Latino-owned firms fueled U.S. business growth from 2017 to 2023
Stanford research says Latino-owned businesses added 180,000 firms and nearly 1 million jobs over six years.
By Hana Yoshida · Markets Reporter
3 min read
Latino-owned companies accounted for a central share of U.S. business creation from 2017 to 2023, according to a Stanford report cited by University of Wisconsin–Madison faculty member Anthony Hernandez. The figures point to a growth engine that Hernandez says predates venture capital and depends partly on colleges that train future workers and founders.
The Stanford Graduate School of Business report found that Latino-owned businesses added 180,000 firms during the six-year period. White-owned businesses, by comparison, declined by about 140,000 firms, according to the report.
Hernandez wrote in Fortune that the data show Latino entrepreneurs helped offset a broader slide in business formation. He said Latino-owned businesses generated more net new firms and jobs than companies owned by any other major racial or ethnic group in the period covered by the Stanford research.
Jobs and revenue increased
The Stanford report also found that Latino-owned businesses added nearly 1 million jobs between 2017 and 2023. White-owned firms added about 658,000 jobs over the same span, according to the figures Hernandez cited.
Revenue at Latino-owned businesses rose from $495 billion to more than $832 billion, a 68% increase, according to the report. Revenue at white-owned firms grew 45% over the same period.
Hernandez also pointed to the broader Latino economy, which he said is nearing $4 trillion in annual output. He wrote that it is expanding at more than twice the pace of the overall U.S. economy.
Colleges framed as part of the pipeline
Hernandez, a faculty member in the Department of Educational Policy Studies at the University of Wisconsin–Madison and a former Title V administrator at a Hispanic-Serving Institution, linked those business trends to education policy. He argued that Minority-Serving Institutions help supply the workers and entrepreneurs behind the growth.
Research cited by Hernandez from the American Council on Education says Minority-Serving Institutions produce strong results in workforce outcomes, degree completion and economic mobility despite serving students with fewer resources.
He highlighted Compton College in California as one example. According to Hernandez, the Minority-Serving Institution has invested over the past decade in dual-enrollment programs, workforce advising, childcare, health care access, basic-needs support and transfer pathways.
IPEDS data cited by Hernandez show Compton College outperforming many peer institutions in completion and transfer outcomes while serving large numbers of Pell-eligible students. He said those outcomes affect local labor markets and the national talent pipeline.
Funding uncertainty
Hernandez wrote that federal support for Minority-Serving Institutions has become less certain as policymakers reduce or redirect some higher-education investments. He argued that cuts would work against the goal of producing more entrepreneurs.
He called for policymakers and companies to invest in workforce development, entrepreneurship education and student success at Minority-Serving Institutions. For businesses, he proposed partnerships such as internships, workforce programs, entrepreneurship centers and research collaborations.
Hernandez said education investments can benefit students, families, neighborhoods, employers and regional economies. His central argument is that the next generation of entrepreneurs is already being trained before investors enter the picture.
This story draws on original reporting from Fortune.