Who is driving Black business growth? Insights from the latest data on Black-owned businesses

Using the Census Bureau’s Annual Business Survey (ABS) data on employer firms (those that have at least one employee), this third installment of Brookings Metro’s series of reports on Black-owned businesses focuses on the overall state of those firms across U.S. metropolitan areas. These reports are in support of the Path to 15, 55 initiative, which endeavors to transition 15% of Black-owned sole proprietorships into employer firms, adding $55 billion to the U.S. economy. The ABS data, collected in 2020, allows for an in-depth analysis of employer firms during the initial stages of the pandemic. In addition, this report places a spotlight on employer firms owned by Black women. We find that:In 2020, Black people represented 14.2% of all Americans but only 2.4% of all employer-firm owners. Latino or Hispanic people represented 18.7% of the population and 6.5% of employer-firm owners, while Asian Americans represented 6% of the population and 10.6% of employer-firm owners.[1] From 2019 to 2020, Black-owned businesses grew by 6,351 firms, or 4.72%—behind Latino or Hispanic (8.19%) and Asian American (5.33%) firms, but above white-owned businesses, which shrunk by 0.9%.Black business growth was trending upward before the COVID-19 pandemic. From 2017 to 2020, the number of Black-owned businesses across the country increased by 13.64%—larger than all businesses in general, which increased by 0.53% over the same period. Black-owned firms brought in an estimated $141.1 billion in gross revenue in 2020—an 11% increase since 2017.