Puerto Rican Entrepreneurship in the U.S....U.S. Census Bureau’s Survey of Business owners1, Puerto Rican business firms in the U.S. employed over 250,000 employees and generated

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Puerto Rican Entrepreneurship in the U.S.

NatioNal treNdsAlthough Puerto Rican entrepreneurs only made 1 per-cent of nation’s total business establishments in 2012, they are the fastest growing entrepreneurs in the United States. As of 2012, more than half of all business firms in the U.S. were owned by non-Hispanic whites (69.8%) followed by Hispanics overall (12%), non-Hispanic blacks (9%), and Puerto Ricans (1%). In a 10-year span, Puer-to Rican owned business firms increased by 96 percent, from 109,475 in 2002 to 258,221 in 2012. Corresponding-ly, all Hispanic business firms also grew from 1.6 million in 2002 to 3.3 million in 2012, an increase of 43 percent. On the other hand, non-Hispanic black entrepreneurs grew from 1.2 million to 2.5 million, with an increase of 72 percent. Lastly, non-Hispanic white business firms were the only group to experience no growth in the nation, from 87 percent in 2002 to 70 percent in 2012, declined by 19 percent (see table 1).

GeNder Nationally, more than half of all businesses were male-owned (55%) followed by 36 percent owned by females and the remaining 9 percent were both female and male owned in 2012 (see figure 1). Contrary to the 2012 nation-al rates, the share of Puerto Rican female entrepreneurs (53%) showed higher rates of businesses ownership rela-tive to their Puerto Rican male counterparts (46%) in the U.S. (see figure 1). In contrast to 2007, Puerto Rican male-owned businesses (54%) was higher compared to females (40%) and male/female owned businesses (5%). Similarly to Puerto Rican female entrepreneurs, non-Hispanic black female entrepreneurs (59%) also showed higher rates rel-ative to their male counter parts (39%) and to the nation as a whole (36%) in 2012. On the other hand, male-owned business firms were higher among non-Hispanic whites and Hispanics overall (57% for non-Hispanic white male owned firms and 52% for Hispanic male-owned firms) than

Puerto rican entrepreneurs were the fastest growing business firms in the U.S. According to the most recent U.S. Census Bureau’s Survey of Business owners1, Puerto Rican business firms in the U.S. employed over 250,000 employees and generated $24.4 billion in sale revenues in 2012. Driven by population growth within the U.S. mainland and the recent Puerto Rican migration from Puerto Rico, Puerto Rican owned businesses exploded throughout the nation, especially in areas of new settlement. Data from the 2002, 2007, and 2012 U.S. Census Bureau’s Survey of Business Owners were used to analyze national and state level trends among Puerto Rican business owners relative to the other groups in the nation.

ReSeARCh BRief issued April 2017By: Jennifer Hinojosa Centro RB2016-14

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female-owned businesses (33% for non-Hispanic white female owned firms and 44% for Hispanic female owned firms) in 2012.

Among, all female entrepreneurs in the nation in 2012, Puerto Rican (53%) and non-Hispanic black (59%) were more likely to be business owners than non-Hispanic white (33%) and Hispanic (44%) female entrepreneurs in the

U.S. The findings for Puerto Rican male owned business-es (46%) showed higher rates than non-Hispanic blacks (39%) but lower than the national rate (55%), Hispanics overall (52%), and non-Hispanic whites (57%).

Nationally, the gender gap between male and female entre-preneurs was 23 percent in 2007 and declined to 18 per-cent 2012, a difference of 5 percentage points (see figure

2002 2007 2012% change

2002 to 2012

% change 2007 to

2012Puerto rican 109,475 0.5% 156,466 0.6% 258,221 0.9% 96% 62%Non-hispanic White 19,899,839 86.6% 20,334,403 75.1% 19,278,260 69.8% -19% -7%Non-hispanic Black 1,197,567 5.2% 1,760,065 6.5% 2,471,143 8.9% 72% 38%hispanic 1,573,464 6.8% 2,260,269 8.3% 3,305,873 12% 75% 43%Non-Puerto Rican hispanic 1,463,989 6.4% 2,103,803 7.8% 3,047,652 11% 73% 42%Total Population 22,974,655 100% 27,092,908 100% 27,626,360 100% 0% 0%

