Performance of Black, Latino, Asian and Native American IT/Telecom Companies

Black, Latino, Asian and Native American Minority businesses that operate in industries such as wired telecom carriers, Internet publishers and broadcasting and telecommunications resellers outperform minority businesses in almost all other industries.

In 2008, EuQuant (which powers the Gazelle Index) examined 47,000 small businesses that were registered with the federal government through the Central Contractor Register (CCR). These businesses generally had fewer than 500 employees. The study, entitled Increasing the Capacity of the Nation’s Small Disadvantaged Businesses, was commissioned by the Congressional Black Caucus Foundation.

The results revealed that the most successful industries for minority owned businesses were software publishing, internet publishing and broadcasting, data processing, wired telecom carriers, and web hosting and related services. For example, 7% of firms owned by Asian and Pacific Americans operated in the telecom related industries.

This was also true for 7.3% of businesses owned by Black Americans; 4.2% among Latino-owned businesses; 3.4% among Native American-owned businesses; and 13.2% among businesses owned by Subcontinent Asian Americans. In comparison, only 4.3% of white owned firms operated in these related industries.

The findings also revealed that the average revenue of minority firms in those industries was more than twice that of minority firms in other industries.  For example, Asian Pacific American IT/telecom firms earned $8.7 million, while they earned $3.9 million overall. Black American-owned IT/telecom related businesses earned $9.0 million, and $2.1 million overall.

Among Latinos, IT/telecom related businesses earned $3.2 million and $3.0 million overall; for Native Americans, IT/telecom businesses earned $9.9 million and $4.1 million overall; among Subcontinent Asians the average revenue in IT/telecom was $8.3 million for firms in the industry and $3.5 million across all industries. Finally, among non-minority business owners, average IT/telecom revenue was $3.6 million while average revenue across all industries was $4.5 million.

Among all IT/telecom related industries, wired telecom carriers had the highest revenue. Specifically, Asian Pacific American’s revenue averaged $74.8 million, Black American’s average revenue was $61.0 million, Latino’s revenue was $9.4 million, Native American’s revenue was $22.5 million, Subcontinent Asian’s revenue was $134.8 million, and revenue of non-minorities was $18.8 million.

These findings suggest that within the IT/telecom industries, black-owned small businesses, Asian Pacific American owned small businesses, and Native American owned small businesses have closed the revenue gap with white owned small businesses. A fact that is highly correlated to opportunities made available by supplier diversity programs.