Minority-Owned Small Businesses Generate $193B in California

We’ve said it before: if California was a nation, it would have the fifth-largest GDP among world economies.

Now, thanks to a new report from California’s Office of the Small Business Advocate (CalOSBA), we can tell you that if California’s minority-owned small businesses were a state, they’d have an annual GDP that exceeds the GDP in 18 of the 50 U.S. states.

CalOSBA’s State of Diverse Small Businesses in California is its first report on the statewide impact of minority-owned businesses, with a focus on Asian, Hispanic, Black and Native American small businesses.

Prepared by Beacon Economics, the report, which defines a small business as one that has less than 20 employees, found that minority-owned small businesses generate nearly $193 billion in economic output and almost $29 billion in tax revenue each year while supporting almost 2.6 million jobs in the Golden State.

Minority-owned businesses account for 45% of the small businesses in California, nearly 1.9 million establishments, based on 2019 census data, the report said. The largest concentration of minority-owned businesses is in Inland Empire, Los Angeles County and Kern County in SoCal, and North San Joaquin Valley, which includes Merced San Joaquin and Stanislaus County.

The business sector with the highest concentration of minority-owned businesses in California is Trade, Transport and Utilities — including wholesale trade, retail trade, transportation and warehousing, as well as utilities — which encompasses more than 300,000 minority-owned firms.

California’s Asian Pacific Chamber of Commerce, African-American Chamber of Commerce and Hispanic Chamber of Commerce took the lead in the research project, including selecting a research lead and a roster of community-based partners to collect data from the state’s diverse business communities.

CalOSBA said Beacon’s analysis is designed to help CalOSBA and private organizations better target supportive government policies and investments for minority-owned firms and entrepreneurs, as well as raise the visibility of their contributions towards job creation, tax revenues and healthy communities to policymakers in the public and private sectors.

“This level of detailed data is critical to our effort to effectively promote economic development policy that serves the needs of these businesses on the statewide and local levels,” Pat Fong Kushida, president and CEO of the California Asian Pacific Chamber of Commerce, said in a statement. ”Stakeholders around the state can now plainly see the priority of serving these small business owners.”