A decade of research into Latino entrepreneurs paints a picture of an innovative and resilient group of business owners who are a key driver of the U.S. economy.
“Latino entrepreneurs are an important contributor to the growth of the U.S. entrepreneurial ecosystem,” says George Foster, a professor of accounting and management at Stanford Graduate School of Business and faculty director of the Stanford Latino Entrepreneurship Initiative, which has just published the 10th annual State of Latino Entrepreneurship report in partnership with the Latino Business Action Network.
This year’s report finds that Latino/a-owned businesses are forging ahead in a wide range of industries, often powered by cutting-edge technology and focusing on sustainability.
“We’ve been tracking the growth of Latino-owned businesses for over a decade now. Latino entrepreneurs are job creators — really focused on employee growth and benefits and showing growth across all industries,” says Marlene Orozco, author of the report and a research consultant at Stratified Insights.
The report is based on a national survey of more than 10,000 business owners, about half Latino and half non-Hispanic white. The respondents’ companies generate at least $10,000 in annual revenue and have at least one employee in addition to the owner.
The survey found that from 2018 to 2023, the number of Latino-owned businesses in the United States increased to 465,202 — growing 44% while the number of white-owned businesses slightly declined. Latino-owned businesses saw a 36% increase in total revenue during that time.
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“Latino entrepreneurs are job creators — really focused on employee growth and benefits and showing growth across all industries.”
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Marlene Orozco
“Latino-owned businesses are not solely in the food and accommodation industry. They are in professional services, they are in construction, they are in real estate. We saw incredible growth there,” Orozco says. Arts and entertainment and transportation were also top growth industries.
Researchers now have a decade of data on the profitability of Latino-owned businesses — which dipped to a pandemic-related low of 43% in 2021 and recovered to 84% in 2024, slightly outpacing white-owned businesses in 2023 and 2024.
The decade of research points to both strength and continuing challenges for Latino-owned businesses. “Latino-owned businesses have continued to grow in number in the U.S. at much higher rates than white-owned businesses,” says Deborah Whitman, director of the Center for Entrepreneurial Studies at Stanford GSB. “But in general, Latino-owned businesses tend to remain smaller than white-owned businesses. They’re less likely to get over $1 million in sales.”
This disparity has consequences for the entire economy: If Latino-owned businesses had the same average revenue as white-owned businesses, it would add $1.1 trillion to the U.S. economy.
Focus on Sustainability and Technology
This year’s survey uncovered ways Latino-owned businesses are charting new paths in sustainability and technology. Latino-owned businesses were more likely than white-owned businesses, for example, to implement at least one sustainability-related practice, such as water conservation or renewable energy use.
The research uncovered similarities between Latino- and white-owned businesses when it came to the integration of artificial intelligence and other technologies. About 20% of both groups reported using AI, citing similar reasons for its adoption: to improve the quality of goods and services, to replace or upgrade processes, to automate tasks, or to expand their range of goods and services.
When it comes to the effects of AI, Latino-owned businesses were more likely than white-owned businesses to say that AI had led to an increase in worker skill level and the number of workers. “A lot of people are quite concerned that AI is going to cause companies to lay people off. It may be that we’re just early in the process of AI, but we didn’t find that in our study,” Whitman says.
Nyah Zarate, a startup founder with a PhD in chemical engineering, has been at the forefront of sustainability and AI. She founded Continuous Solutions, which focuses on renewable energy, energy efficiency, and power electronics — and has been working with AI for over a decade.
“They’ve been integrating AI for a long time to remain competitive,” notes Rosalía Chávez Zárate, associate director of the Stanford Latino Entrepreneurship Initiative (no relation to Nyah Zarate).
Zarate also mentors and invests in startups, including ventures founded by Latinos and women. “It’s part of my broader mission to ensure that diverse voices are represented in the deep tech, energy, and defense sectors,” Zarate told the study’s authors. “I want to create wealth.”
Overcoming Funding Challenges
Despite their years of growth, Latino-owned businesses still face challenges, including access to capital. Only 21% of Latino entrepreneurs report receiving full funding for their ventures, compared with 40% of white entrepreneurs. An additional challenge: When they are denied funding, only 51% of Latino business owners receive an explanation as to why, compared with 87% of white business owners. This lack of feedback can make it more difficult for business owners to address gaps in their applications. “The feedback loop is not being closed,” Orozco says. “They’re left in the dark.”
Limited access to capital posed a challenge for Anuar Garcia, another entrepreneur focused on sustainability. While working at an electronics recycling company, Garcia saw salvageable/functioning computers being dismantled for parts. At age 21, he founded GreenTek Solutions to refurbish and resell used computer equipment.
Today the company employs 55 people and generates over $30 million in revenue. But in the early days of his business, Garcia was turned down for an equipment loan by a national bank and did not get information about how to improve his chances. He switched to a regional bank, where, he said, “I have a personal banker that knows my name, that knows my company, that knows what I do.”
This resilience exemplifies the general sense of optimism among Latino entrepreneurs, 72% of whom reported a positive outlook on their business trajectory this year.
“Latino entrepreneurs are certainly not a monolith, but they’re a highly motivated, highly resilient group,” Orozco said. “Many are immigrant-born. Coming to a new country is the ultimate form of risk-taking — and being an entrepreneur is a form of risk. There’s a lot that we should tap into in understanding the ways in which Latino entrepreneurs are fueling the U.S. economy.”
