By Omar Duque
It’s no secret that Hispanics contribute significantly to the US economy, but a new report on Hispanic-owned businesses in Illinois shows Hispanic businesses face unique challenges, but have the potential to generate an additional $67 billion in revenues and create 200,000 jobs for Illinois residents.
The Report, The State of Hispanic-Owned Businesses in Illinois: Untapped Economic & Job Creation Potential, was conducted by DePaul University’s Driehaus College of Business in partnership with the Illinois Hispanic Chamber of Commerce.
SMALL BUT GROWING
While there’s significant potential, the reality is that Hispanic-owned businesses are small. The report shows that Hispanic-owned businesses currently employ 50 percent less people than other businesses in Illinois. They earn less too, on average about $182,747 in business revenue compared with $1,370,694 for all other Illinois businesses. And Hispanic businesses comprise a small percentage, only five percent, of all companies in Illinois.
But it’s not all bad news. Hispanic businesses are growing faster than other businesses. Between 2002 and 2007, the number of Hispanic-owned businesses increased by 43 percent and the total number of people employed by Hispanic-owned businesses increased by 28 percent. Today, there are more than 70,000 Hispanic-owned businesses in Illinois, employing more than 100,000 people and generating more than $15 billion in annual revenue.
IMPROVING EDUCATIONAL OUTCOMES
The Hispanic community is at a critical place. Today, there are more than 2.1 million Hispanics in Illinois, representing 16.3 percent of the Illinois population. In Chicago, 45 percent of public school students are Hispanic and one out of every three new births in Illinois is Hispanic. By 2050 Hispanics will comprise one-third of the US population.
Improving educational outcomes is essential. Hispanics continue to lag in higher educational success. Nationally, fewer than 20 percent of Hispanics 25 years and older hold a bachelor’s degree. According to a study by the Kauffman Foundation, The Anatomy of an Entrepreneur, 95 percent of successful entrepreneurs they surveyed had earned a bachelor’s degree and 47 percent had more advanced degrees.
Of the businesses we surveyed, 75 percent have a bachelor’s degree and 25 percent have obtained an advanced degree. Yet these businesses say they still need additional business training. Hispanic-owned businesses surveyed as part of our report listed financial challenges as their biggest barrier to growth, citing the need for training and assistance.
INVESTING IN THE HISPANIC COMMUNITY
Whether the rest of America cares to acknowledge it, the future of our country depends on the educational and economic success of Hispanics. We need significant investment to help address critical issues while we work to increase the number of Hispanic-owned businesses and begin to close the earning gap for existing Hispanic-owned businesses.
According to the report, if existing Hispanic-owned businesses grew revenues and earned the average of all other Illinois firms, collectively Hispanic-owned businesses would increase revenues by more than $67 billion and would employ 200,000 more Illinois residents. This won’t happen overnight and it won’t happen without concerted effort to bridge that earnings gap. But if collectively we can make progress, one business at a time, the economic benefits for Illinois will be significant.
THE CENTER FOR HISPANIC ENTREPRENEURSHIP
That’s why the Illinois Hispanic Chamber of Commerce is pleased to launch the Center for Hispanic Entrepreneurship (www.HispanicCenter.biz). The Center for Hispanic Entrepreneurship will provide unique business, economic development and entrepreneurial education programs to increase the success of Hispanic entrepreneurs.
For example, in 2014 the Center for Hispanic Entrepreneurship will launch ENTERpreneur, an innovative program for high school students that seeks to activate the talent and natural entrepreneurial inclination of Hispanic youth. The program will help develop leadership and problem solving skills and will focus on college admission and success, helping build the next generation of Hispanic business leaders.
A NEW ERA OF PROSPERITY FOR AMERICA
We believe that Hispanics will lead a new era of prosperity for America. That’s what drives our work. We’re dedicated to helping entrepreneurs grow their businesses, increase revenues and create jobs. We’re committed to addressing the unique needs of Hispanic business owners, working one-on-one with them to develop strategic growth plans and connecting them with the capital they need to build strong and successful businesses. And we’re committed to helping Hispanic youth succeed in college so that they too can become thriving professionals and entrepreneurs.
Omar Duque is the President and CEO of the Illinois Hispanic Chamber of Commerce (IHCC), the leading Hispanic business, networking, advocacy and development organization in Illinois.