Source: 2002, 2007, and 2012 Survey of Business Owners, U.S. Census Bureau

Table 1. Owned Business by Race and ethnicity, 2002–2012

figure 1. Business Owner’s Gender Composition, 2007 and 2012

Puerto rican hispanic Non-hispanic White Non-hispanic Black All firms

40%

35%

28%

47%

30%

54%54% 54%

45%

53%

5%

11%

18%

8%

18%

53%

44%

33%

59%

36%

46%

52%

57%

39%

55%

1%4%

10%

2%

9%

Female-Owned Male-Owned Male/Female Owned

2007

Female-Owned Male-Owned Male/Female Owned

2012Source: 2007 and 2012 Survey of Business Owners, U.S. Census Bureau

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2). This nation-wide trend were also evident across all entre-preneurs regardless of race and ethnic background. Accord-ing to the 2012 Survey of Business Owners, Puerto Ricans and non-Hispanic black female entrepreneurs were among the only group to reverse the male to female gender gap. As shown in figure 2, Puerto Rican female entrepreneurs surpassed Puerto Rican male entrepreneurs by 7 percent-age points (53% of Puerto Rican business firms owned by females and 46% of Puerto Rican business firms owned by males) and reversed the gender gap from 14 percent in 2007 to -7 percent in 2012. In other words, Puerto Rican

female entrepreneurs outpaced their male counterparts in 2012. Similarly, non-Hispanic black female entrepreneurs also exceeded non-Hispanic black male entrepreneurs in 2012, as well as in 2007. For example, there were at least 3 percent more female black owned businesses than males in 2007 and the number of female entrepreneurs increased to 20 percent in 2012 (see figure 2). On the other hand, non-Hispanic white firms showed the widest gap between male and female entrepreneurs, 26 percent in 2007 and 24 percent in 2012. This finding was also found among Hispan-ic owned businesses in both years, from 19 percent in 2007

figure 2. Gender Gap among U.S. Business Owners, 2007 and 2012 2007 2012

Puerto Rican Hispanic Non-Hispanic White Non-Hispanic Black All FirmsSource: 2007 and 2012 Survey of Business Owners, U.S. Census Bureau

14%

-7%

19%

7%

26%24%

-3%

23%

18%

-20%

2012 2007 diff % change 2007 to 2012

Puerto ricans $24.4 billion $16.6 billion $7.8 billion 47%hispanics $473.6 billion $350.7 billion $123 billion 35%Mexicans $204.7 billion $155 billion $49.8 billion 32%Cubans $96.6 billion $58.3 billion $34.3 billion 59%Non-hispanic white $11 trillion $10.2 trillion $710 trillion 7%Non-hispanic blacks $150.2 billion $136 billion $14.5 billion 11%All U.S. firms $33.5 trillion $30 trillion $3.5 trillion 12%

Source: 2007 and 2012 Survey of Business Owners, U.S. Census Bureau

Table 2. Total Revues by Race and ethnicity, 2007 and 2012

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to 7 percent in 2012.

iNDUSTRy & TOTAl ReveNUeS In 2012, Puerto Rican owned businesses generated more than $24.4 billion in total sale revenues, a 47 percent increase from 2007 ($16.6 billion). Relative to other groups in the U.S., non-Hispanic whites ($11 trillion) showed the highest combined gross receipts (also known as total sale revenues) followed by Hispanic owned firms ($473.6 billion), and non-Hispanic blacks ($150.2 billion) in 2012. As shown in table 2, compared to all U.S. firms (12%), Puerto Rican (47%) owned businesses showed the highest percent change in total sales revenues, fol-lowed by all Hispanic firms (35%), non-Hispanic blacks (11%), and non-Hispanic whites (7%), between 2007 and 2012. This finding suggest Puerto Rican owned businesses are not only increasing in terms of the number of business establishments throughout the nation, but they are showing a promising eco-

nomic future as their total sales revenues increased by 47 per-cent in a 5 year span.

