Expanding Latino Entrepreneurship Research

Latino Entrepreneurship Kauffman Index

Latino entrepreneurship is a vastly understudied area, but one that my colleague Emily Fetsch has looked at previously. Earlier this Spring, I was fortunate to attend the first Stanford Latino Entrepreneurship Initiative (SLEI) Academic Conference. The SLEI, a collaboration between the Latino Business Action Network (LBAN) and Stanford University, says Latino entrepreneurship covers a very diverse set of individuals and firm types. Backgrounds, business models and available financing vary greatly—as does the challenges and opportunities of Latino entrepreneurs depending on geographic location. These insights are key as we think about the level, focus and scope of appropriate government economic policy to strengthen Latino entrepreneurship.

Diverse topic and research

Toward this goal, SLEI convened a group of prominent Latino entrepreneurship researchers to discuss the components that help create successful Latino businesses. The researchers approached the topic from a wide variety of perspectives. Some looked at Latino entrepreneurship from a national perspective, while others focused on in-depth case studies of specific locations such as Florida or Texas.

State of Latino Entrepreneurship Report

In order to capture the current state of Latino entrepreneurship and research on the topic, the SLEI created the State of Latino Entrepreneurship Report using a cleaned database of more than 1.4 million Latino-owned businesses (LOBs). This database was carefully constructed using several commercial databases to create a robust dataset.

From this list, an initial group of business owners agreed to be surveyed. The two survey panels (1,831 and 368 Latino business owners) represent one of the largest statistically significant panel on LOBs to date. The whole report is worth a read, but I want to summarize just a few of the key findings below:

  • As the Latino population rapidly grows, this translates into a similar growth in LOBs.
  • Sales for LOBs are typically much less than non-Latino owned businesses. If all sales were equal, then $1.38 billion would have been added to the economy.
  • LOBs have diverse customers and operate in a wide range of industries.
  • Market opportunity is a not a key motivation for most Latino entrepreneurs surveyed. Instead, most are motivated by internal, non-economic factors.
  • The report cites awareness of capital and financing options (such as the Small Business Administration) are an area for improvement.

I encourage you to learn more about this topic by connecting with the SLEI here.

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derek ozkal

Derek Ozkal

Derek Ozkal is a program officer in Research and Policy for the Ewing Marion Kauffman Foundation, where he assists with writing and analysis of various Research & Policy initiatives and administers grants, which includes managing and overseeing assigned grant portfolios, monitoring grantee performance, and reviewing grant proposals.