Business educated: African Americans with advanced degrees turn to entrepreneurship. (Facts & Figures).

African Americans with advanced degrees are nearly twice as likely to go into business for themselves than their white counterparts, according to The Southern California Minority Business Atlas, the first comprehensive study of minority businesses in Los Angeles and Orange County, published jointly by the Community Development Technologies Center (CDTech) and Merrill Lynch. The region where the study was conducted is considered a bellwether for minority business.

"The size and diversity of the business population in Southern California place it in the forefront when considering the health and future of minority-owned businesses in America," says Robert Pierce, director of research at CDTech.

The study, which looks at some 1,200 businesses--130 of which are black-owned--reveals that 28% of black business owners in the area have graduate degrees. In contrast, the study found that only 17% of entrepreneurs in other minority groups, and only 15% of whites had graduate degrees.

Dr. Cecilia Conrad, a professor of economics at Pomona College and a member of the BLACK ENTERPRISE Board of Economists, feels that this data represents a complete turnabout in black business ownership. In times past, the majority of black businesses were mom-and-pop stores whose owners had little or no college education. But Conrad points out that the glass ceiling is still in place. "Historically, it has been the pattern that blacks reach a certain level in a company and don't get any higher. As a result of not getting the promotions inside the white corporate structure, more educated blacks are seeking entrepreneurial success."

Race-Ethnicity of Business Owners and
Educational Attainment

                         Afr. American   Other Minority   White

Less than High School         3%             4%             2%
High School                  16%            18%            17%
Some College                 24%            18%            22%
Completed College            25%            40%            41%
Some Grad. School             3%             3%             2%
Completed Grad. School       28%            17%            15%

Source: Atlas 2000

Note: Table made from bar graph.

Revenue Growth of African American Businesses
Whose Owners had Different Levels of Education

                         Decreased   No Change  Increased

Less than High School        25%         25%        50%
High School                  33%         22%        44%
Some College                 26%         33%        41%
Completed College             4%         19%        78%
Some Grad. School            25%         50%        25%
Completed Grad. School       24%         24%        52%

Source: Atlas 2000

Note: Table made from bar graph.

Percentage of Businesses by Type of Financing:
L.A. and Orange County, 2000

                       Afr. American   Other Minority   White

Bank Loans                   32%            35%          47%
Credit Card                  49%            40%          40%
Financial Serv. Firm         10%            10%          16%
Government Loans             10%             5%           5%
Personal Loans               25%            22%          24%
Trade Credit                 21%            28%          38%
Asset Financing               9%             4%           8%
Home Equity Loans            15%            14%          17%

Source: Atlas 2000

Note: Table made from bar graph.