First Census-Led Annual Survey of Entrepreneurs Finds Women, Minorities Underrepresented

Researchers of American entrepreneurship now have a timelier socio-economic portrait of the nation’s employer-owned businesses as a result of a public-private partnership between the U.S. Census Bureau, the U.S. Department of Commerce’s Minority Business Development Agency, and the Kauffman Foundation. Last week, data from the first Annual Survey of Entrepreneurs were made publicly available, which provides a detailed picture of the American entrepreneur in 2014 by examining race, ethnicity, gender, and geography. A brief released by the Census Bureau notes that more than 480,000 firms with paid employees (roughly 8.9 percent) of the 5.4 million U.S. firms with paid employees in 2014 had been in business for less than two years, according to the recent Annual Survey of Entrepreneurs data.

Approximately 17.5 percent of all employer firms – nearly 950,000 – were minority owned, according to the survey. The $1.1 trillion in receipts generated by these minority-owned firms, however, accounted for just 3.3 percent of total receipts for all employer firms. Of minority-owned employer firms, 12.9 percent had been in business for two years or less, while only 1.4 percent had been in operation for 16 or more years. Women were owners of 19.4 percent of employer firms – 1.1 million in total – and collected $1.3 trillion in receipts, or 4 percent, of the national total. Of women-owned employer firms, 10.8 percent had been in business for less than two years, whereas 1.9 percent had been in business for 16 or more years in 2014.

A recent Wall Street Journal article analyzes the survey data and finds an oversized role of large companies in the U.S. economy. Public companies (and other firms where it is difficult to classify based on race, ethnicity, or gender) represented just 5 percent of the nation’s total businesses in 2014, yet accounted for two-thirds of sales and more than half of all employees, the authors note. Although 89 percent of businesses had fewer than 20 employees, these firms accounted for just 11 percent of sales and 17 percent of employees.

The intent to update the Survey of Business Owners – which the census had conducted every five years for nearly four decades – was announced in January 2015, by the partnership between the U.S. Census Bureau, the U.S. Department of Commerce’s Minority Business Development Agency, and the Kauffman Foundation. In May 2016, Lucia Foster and Patrice Norman of the Census Bureau released The Annual Survey of Entrepreneurs: An Introduction, which describes the motivation for the survey, the collection process, changes from the Survey of Business Owners, and the content of the core survey instrument. The Annual Survey of Entrepreneurs will also be released in 2015 and 2016, with the potential for releases in future years.

Geographically, the Annual Survey of Entrepreneurs provides information for the 50 states and the District of Columbia, as well as the largest 50 metropolitan areas. In the survey, however, firms with more than one domestic establishment are counted in each geographic area and industry in which they operate. Firms are counted only once in the survey’s U.S. totals.