The Current State of Diversity-Owned Businesses in Massachusetts

At the national level, minority-owned and diversity-owned businesses have been a strength of the United States economy. In fact, over the last 10 years, diversity-owned businesses created 4.7 million jobs. Currently, the US Senate Committee on Small Business and Entrepreneurship reports that there are more than 4 million minority-owned businesses in the United States, with sales that total nearly $700 million. 

These numbers show the significant contribution that businesses that are 51% owned by immigrants, members of the LGBTQIA community, People of Color, Women, Veterans, People with Disabilities, and those who identify as American Indian/Alaskan Native, Asian, Native Hawaiian/Other Pacific Islanders continue to have on our nation’s economy. 

While these national statistics are positive, there is still much more that remains to be done to ensure that all businesses can share in economic prosperity and growth including at the state level. The Commonwealth of Massachusetts has areas where improvements can be made according to recent data that shows the growth of these businesses. 

Let’s explore some of the State’s current trends and numbers in relation to diversity-owned businesses. 

For this article, we will be using interchangeably diversity-owned, minority-owned, and minority-owned business enterprises as various organizations use different terms to express similar findings.

Current State Statistics 

Let’s take a look at how the Commonwealth is doing in terms of business contracts being awarded to minority-owned businesses, the equality of pay for women, and LGBTQ+ impacts on the national and state economy. 

Access to Contracts 

One of the major challenges that minority-owned businesses face is the ability to gain access to business contracts in the public and private sectors. 

According to a 2021 report by GBH News, a Boston-affiliated news station, “Black and Latino people now make up more than a fifth of the state’s population, but own just over 3% of businesses with employees — less than half the national rate of Black and Latino business ownership.” More specifically, GBH reports that “Black-owned businesses were awarded only $11 million in state contracts and Hispanic-owned businesses awarded only $12 million out of the $4.8 billion spent by state agencies.”

These numbers show that there is a long way to go in supporting minority-owned businesses (known as MBEs) to gain access to compete for such contracts. 

Former Governor Charlie Baker and equity advocates pointed to a range of issues (the struggle to get bank loans and the longstanding racial wealth gap) that cause these low ownership rates and the ability to compete for state contracts. 

LGBTQ+ Impacts on MA 

While the news is good nationally for members of the LBGTQ+ community in terms of business ownership and growth, closer to home the numbers in employment could use improvement. Nationally, LGBTQ+ enterprises contributed $1.7 trillion and 33,000 jobs to the US economy. However, at the state level, (specifically in the Greater Boston area) these strides are met with some dismal statistics for the same demographic. For instance, a large share of LGBTQ+ youth of color are unemployed (33%), unstably housed (16%), and food insecure (31%). 

At the state and local level, these numbers need to be addressed to help this vulnerable community thrive both in business and socio-economically. 

As we move forward in 2023 and in the years beyond, we will be monitoring improvements in these trends and how the Diversity Directory encourages these enterprises through awareness and elevation.