Using microdata from the 2001-2009 American Community Surveys, the 2000 U.S. decennial census, and the 2001-2011 Current Population Surveys, this paper analyzes the earnings and employment patterns of Hispanic entrepreneurs in the first decade of the 2000s. In light of this population’s heterogeneity, our analyses also consider gender- and immigrant-related outcomes. The findings indicate a rising presence of Hispanics in the entrepreneurial sector during the 2000s, especially for immigrants. This increase resulted from the overall growth in the Hispanic population in the U.S. as well as from rising self-employment rates within the Hispanic workforce. Analyses of earnings further indicate that the most recent recession offset some (but not all) of the progress Hispanic women had made with respect to reducing their self-employment “penalties” in the decade, but this was not the case for Hispanic men. Moreover, the recession led to higher rates of microentrepreneurship (defined as having fewer than ten employees) among the self-employed, particularly for foreign-born Hispanic women. These findings indicate Hispanic entrepreneurial growth appeared to have a positive impact on job creation in the 2000s, but mostly at the scale of smaller firms, especially near the end of the decade. The paper concludes with a set of policy implications.
Archives: Resources
Survey of High-Performing Small Businesses
The Gazelle Index is a new national quarterly survey of the current conditions, optimism and future hiring plans of high-performing minority, women and nonminority small firms. Over time, we believe the results will indicate that the views and expectations of small business owners are leading indicators of economic activity. The CEOs of small firms, unlike those of large corporations, are more closely connected to their sales force and as such, are more attuned to turning points in the economy. The Gazelle Index emphasizes businesses owned by minorities and women because they represent 50% of the nation’s 27 million small businesses. In fact, the Census Bureau’s latest Survey of Business Owners found that, between 2002 and 2007, the growth of minority- and women-owned businesses exceeded that of nonminority-owned firms in number, earnings, and employment. Despite their high representation, there is no official market sensitive indicator of the performance of minority and women-owned businesses — and remarkably few indicators of small business activity in general.
Local Roles in Small Business Culture
Local officials widely recognize that economic competitiveness is contingent upon a strong and growing entrepreneurial and small business community. This is particularly relevant given the national dialogue promoting entrepreneurs and small businesses as key drivers of economic recovery. In order for these businesses to thrive, however, they need a place, or local culture, that does not create barriers and is supportive of their development. While local governments do not necessarily create new businesses, their programs and policies heavily influence this local culture. Building on previous survey research and in-depth fieldwork, we develop a framework to begin to understand and define the underlying characteristics of local efforts supportive of a small business and entrepreneurial culture. We offer case studies of four promising programs in Wichita, Kan., New York, N.Y., Seattle, Wash. and Boston, Mass. to illustrate these characteristics in practice.
Policies to Increase Financial Security
24 low-cost, politically viable state policy ideas from the Corporation for Enterprise Development to increase financial security and opportunity in tough fiscal times.
Determinants of Rural Self-Employment
The sustained surge in rural self-employment since 2000 has largely gone unnoticed by policymakers and rural economic developers. Here we document this increase and identify variables associated with expanding self-employment using county-level data. Our regression analysis draws largely on two previous studies, which we update and refine by using more nuanced measures of rural. Results provide mixed evidence about the importance of capital access to self-employment growth but reveal that different policies are needed in rural counties depending on their proximity to metro areas and overall population size if the goal is to increase future rural self-employment rates.
Building Infrastructure for Entrepreneurship
This study examines the creation and configuration of infrastructure for entrepreneurship. Using the case of nanotechnology’s emergence, I show how the three elements of infrastructure, public resource endowments, institutional arrangements, and proprietary functions, are generated by a common set of actors, simultaneously, leading to boundary obfuscation and competition. Entrepreneurs did not wait until a critical mass of infrastructure accumulated but started firms despite the lack of infrastructure. The earliest entrepreneurs endured a trifecta of burdens: their liability of newness, nascent market uncertainty, and ambiguity in the emergence of the technology itself. In exchange, early entrepreneurs were part of the infrastructure creation and configuration process. Additionally, I find that infrastructure is not measured by the number of resources within an element or the efficacy. Infrastructure configures because of interactions between elements, in the space between the actors and elements where boundaries blur.
Implications of Access to Capital by Young Firms
In the aftermath of the latest financial crisis, policy-makers at all levels are concerned about the impact of the crisis on access to financial resources by young firms, particularly as major changes occur in bank-lending practices and uncertainties surround the implementation of financial reform legislation. In this paper, we analyze the types and sources of financing used in young firms over the years 2007 through 2009. We find differential outcomes for firms who applied for loans and received them, those who applied and were denied, and those which did not apply for fear of denial. We explore the factors that mitigate the decision to apply for a loan and the subsequent outcomes of firm survival and growth. Our work provides insights into the relative importance of supply and demand for financing both prior to and subsequent to the financial shocks. We leverage various measures and perceptions to disentangle the decision to seek bank loans from the likelihood of receiving a loan based on credit scores and other objective measures. We find that both tangible and intangible assets, particularly intellectual property, play a significant role in receipt of bank loans in the firms’ early years of operation.
Women in Green
On behalf of the National Women’s Business Council (NWBC), Hart Research
conducted two focus groups on August 31, 2011, among 13 self-described
“established” or “aspiring” female entrepreneurs attending the “Women in
Green” Forum in Santa Monica, California. It should be noted that the
findings presented here reflect the fact that nearly all of the participants are
in the early stages of establishing new business ventures. It also is important
to remember that our participants made a conscious choice to attend (and
pay for) the Forum, a fact that may differentiate them significantly from
other entrepreneurs in the green sector (or other sectors).
Overcoming the Gender Gap
Despite recent gains, women still lag behind men on key measures of start-up activity, and their firms tend not to grow or prosper as much. The Kauffman Foundation reports on how we can better tap into this under-utilized economic resource.
Women-Owned Businesses 1997-2007
The most recent in Advocacy’s periodic series of reports on businesses owned by women and men.