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News & Events Data Dialogue: The Road to an Equitable Small Business Recovery

Sep 29, 2020

On September 29, 2020, the JPMorgan Chase Institute hosted a Data Dialogue to discuss racial gaps in small business financial outcomes – both pre-pandemic and during the pandemic – as well as how policy and programs can promote a more equitable small business recovery. The virtual discussion included experts from the Federal Reserve Bank of New York, NYC Department of Small Business Services, and UC Santa Cruz, who are at the forefront of using data to track and reduce inequities in the small business sector. See below for summary and replay of the conversation. 


Event Replay: 


The discussion kicked off with panelists sharing research on small business outcomes during the COVID-19 pandemic and differences by owner race.

  • Small Business Owner Race, Liquidity, and Survival (JPMC Institute) – Research documenting racial gaps in small business revenues, profit margins, cash liquidity, and survival that existed prior to the COVID-19 pandemic.
  • Small Business Financial Outcomes during the COVID-19 Pandemic (JPMC Institute) – An exploration of small business financial outcomes during the COVID-19 pandemic using data through May 2020, with a focus on industries in which Black- and Hispanic-owned firms are overrepresented and industries where the impact of COVID-19 has been particularly severe.
  • The Impact of COVID-19 on Small Business Owners (Rob Fairlie) – An examination of how COVID-19 impacted small business owners in mid-April 2020. The report finds that the number of active Black-owned businesses dropped 41 percent in April, while Latinx business owners fell by 32 percent, and Asian business owners dropped by 26 percent.
  • Double Jeopardy: COVID-19’s Concentrated Health and Wealth Effects in Black Communities (Federal Reserve Bank of New York) – Research discussing the effects of COVID-19 on Black communities and Black-owned businesses in particular. The report looks at why Black-owned firms have been almost twice as likely to shutter as firms overall during the pandemic.

Research shows that the challenges small businesses face and the differential outcomes for minority-owned businesses are not new but have been exacerbated by the pandemic. Panelists stressed that liquidity constraints remain one of the biggest challenges for small business owners struggling to pay bills and keep workers employed, as well as one of the biggest impediments to starting a business. Even before the pandemic, there were disparities in small business funding, which contribute to liquidity gaps. The racial wealth gap is likely to exacerbate these dynamics, as minority-owned small businesses have more constrained personal and family capital access.

Panelists also highlighted the digital divide, as consumers have shifted to online purchasing during the pandemic and differences in business-readiness. This shift has disadvantaged smaller small businesses in particular, since many did not have an online presence prior to the pandemic.

Granular data and research can provide policymakers with an understanding of how small businesses are faring and can inform recovery efforts, but panelists noted that information gaps remain. Commissioner Jonnel Doris, New York City Department of Small Business Services, highlighted information that would be helpful to government agencies, including correlations between storefront vacancies and business profiles (e.g. sector, owner demographics), in-person versus online retail sales, and information on the types of businesses that are starting versus shuttering. He also emphasized the importance of analyses cut by race, gender, and sector.

With research as a baseline for understanding the challenges small business owners – and minority business owners in particular – are facing, the conversation pivoted to policies and programs needed to ensure a more equitable recovery. Panelists concurred that a public health strategy should remain the first priority, as consumers will not be fully comfortable returning to businesses until the virus is contained. Additionally, at the federal level, there is an opportunity to build on aspects of the Paycheck Protection Program (PPP), including the role that CDFIs and fintech companies played in dispersing money to business owners. At the local level, panelists saw an opportunity to continue programs that are working, such as targeted assistance to the most vulnerable communities and grants and loans to minority- and women-owned businesses. Local governments can also leverage procurement strategies and supplier diversity programs to help support recovery.

We are grateful to the panelists for their expert insights and perspectives, which are invaluable as we navigate the road to an equitable small business recovery. 




Jonnel Doris       
NYC Department of Small Business Services 

Rob Fairlie
Professor of Economics
UC Santa Cruz 

Claire Kramer Mills
Assistant Vice President and Director of Community Development Analysis
Federal Reserve Bank of New York



This event is part of the Institute’s “Data Dialogue” engagements, an ongoing series of conversations with leading experts, policymakers, business and nonprofit leaders linking research with important policy topics of the day.