The 10 largest Puerto Rican owned firms in the U.S. in-cluded the following industries: ‘other services’ (21%), ‘health care and social assistance’ (16%), ‘administrative and support and waste management and remediation ser-vices’ (13%), ‘professional, scientific, and technical ser-vices’ (10%), ‘construction’ (9%), ‘retail trade’ (7%), ‘arts, entertainment, and recreation’ and ‘transportation and warehousing’ (5% for both industries), ‘real estate’ (4%), and lastly ‘educational services’ (3%) in 2012. Among all Puerto Rican owned business firms that generated over $1 billion in total sale revenues included: ‘professional, scien-tific, and technical services’ ($3.7 billion), ‘wholesale trade’ ($3.5 billion), ‘construction’ ($3.1 billion), ‘retail trade’ ($2.9 billion), ‘healthcare and social assistance’ ($2.8 billion),

2002 2007 2012 % Changerate of Growth (10yrs)

Absolute Change

+/-Other services (except public administration) (605) 16,274 22,551 53,264 2.3 22.7 36,990Administrative and support and waste management and remediation services 9,823 16,388 33,350 2.4 24 23,527

Health care and social assistance 19,635 22,582 42,249 1.2 11.5 22,614Professional, scientific, and technical 10,875 17,745 26,648 1.2 14.5 15,773Construction 10,649 16,735 22,021 1.1 10.7 11,372Retail trade 10,728 12,671 17,930 1 6.7 7,202Arts, entertainment, and recreation 5,572 7,881 12,395 1.2 12.2 6,823Transportation and warehousing (603) 7,458 11,028 12,077 0.6 6.2 4,619Real estate and rental and leasing 5,818 11,520 10,216 0.7 7.6 4,398Education Services 2,686 3,505 6,600 1.5 14.6 3,914Accommodation and food serices 2,295 2,569 6,167 1.7 16.9 3,872Finance and insurance (604) 2,420 3,970 4,703 0.9 9.4 2,283Wholesale trade 1,967 2,520 3,861 0.9 9.6 1,894Manufacturing 1,442 1,675 3,034 1.1 11 1,592Information 1,507 2,144 2,824 0.87 8.7 1,317Agriculture, forestry, fishing and hunting (601) 140 592 584 3.2 31.7 444Management of companies and enterprises 7 21 19 1.7 17.1 12Industries not classified 129 - 25 -0.8 -8.1 -104

Source: 2002, 2007, 2012 Survey of Business Owners, U.S. Census Bureau.

Table 3. Percentage Distribution of Puerto Rican Owned Business firms by industry, 2002-2012

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‘administrative and support and waste management and remediation services’ ($1.9 billion), ‘other services’ ($1.4 billion), and ‘manufacturing’ ($1 billion).

Puerto Rican female owned businesses generated $6 billion in 2012. Top 10 industries owned by Puerto Rican female entrepreneurs included: ‘health care and social assistance’ (26%), ‘other services’ (23%), ‘administrative and support and waste management and remediation services’ (15%), ‘professional, scientific, and technical services’ (9%), ‘retail trade’ (7%), ‘arts, entertainment, and recreation’ (4%), ‘real estate’ (4%), ‘educational services’ (3%), ‘accommodation and food services’ (3%), and lastly ‘construction’ (2%). In 2012, female Puerto Rican owned businesses largest revenue by industry included: ‘healthcare and social as-sistance’ ($1.2 billion) followed by ‘professional, scientific, and technical services’ ($862 million), ‘construction’ ($579 million), and ‘other services’ ($562 million).

state treNdsIn 2012, Florida (27.6%) showed the largest proportion of Puerto Rican owned businesses in the nation, followed by New York (21.3%), New Jersey (7.7%), California (5.6%), Pennsylvania (5.4%), Illinois (4.2%), Connecticut (3.6%), Texas (3.2%), Massachusetts (2.9%), and Georgia (2%). The increasing Puerto Rican population in the U.S. South was a result of migration from Puerto Rico due to the Is-land’s financial crisis and internal migration from states of traditional settlement has led states like Florida become a hot spot for Puerto Rican entrepreneurs.

