A new analysis of recently available U.S. Census data finds that businesses owned by Asians are growing faster in number and generating higher average revenues than ‘total’ businesses in the United States, California, and Inland Southern California. Within the Inland region, average per firm revenue at Asian-owned businesses exceeded average revenue at total firms in the area by more than $20,000 (6.6 percent) during the study period.
The analysis, released today by the UC Riverside School of Business Administration Center for Economic Forecasting and Development, examines data from the U.S Census Bureau’s newest Survey of Business Owners, which is published once every five years and provides the most current snapshot of the nation’s proprietors. The most recent survey includes data on business owners through 2012 and was released this past December.
The analysis finds that from 2007 to 2012, revenues grew by nearly 40 percent at Asian-owned businesses in the United States as a whole and in Inland Southern California, and grew by nearly 30 percent at Asian-owned businesses in California. That compares to much lower single-digit revenue growth among total businesses in the Inland region (9.1 percent), the state (8.2 percent), and the nation (9.3 percent).
“This segment of the business population has significantly outperformed the norm in terms of establishment growth and establishment size, as measured by revenue per firm,” said Robert Kleinhenz, executive director of research at the Center for Economic Forecasting and Development and one of the report’s lead authors. “Some of the growth may have been spurred initially by the recession, but the numbers we’re seeing indicate that this group of business owners is truly thriving.”
The number of businesses owned by Asians is also growing faster compared to all businesses, according to the analysis. Between 2007 and 2012, the total number of firms increased modestly in Inland Southern California (8 percent), California (5 percent), and the United States (3.4 percent), while Asian-owned firms jumped considerably more: 14.6 percent in the region, 21 percent in the state, and 25.3 percent in the nation. Moreover, unlike many other minority groups, the share of Asian business owners is larger than the share of Asians employed in all three geographies, an important measure of economic and social advancement. According to the analysis, Asians comprised 7 percent of the employed workforce in Inland Southern California but made up 10.3 percent of businesses in the region, comprised 14.5 percent of California’s workforce but made up 17 percent of all state businesses, and comprised 5.3 percent of the U.S. workforce but made up 6.9 percent of all the nation’s businesses.
Additional key findings:
- Revenues generated by Asian-owned businesses in Inland Southern California make up 11 percent of the region’s total business revenues; in California, they make up 15.1 percent and in the United States, they account for 5.8 percent.
- Per firm revenue at Asian-owned businesses was highest in Inland Southern California as compared to the state and nation. In 2012, each Asian-owned business, on average, generated $388,100 per year in the region, $383,200 in the state, and $368,200 in the nation.
- The employment picture for Asian-owned businesses in the Inland region falls somewhere between that of the state and the nation. With 61,500 workers, Asian-owned businesses in Inland Southern California account for 11.1 percent of the region’s total employment, lower than the employment share in California (15.5 percent), but higher than the share in the United States (6.3 percent).
- With a growth rate of 8.6 percent, hiring at Asian-owned businesses in Inland Southern California has lagged the state and nation. Hiring at Asian-owned businesses grew 13.3 percent in California and 28.2 percent nationally.
- The strong revenue outcomes for Asian-owned businesses may be related to the types of industries they enter. In Inland Southern California, Asian-owned businesses have significant concentrations in Health Care and Professional, Scientific and Technical Services, both of which tend to be high income sectors. Moreover, Asian-owned businesses in Financial Activities (a typically high income sector) grew rapidly from 2.7 percent in 2007 to 11 percent in 2012, making it the industry with the 3rd largest share of Asian-owned businesses in the region.
The Center for Economic Forecasting and Development has released a series of reports exploring minority business ownership in Inland Southern California and beyond. A copy of the current report, Minority Business Ownership in Inland Southern California: Changes and Trends, Asian-Owned is available to download. The first three reports focused on Women-owned, Hispanic-owned, and Black-owned businesses.