Minority Businesses Thrive in IT and Telecom

Occasionally, the Gazelle Index will examine the status of minority firms in different industries. In this examination, we take a look at firms in IT and telecom and related industries owned by firms owned by African Americans, Latino Americans, Asian and Pacific Islanders, Subcontinent Asians and Native Americans.

The results suggest that minority-owned businesses in telecom are doing much better than are firms in most other industries. Industries examined include software publishing, internet publishing and broadcasting, data processing, wired telecom carriers, and web hosting and related services, earn much higher revenues than average.

To investigate this in more detail, EuQuant (which powers the Gazelle Index) used government data from 2008. We analyzed the performance 47,000 minority and non-minority-owned small businesses that were registered with the federal government through the Central Contractor Register (CCR). Small businesses are generally defined as those having 500 or fewer employees.

Seven percent (7%) of firms owned by Asian and Pacific Americans operated in this industry, 7.3% among black Americans; 4.2% among Latinos; 3.4% among Native Americans; and 13.2% among subcontinent Asian Americans. In comparison, just 4.3% of white owned firms operated in IT and telecom industries.

This suggests that minority businesses are well represented in IT and telecom industries. Also, the average revenue of minority firms in the industry was more than twice that of minority firms in non-IT and telecom industries.

For example, the average revenue of Asian Pacific American firms was $8.7 million in IT and telecom while it was $3.9 million in all industries. Among Black Americans, it was $9.0 million in IT and telecom and $2.1 million overall; among Latinos, it was $3.2 million in IT and telecom and $3.0 million otherwise; for Native Americans, it was $9.9 million in IT and telecom and $4.1 million otherwise; among Subcontinent Asians the average revenue was $8.3 million in IT and telecom and $3.5 million overall. The figures suggest that minorities are performing on average better in IT and telecom industries than they are in unrelated industries.

Wired telecom carriers had the highest revenue within these industry segments. In that industry, Asian Pacific Americans revenue averaged $74.8 million, Black Americans $61.0 million, Latinos $9.4 million, Native Americans $22.5 million, Subcontinent Asians $134.8 million, and non-minorities $18.8 million.