Next week I’m scheduled to interview Robert Fairlie, a UC Santa Cruz economics professor and co-author with Alicia Robb of a new book called Race and Entrepreneurial Success. Fairlie’s book, based on extensive research and access to Census data that’s not available to the general public, has some jolting news:
Just 5.1 percent of black workers owned businesses in 2006, compared to 11.1 percent of white workers, 7.5 percent of Latino workers and 11.8 percent of Asian workers
The average sales of white-owned firms in 2002 was about $440,000, nearly six times the $74,000 average for black-owned firms
The median net-worth for black households is $6,166, compared to $67,000 for white households. The difference is important because startup capital is the biggest factor accounting for racial disparities in business success.
About 80 percent of Asian-owned businesses in the U.S. are owned by Asian immigrants. They have success rates similar to Asian business owners born in the U.S.
Fairlie and Robb focus on data, not policy prescriptions. But the implications of their data are important. For example:
…[A]n increase in both the number of minority-owned firms and the average number of employees per firm by only 10 percent could result in nearly 1 million new jobs for minorities. An increase of 1 million new jobs would be significant given there are roughly 3 million minorities currently unemployed in the United States.”
To address the racial disparities in entrepreneurship, we have to understand the reasons behind them. Fairlie’s one of the top experts in this field, and we’ll publish a Q&A with him after the interview. I have some questions in mind already. But what do you want to ask him?