As shown in table 4, the presence of Puerto Rican owned businesses continues to grow rather than decline in states of traditional settlement like: New York (21.6%), New Jer-sey (7.7%), Pennsylvania (5.4%), Illinois (4.2%), Con-necticut (3.6%), and Massachusetts (2.9%) in 2012. More importantly, it is evident, based on the most recent 2012 and 2002 Survey of Business Owners from the U.S. Cen-sus Bureau, Puerto Rican entrepreneurs are increasingly

figure 3. Puerto Rican Business Owners, 2012

Source: 2012 Survey of Business Owners, U.S. Census Bureau

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2002 2007 2012Alabama 311 0.3% 310 0.2% 640 0.2%Alaska 141 0.1% 84 0.1% 199 0.1%Arizona 1,127 1.1% 1,392 0.9% 1,961 0.8%Arkansas 332 0.3% 394 0.3% 269 0.1%California - - 13,137 8.5% 14,430 5.6%Colorado 449 0.4% 854 0.6% 1,343 0.5%Connecticut 3,283 3.3% 4,088 2.7% 9,341 3.6%Delaware 184 0.2% - - 834 0.3%District of Columbia 151 0.2% 223 0.1% 330 0.1%Florida 24,480 24.4% 42,374 27.5% 71,291 27.6%Georgia 1,664 1.7% 3,125 2% 5,207 2%Hawaii 662 0.7% 1,041 0.7% 1,408 0.5%Idaho 46 0% 235 0.2% 147 0.1%Illinois 4,194 4.2% 5,576 3.6% 10,859 4.2%Indiana 783 0.8% 995 0.6% 1,361 0.5%Iowa 98 0.1% 67 0% 154 0.1%Kansas - - 115 0.1% 541 0.2%Kentucky 259 0.3% 243 0.2% 411 0.2%Louisiana 653 0.7% 874 0.6% 1,043 0.4%Maine - - 277 0.2% 194 0.1%Maryland 1,078 1.1% 2,219 1.4% 2,330 0.9%Massachusetts 2,873 2.9% 3,232 2.1% 7,596 2.9%Michigan 555 0.6% 679 0.4% 2,471 1%Minnesota 257 0.3% - - 596 0.2%Mississippi 46 0% 48 0% 240 0.1%Missouri 244 0.2% - - 517 0.2%Montana - - 12 0% 136 0.1%Nebraska 95 0.1% - - 246 0.1%Nevada 304 0.3% 561 0.4% 1,178 0.5%New Hampshire 152 0.2% 205 0.1% 425 0.2%New Jersey 10,555 10.5% 11,485 7.4% 19,909 7.7%New Mexico 306 0.3% 639 0.4% 386 0.1%New York 31,658 31.6% 34,387 22.3% 55,850 21.6%North Carolina 1,234 1.2% 1,972 1.3% 4,554 1.8%North Dakota - - 28 0% 32 0%Ohio 1,145 1.1% 2,243 1.5% 4,034 1.6%Oklahoma 249 0.2% 186 0.1% 466 0.2%Oregon 177 0.2% 642 0.4% 516 0.2%Pennsylvania 2,952 2.9% 5,321 3.5% 13,913 5.4%Rhode Island 530 0.5% 818 0.5% 1,822 0.7%South Carolina 573 0.6% - - 1,455 0.6%South Dakota 6 0% 5 0% 38 0%Tennessee 389 0.4% 694 0.5% 1,371 0.5%Texas 3,362 3.4% 6,945 4.5% 8,351 3.2%Utah 182 0.2% - - 422 0.2%Vermont 46 0% 43 0% 124 0%Virginia 1,584 1.6% 4,036 2.6% 4,511 1.7%Washington 370 0.4% 1,253 0.8% 1,128 0.4%West Virginia 47 0% 214 0.1% 131 0.1%Wisconsin 357 0.4% 878 0.6% 1,492 0.6%Wyoming - - 37 0% 154 0.1%Total 100,146 100% 154,186 100% 258,357 100%

Source: 2002, 2007, 2012 Survey of Business Owners, U.S. Census Bureau.

