The racial gap between white-owned businesses and those owned by minorities is more costly than we may have realized, writes Lydia Dishman.
Discrimination, both past and present, is inhibiting the true growth of these businesses. Without that, an additional 1.1 million businesses could be established and could produce an estimated 9 million more jobs. This would increase the nation’s income by the aforementioned $300 billion.
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Because wealth is an important driver of business success, it is necessary to encourage wealth building in communities of color, the researchers note. Measures such as tax credits to promote venture investing in minority business would help, as would credits for low-income entrepreneurs, and the use of alternative credit data. Other initiatives from providing disadvantaged minority groups with quality pre-K education, all the way through executive mentorship through SCORE and similar organizations, could change the ratio of successful businesses owned by people of color and have lasting impact on the U.S. economy.
