A new issue brief by the Small Business Administration’s Office of Advocacy looks at the demographic shifts in business ownership between 2007 and 2012. The report offers a glimpse into how much the business owner community in the United States echoes broader population and cultural changes over that time period and may point to areas of potential ways public policy can better support and spur entrepreneurship.
The SBA found, for example, that the share of racial and ethnic minority business owners rose from 11.5 percent in 2007 to 14.6 percent in 2012. This growth is being fueled by a marked increase in the number of Hispanic business owners, reflecting Hispanics’ overall fast growth in the U.S. population, the report says. However the findings suggest that minority business ownership still lags far broader U.S. population trends. Minorities constitute 37 percent of the overall U.S. population, according to a 2013 Census Bureau report.
Interestingly there was no change in the share of women business owners between 2007 and 2012, which remained at about 36 percent of all business owners, according to SBA. A 2013 report on the state of women-owned businesses by American Express OPEN points to significant growth in women’s business ownership between 1997 and 2013, growing one-and-a-half times faster than other types of firms.
Some of SBA's other findings:
Small-business owners are aging. The percentage of business owners age 50 and older rose to almost 51 percent in 2012 from 46 percent in 2007, while the share of business owners ages 35 to 49 fell from 39 percent to 33 percent. This is likely due to the large, aging baby-boomer population, as well as “the unprecedented withdrawal of prime age workers from the labor market,” the report suggests. The portion of business owners under age 35 grew very slightly, from 15.2 percent to 15.9 percent.
Veteran business owners are dwindling. The share of veteran business owners fell from 11.9 percent to 9.2 percent between 2007 and 2012, reflecting that the veteran population is predominantly older.
Fewer business owners are married. The share of business owners who were married fell from 68.6 percent in 2007 to 66.9 percent in 2012, which also seems follows the general population trend of fewer people getting married, the report notes.
Business owners are living in the city. The share of business owners in metropolitan areas rose to 79.4 percent in 2012 from 73.8 percent in 2007. “This largely reflects ongoing migration of the U.S. population from rural to urban areas,” SBA writes.
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