Here at The Glow Up, we’ve been told about Black women entrepreneurial prowess for a while now– this is one of the reasons why this vertical exists. That said, the rest of the world is still catching up with the fact that black women, widely reported be the most educated demographic in the United States, are also among the most enterprising, overtaking both their male and female counterparts in setting up new businesses. In other words, according to a new study carried out by professors from Babson College in partnership with the Global Entrepreneurship Monitor, published Tuesday in the harvard business review.
Of Fortune Magazine:
In the United States, 17% of black women are starting or running a new business, compared to 10% of white women and 15% of white men, the study found, which was based on data from a survey of 12,000 people. .
At the same time, only 3% of black women surveyed ran a “mature” business over three and a half years old.
The ingenuity is clearly there, so why the disparity? This requires further study, says Angela Randolph, assistant professor of entrepreneurship at Babson College, co-author of the study. That said, an obvious reason is that 61% of black female entrepreneurs provide their own start-up capital, largely without the benefit of generational wealth, with existing educational debt, and with a lower approval rate for small business loans. companies. It should also be noted that black women are still generally paid only 62 cents for every dollar made by their white male counterparts. These collective disparities have been painfully demonstrated and exacerbated by the economic fallout from the pandemic, in which Black and Latin women also suffered the largest job losses; a dynamic Randolph says he predates pandemic.
“If 61% of black women start with their own funding, and black women in particular start with more debt and less equity, they start with less,” she told Fortune.
Randolph’s co-author in the study, Babson Entrepreneurship Professor Donna Kelley, also pointed out that the industry sectors that black women most often gravitate towards retailing, healthcare and education “tend to have lower yields and low barriers to entry, which means more competition. Additionally, and perhaps due to the unemployment rate that hits black women, they are more inclined to attempt entrepreneurship earlier in their professional careers, standing out on their own between 25 and 34 as opposed to 35-44. more seasoned of their white. counterparts.
“If you are faced with prejudices about employment and getting a job, or possibly promotions, and the job prospects are not as attractive, create and have more power over your career through l ‘entrepreneurship might be a better option,’ Kelley said.
So, is there a solution in sight? In addition to recommending further study, Randolph said the findings indicate the need to “reexamine how entrepreneurs can access resources,” Fortune reports.
“Many programs focus on starting entrepreneurship,” she said. “There isn’t enough focus on how we are helping them to hold onto and grow.”