Table 4. Distribution of Puerto Rican Owned Businesses by State, 2002 and 2012.

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growing throughout the nation.

The surge of Puerto Rican owned businesses in non-tradition-al states like Florida, Texas, California, Georgia, North Car-olina, and Virginia doubled and in some states even tripled in size since 2002 (see table 4). For example, the number of Florida’s Puerto Rican entrepreneurs tripled in the state, from 24,480 business establishments in 2002 to 71,291 in 2012, an addition of 46,811 in a 10 year span. Correspondingly, Puerto Rican owned businesses in Texas, although ranked in 8th place, also grew from 3,362 in 2002 to 8,351 in 2012, an increase of at least 5,000 additional Puerto Rican estab-lishments. Modest growth was seen across Southern states like: Georgia (+3,543), North Carolina (+3,320), and Virginia (+2,927). The growth of Puerto Rican entrepreneurs in the U.S. South is attributed to the internal migration of Puerto Ricans from (1) traditional states to the southern region, (2) southern states (like Florida) to other southern states, and lastly (3) migration from Puerto Rico.

Six of the top 10 sates- New York (21.6%), New Jersey (7.7%), Pennsylvania (5.4%), Illinois (4.2%), Connecticut (3.6%), and Massachusetts (2.9%) accounted for 43 per-cent of all Puerto Rican owned businesses in the U.S. While Florida outranked New York in 2007 and 2012, in terms of the proportion of Puerto Rican owned businesses, New York Puerto Rican entrepreneurs along with other states of traditional settlement grew between 2002 and 2012. For example, in terms of absolute growth of Puerto Rican entrepreneurs, Massachusetts increased by 4,723 while Connecticut increased by 6,058, New Jersey increased by 9,354, and lastly New York increased by 24,192 Puerto Ri-can entrepreneurs between 2002 and 2012.

A ClOSeR lOOk AT flORiDA AND NeW yORkIn 2012, Puerto Rican entrepreneurs generated at least $4.8 billion in Florida and $3.2 billion in New York alone in total sales revenue. Popular industries among Puerto Rican owned businesses in Florida included: ‘other ser-vices’ (21%), ‘administrative and support and waste man-agement and remediation services’ (18%), ‘professional, scientific, and technical services’ (10%). Although, Puerto Rican owned businesses within the ‘manufacturing’ sector made up only 2 percent in Florida State, it generated $1.1 billion in sales revenue alone. This accounted for 23 per-

cent of all total sales revenue among Puerto Rican owned firms in Florida. Unlike Florida, not one industry reached $1 billion among all Puerto Rican owned businesses in New York State. Popular industries among Puerto Rican owned businesses in New York included: ‘health care and social assistance’ (23%), ‘other services’ (22%), and lastly ‘administrative and support and waste management and remediation services’ (12%).

SUMMARy AND CONClUSiON Overall, the findings from this report showed Puerto Rican owned businesses is on the rise nation-wide, more impor-tantly, in areas of both new and old settlements. The rapid increase of Puerto Rican entrepreneurs was attributed to the growing and dispersion of Puerto Rican communities throughout the nation, especially areas in the South and West Coast. Despite Puerto Rican population declines in some states of traditional settlement, Puerto Rican entre-preneurs continue to grow.

1 Data for the Survey of Business Owners (SBO) is collected every 5 years and provides selected socio-demographic and economic charac-teristics of business owners in the United States and Puerto Rico. The most recent data available is 2012.

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