This is explained by Lucy Pérez, senior associate at the consulting firm McKinsey & Company and co-author of a study on the impact of Latino entrepreneurs and their small businesses on the country’s economy.
From bustling urban centers to small towns across the United States, Latino communities’ economic power and business potential is immense. Today, 19 percent of the US population identifies as Latino or Hispanic.
According to the US Census Bureau, Latinos are expected to comprise approximately 28 percent of the US population by 2060. Latino small-business owners also skew younger, which means there It is great promise for long-term value creation and growth, especially as the education levels of these young entrepreneurs continue to rise.
These demographic shifts hint at the potential for Latino entrepreneurs and businesses to play an even larger role in the economy than they do now. Much of the promise lies with small and medium-size enterprises (SMEs) since 99 percent of Latino-owned businesses are small businesses. Latinos start more businesses per capita than any other racial or ethnic group in the United States. In 2023, they created 36 percent of new businesses in the United States—nearly doubling their representation in the overall population.
Latino small-business owners in the United States face considerable challenges. The gap between the success of Latino-owned SMEs and non-Latino-owned SMEs underscores those challenges and the fact that Latino small-business owners often have a harder time overcoming them. For example, Latino SMEs have more trouble scaling up enterprises, hiring and retaining talent, and getting access to funding.
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