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In recent years, African American-owned businesses have emerged as a growing force in the American economy, contributing significantly to employment, revenue, and local development.
New data from the U.S. Census Bureau, analyzed by the Brookings Institution, reveals that the number of employer businesses owned by African Americans grew by nearly 57% between 2017 and 2022.
That increase, nearly 70,000 new firms over five years, represents one of the most notable surges among any racial or ethnic group in the country.
These gains are not just symbolic. In 2022 alone, African American-owned employer firms generated over $212 billion in revenue, paid more than $61 billion in salaries, and hired an average of eight employees per business.
That same year, the total number of Black-owned employer firms reached about 195,000, a 21% jump from just the year before.
The findings, published by Brookings, demonstrate that Black entrepreneurship is not only growing faster than before, it is playing a vital role in shaping the post-pandemic economic recovery.
The surge in Black business ownership came in the wake of the COVID-19 crisis, which had initially hit minority-owned firms the hardest. But the bounce-back was swift.
In 2020, following a sharp dip in business formation, new applications rebounded strongly, particularly among African Americans.
Between April and July 2020, the number of total business applications across the country more than doubled.
By 2022, that trend had stabilized, with nearly 424,000 employer firms launched that year alone. Among them, Black entrepreneurs accounted for a growing share.
This momentum, however, has not fully closed the longstanding racial gap in business ownership.
Although African Americans make up about 14.4% of the U.S. population, they own only 3.3% of employer firms, a modest increase from 2.2% in 2017.
That leaves a wide margin to overcome, and progress remains uneven. For instance, while the number of Black-owned businesses has risen significantly, white- and Asian-owned firms still represent a far higher share than their respective population sizes.
Still, the data shows that recent Black business growth has not come at the expense of others.
According to the Brookings report, overall revenue, payroll, and job creation among all racial and ethnic groups increased between 2017 and 2022, even as the share of Black-owned firms expanded.
In other words, the rise in Black entrepreneurship has been additive, not competitive, contributing to a broader wave of economic growth.
One of the most encouraging findings is the rate of revenue and payroll growth among Black-owned firms.
Over the five-year period, revenue rose by nearly 66%, and payroll by almost 70%. The number of employees hired by these businesses increased by more than one-third.
These are the highest gains of any group other than American Indian and Alaska Native business owners, who also saw strong growth during the same period.
African American women in particular have led much of the recent progress. Between 2017 and 2022, the number of Black-female-owned employer firms jumped by more than 71%, outpacing the growth rate for male-owned businesses.
Revenue for women-led firms increased by 82%, compared to 64% for male-led ones. Yet, despite these strides, women are still underrepresented.
Of the nearly 70,000 new Black-owned employer firms created in the last five years, fewer than half were founded by women, even though women make up more than half of the Black population.
Across industries, African American entrepreneurs are increasingly expanding into sectors that offer higher growth potential.
Health care and social assistance remain the largest employer sector for Black business owners, but other fields like transportation and real estate have seen some of the fastest proportional growth.
From 2017 to 2022, Black ownership in the transportation sector nearly doubled, while real estate saw its share of Black employer firms rise sharply.
These shifts indicate that African American founders are not only entering the marketplace in larger numbers, they are also moving into industries where demand is strong and returns are higher.
Geography also matters. Cities like Atlanta, Charlotte, and Baltimore saw some of the largest increases in Black-owned employer firms, both in real numbers and as a share of total businesses.
Atlanta, for example, added nearly 7,000 new Black-owned firms in five years, doubling its already significant share.
In contrast, some places such as St. Louis experienced declines.
St. Louis lost more than 2,500 Black-owned employer firms between 2017 and 2022, the largest drop in the country, though it still ranks among the top cities in total count. Smaller metro areas like Dover, Delaware and Reno, Nevada, showed strong proportional growth, even with smaller base populations.
The picture changes somewhat when looking at non-employer businesses, those that have no paid employees.
In 2021, 96% of Black-owned businesses fell into this category, far above the national average of 83.8%.
While these ventures are often the starting point for entrepreneurs, many struggle to grow due to limited access to capital, markets, or mentorship.
For the racial gap in ownership to close, more of these businesses will need to transition into employer firms that can scale and hire.
Brookings’ researchers argue that reaching parity in business ownership is achievable, but will take sustained public and private investment.
Their “Path to 15/55” project outlines ways that cities, lenders, and policymakers can support Black-owned businesses through better access to capital, more inclusive contracting practices, and community-based economic development.
The goal is to grow Black-owned employer firms from the current 3.3% to at least 14.4%, matching the Black share of the U.S. population.
This effort, they argue, is not about charity, it’s about economic potential. Supporting Black-owned businesses means supporting job creation, tax revenue, community development, and national competitiveness.
As the Brookings report puts it, “Expanding the success of Black businesses benefits all Americans by making the economy more dynamic, inclusive, and resilient.”
There is no question that Black-owned businesses are helping to reshape the American economy.
By: Joshua Narh