$1.4 trillion is quite a lot of money.
And we are not referring to the U.S. National debt. As stated by the Miami Herald, $1.4 trillion is the boost Hispanic entrepreneurship could give to the U.S. economy.
First, some background.
The recent 2015 State of Latino Entrepreneurship, published by the Stanford Latino Entrepreneurship Initiative reports that Latino-Owned Businesses (LOBs) are growing significantly faster than Non-Latino Owned Businesses (NLOBs), yet the revenue gap between the two remains substantial, essentially due to lower annual sales.
Closing that gap could potentially infuse $1.4 trillion into the American economy. The revenue disparity may be rooted in the motivation behind Hispanics engaging in entrepreneurship.
While taking advantage of external market opportunity certainly factored in for a least a third of Latino entrepreneurs, legacy – passing down business opportunities to progeny- represents a real driving force behind entrepreneurship. In fact, LOBs have a higher rate of family ownership than their NLOBs counterparts. Personal motivation, working with loved ones and safeguarding financial future tops the list as well.
Tending not to extensively leverage government lending programs and, in particular, venture capitalist investors, however, has contributed to stunting company growth.
The good news.
Acutely aware of the prospective effect these LOBs can have on the economy, the report proposes to educate business leaders, policy makers and investors on the challenges facing the LOBs and will help accelerate relationship development between the Latino Business community and financial partners.
With the Latino population expanding at a significantly swift rate, the report projects the Latino population will comprise 30% of the American population by 2060. With the help of commercial lending institutions, be prepared for an enormous economic impact, going forward.
Interestingly, this growth in LOB entrepreneurship also parallels the unprecedented impact of the Hispanic population on American politics.
According to Stephen Nuño, reporting for NBC news, “The National Association for Latino Elected Officials released information today outlining the importance of the Latino vote in critical states like Colorado and Nevada. According to NALEO Educational Fund projections, more than 13.1 million Latino voters will cast ballots in the upcoming presidential election, up from 11.2 million in 2012. This would mark a 17 percent increase in turnout and an 8.7 percent increase in the Latino share of the vote from Election 2012.”
Additionally, it should be noted, the 2016 U.S. Election boasts two presidential candidates that are Cuban-American and sons of immigrant families.
That is quite an impact on the national election of the world’s largest economy.
SDI, headquartered in Ft. Lauderdale, is one of the many enterprises flourishing in Florida, which offers a friendly minority business climate. Fiercely committed to the success of new and operational Hispanic-Owned entrepreneurs and businesses, I am honored to be a Board Member of the Women’s Business Development Council of Florida (WBDC) as well as the United States Hispanic Chamber of Commerce (USHCC) which will be hosting their national convention in October.