrepreneurship is important; it spurs innovation, employment and economic growth. It is estimated that immigrants/multiculturals, create businesses at 2-3 times the average rate. Some start as SOHOs (small office, home office) which grow into larger businesses, categorized by SIC codes, with many employees and sizable sales volumes. Small or large these business owners have money, can be active, generous donors, heart-beats of communities; they maybe “cash transactors” and are often overlooked.
A study by Duke University, University of California, Berkeley, and Harvard University found that immigrants founded almost 52% of Silicon Valley startups launched from 1995 to 2005. A quarter of the patents filed during the same period came from immigrants.
It is worth noting that over 50%, of Gen Y (age 18-34) – many of whom are multicultural – plan to start a business.
Some of these hardy business owners’ characteristics are:
- Optimism, “Nothing to lose” attitude, willingness to take risks, resilient; serial entrepreneurs, even starting several businesses simultaneously
- Desire to collaborate, “we are all in this together”; families working together
- Sense of adventure; let’s try something new; they have guts
- Respect and love for family and community; consistent, loyal donors to charity when “they have made it”
- Reverence for education; self-taught and techno-savvy
- Cash transactors – underserved by the traditional financials
Add the predisposition for hard work and you have a formula for success. Being successful, they may also have a taste for luxury homes, goods, services, travel, clothing, jewlery and cars.
The major U.S. growth in the past has come from immigration; now multicultural birth rates are driving growth. Unless you are Native American, your family came from “away”. Immigrants form a vibrant part of the U.S. culture. Can you imagine the New York City police without the Irish? Hope, risk taking, hard work and optimism are baked into the immigrant DNA. Some more detail on these groups:
Hispanic-owned firms: As Hispanics form an increasing percentage of the U.S. population; young growing Hispanic families are the majorities in some areas. More than 90 % of Hispanic firms are concentrated in 20 states. 70 % are concentrated in 4 states.
The number of Hispanic-owned businesses is expected to grow 41.8 % in the next six years to 4.3 million, with total revenues surging 39 % to more than $539 billion, according to estimates by HispanTelligence.
African Americans are also growing in business population. In some areas, African Americans outnumber Hispanics. Inspirational public figures provide powerful examples of those African Americans who succeeded by seeing a need and filling it. African Americans outnumber other groups in SOHO (small office, home office) businesses, sometimes related to elder and childcare.
Asian-Indian businesses are a major engine of growth in computers, the hospitality industry, and the medical/physician sector, according to the Survey of Business Owners, (2007 US Census Bureau). They are responsible for an estimated $152 billion in revenue in the U.S. Asian Indian businesses are located in the commercial heart of America.
Koreans often had few choices. Their arrival in larger numbers in the Eastern U.S. (post 1965 – when the Immigration Act of 1965 removed quotas based on national origin) coincided with a sharp decline in U.S. manufacturing jobs and service jobs were already filled. However at the same time of the major Korean immigration, many European immigrant small business owners were retiring and selling their stores. Koreans brought with them the help of the kye, or a rotating credit association. Other immigrant groups have similar community driven financial tools.
A Korean kye consists of a group who pool their funds on a regular basis. Taking turns, each member is entitled to the entire pot until all members have had their chance. Many join for both social and business purposes.
Many of these multicultural businesses are customer centric, with an ethnic flavor, in community locations. SIC codes, location, size of company; number of employees, gender are some of the selects that are helpful in research and marketing. Multicultural business owners are vibrant, smart, hardworking and ambitious. Their numbers are growing as their populations grow. They often are the heartbeats of communities and they respond, especially well, when marketed to with respect and “in culture”. They also love American brands, goods and services.
Part myth, part reality, the promise and dream of a better life are what unite us all. It helps us look to tomorrow, rather than wallow in the problems of today.
For more Information Contact Peg North at 203-400-1056 or Pnorth@EthnicTechnologies.comRead More
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