Babson College Scholars Examine Entrepreneurship by African American Women

A study by scholars at Babson College in Wellesley, Massachusetts, finds that Black women are more likely than White women and even more likely than White to start a new business.

The study, summarized by the authors in the Harvard Business Review, found that 17 percent of adult Black women in the United States are starting or running new businesses. This compared to 10 percent of White women and 15 percent of White men.

The study also found that only 3 percent of adult Black women in the United States were running what is called a mature business. They found that start-ups run by Black women are far more likely than businesses started by White men and women to be in highly competitive retail or service sectors. “These are small, informal businesses with low margins in crowded competitive contexts. They are more difficult to sustain over the long term,” the authors explain.

The authors note that while only about one-quarter of all Black adult women in the United States have a four-year college degree, the vast majority of Black women who start their own business are college-educated. Therefore, according to the authors, “universities are uniquely positioned to provide Black women with experiential education practices that enable them to learn and practice entrepreneurship and develop capabilities for overcoming constraints they may face, as well as offer peer support and collaboration, in addition to expert advising.”

The research is part of the Global Entrepreneurship Monitor, an annual comprehensive survey of entrepreneurship rates and attributes, conducted in more than 120 economies since 1999. The scholars from Babson College lead the research in the United States.

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