Latino-led businesses in America are expanding at more than twice the national average. Despite challenges such as limited access to capital, they contribute over $700 billion to the U.S economy each year. Latinos are also creating new businesses at nearly double the rate of non-Latinos, bolstering U.S economic growth.
These entrepreneurs are driven by innovation, often introducing new products or services not currently available on the market. The quickest expansion of Latino-led businesses is seen in Florida, California, Texas, and New York. Businesses are concentrated in the construction, accommodation and food services, and professional sectors. Understanding the economic potential within the Latino community, studies suggest that if these businesses had the same average sales as non-Latino businesses, they could add an extra $1.4 trillion to the U.S. economy.
Latest census data indicates this rise in Latino entrepreneurship has significantly contributed to the total number of new businesses owned by immigrants. These businesses played a critical role in economic recovery post-recession and have emerged in diverse industries, providing a range of services and goods. However, the community still faces barriers to success, including a lack of access to capital and resources. Future policies are needed to address these issues and ensure continued growth and success.
The immigrant demographic represented 36% of all new business launches in the past year, a significant increase from 25% in 2019. Women have also surged ahead, starting 39% of all new businesses in the past year, up from 31% in 2019.
Latino entrepreneurs propelling US economy
The tech industry saw a 50% increase in new business launches, making it the fastest-growing sector for startups.
Small businesses in rural areas saw a 28% increase in 2020, a sharp contrast to the 19% growth in 2019. Social media played a key role in successful business launches with 82% of new businesses attributing their initial success to social media engagement. Funding for startups grew by 45% in 2020, considerably contributing to the increase in new business launches.
Signs of economic recovery are shown by the increase in demand for American-made durable goods and the Federal Reserve maintaining interest rates at near-zero levels. The job market is healing with significant drops in unemployment rates. There is a boost in consumer confidence, suggesting more optimism about the future of the economy. However, challenges remain such as inflation and income inequality, despite economists being optimistic about recovery due to strong fiscal and monetary policies.
The manufacturing sector’s potential recovery is suggested by the rise in business spending on equipment and the surge in new orders. There has been a decrease in trade tensions and an increase in global economic optimism which have also contributed to this potential upswing. Despite these promising signs, fluctuations due to unpredictable factors such as political developments or future monetary policy changes may still occur. The Federal Reserve’s decisions on interest rates play a significant role in business investments, making any future increases a potential risk for the sector’s recovery, therefore, continued vigilance and adaptability are essential.
In other news, McDonald’s and Krispy Kreme are set to expand their collaboration, offering the company’s donuts in all McDonald’s stores. This expansion will take around two and a half years to allow Krispy Kreme to increase its distribution capabilities. This partnership is expected to attract a broader demographic, increase sales, and provide more options and convenience to customers.
