Minority business ownership surges in Metro area
The number of minority-owned businesses in the St. Louis region has shown substantial growth in recent years, expanding faster than any of the other 50 most populous metro areas in the country.
A reportfrom the East-West Gateway Council of Governments looked at the date from 2007 to 2012, the most recent years of available date and found:
- Black-owned businesses increased by 64 percent
- Women-owned businesses also grew by 32 percent
- Asian and Hispanic firms increased by at least 20 percent.
“We’re still trying to understand some of the underlying changes that may have brought this about, but still it seems like a good news story to me,” said director of research John Posey.
“We have more minority — as well as women — entrepreneurs that are out there in firms that are actually employing people,” he said.
Meanwhile, white-owned businesses fell by 5 percent, but they still make up the majority of all companies in the area, holding more than 80 percent of total businesses. Ownership is defined as someone having 51 percent or more of equity, stock or interest in a business.
Posy said he found it most surprising that by 2012 the St. Louis region ranked No. 1 for the number of African American-owned businesses as a portion of the area’s total black population.
“Take the number of African American-owned businesses, divide by the African American population and by that measure we’re number one,” he explained.
Still, African Americans are under-represented as business owners compared to the size of their population; in 2012, 19.5 percent of people in the St. Louis region were African American, but only 5.4 percent of firms were owned by African Americans. However, that compares favorably to where things stood in 2007 when African American-owned businesses made up 3.5 percent of all classifiable businesses in the region.
Posey emphasized that more research is needed to explain what accounts for the changes, but adds that general growth in service sector employment is likely a contributing factor.
“The single largest economic sector for minority-owned firms is a broad industry known as health care and social assistance. This includes a lot of things — everything from doctors and dentist offices to home health services and even child care,” he said.
The findings are from an update of East-West Gateway’s seventh and most recent Where We Stand report released last summer that assesses the health and competitiveness of the St. Louis region by comparing it to the 50 most populous metropolitan areas in the US.
Follow Joseph Leahy on Twitter @joemikeleahy