Minority-Owned Businesses are Exporting

Minority Business More Likely to Export

Exporting is good for American business, good for American workers and good for American jobs. Ninety-five percent (95%) of the world’s customers lie outside the United States and Minority Business Development Agency is committed to working with U.S. companies to help American-made goods and services succeed in the global market.

Export Sales

Minority businesses have a competitive advantage in global trade based on their cultural ties, language skills and nimbleness. The 2007 Survey of Business Owners reveals that among firms with export sales representing 20 percent or more of their overall receipts, minority-owned businesses are twice as likely to export compared to non-minority firms. In addition, minority firms are more than three times as likely to have businesses generating 100 percent of all their sales in exports compared to non-minority respondent firms. This finding is quite substantial because it can support the Administration’s goal of doubling the nation’s exports by the end of 2014. Minority businesses can play an important role in meeting that goal through exports.

Minority-Owned Business in Wholesale Trade Sector Lead Export Sales

By industry, firms in the wholesale trade, manufacturing, management of companies and enterprises, retail trade, and information are more likely to have export sales. Among all industry sectors, minority-owned business in wholesale trade led all minority- and non-minority-owned firms’ export activity. About 32 percent of minority respondent firms in wholesale trade had export sales, compared to 20 percent of non-minority firms. In addition, minority firms were more likely to have exporter firms in Finance and Insurance, and in the Professional, Scientific and Technical Services industry sectors than non-minority firms.

Global Operations

In terms of global operations, minority respondent firms were also more than twice as likely to have operations abroad compared to non-minority firms and publicly held firms. Among all minority-owned firms, those owned by Native Hawaiian and Other Pacific Islander, followed by Asians and Hispanics were more likely to have operations established outside the United States. It makes sense that many of these operations are supporting minority business. By industry, minority respondent firms were also more likely to have operations abroad in 14 of 19 broad industry sectors compared to non-minority firms. These include wholesale trade,information, manufacturing, transportation & warehousing,retail trade, and educational services to name just a few.

In a report to the President on the National Export Initiative (NEI) one recommendation included leveraging the vast capabilities of Minority Business Enterprises (MBEs) in exporting. The report confirms MBEs participate at a high rate in global commerce, which provides the U.S. with a unique and compelling opportunity to help increase U.S. exports by MBEs and create sustainable jobs. Between 1997 and 2007, MBEs outpaced nonminority firms in growth of employment, gross receipts, and number of firms. Studies show that MBEs are twice as likely to export as non-minority firms are. In support of NEI, Commerce’s Minority Business Development Agency (MBDA) will work with Trade Promotion Coordinating Committee (TPCC) partner agencies to design outreach and trade facilitation programs specifically geared to MBEs, to increase their participation on international trade missions and to strengthen their links to international trade centers.

The landscape is ripe for minority-owned firms to continue to expand their sales in the global market and to support the President’s National Export Initiative.