Senate Select Committee on Economic Development and Technological Innovation

2 December 2025

No chapters available yet

Senate Select Committee on Economic Development and Technological Innovation Mon, 1 Dec 2025 California State Senate

00:00 - 03:24

Speaker 1

Afternoon, everyone. I feel so far away from all of you, but thank you so much for joining us here today. What an honor to have all of you, joining us for this very important hearing. The Committee on Minority Economic Development will now come to order. I want to thank once again all of those that are from the area, those that came from far.

This is such an important conversation and I do appreciate your time. I'm state senator Susan Rubio. I represent the Sangamo Valley and portions of San Bernardino County. I wanna highlight that this committee's mission draws on compelling evidence we've heard. Investment in minority owned businesses, especially Latino owned businesses generate greater returns for California.

The latest research shows US Latino GDP reached 4,100,000,000,000.0 in 2023, and it's growing faster than the overall national economy with Latino consumers spending alone topping $2,700,000,000,000. Such scale and momentum demonstrates that Latino entrepreneurship, labor, and purchasing power are not marginal. They are central to the economic vitality of our state and also of our nation. In the face of rising cost, shrinking margins, and systematic inequalities, it is our responsibility, not only as leaders, but community members to ensure that policy, capital, and opportunity is aligned to support these businesses. By doing so, we do more than sustain individual businesses.

We strengthen local communities, support their families, and reinforce the foundation of a stronger, more inclusive economy. We already had two hearings earlier this year. The first was held in Sacramento. We heard directly from small businesses and policy experts about the barriers and still so many issues facing our small businesses, but also with a particular focus in increasing procurement opportunities for these small businesses, both in public and private sector. The second committee hearing was held in Los Angeles.

That committee was focused on bringing together creators and innovators to discuss how California can expand access to opportunity, in particular in the entertainment industry. Both hearings have already given us a much clearer understanding of the challenges that are shaping minority economic development in our state. The insights we gain have already been instrumental in shaping and informing policy that we plan to bring forward, and also strengthening the pathways to entrepreneurship. Today's hearing will add another layer, and that is as it pertains to access to capital. Once again, I want to reiterate that myself, along with my colleagues, are committed to ensuring that the laws and policies reflect the reality that minority owned businesses are among the most effective engines of growth and stability for this state.

Before I proceed with our first panel, I would like to invite Doctor. Hayes Valpista from UCLA to join us for a few words. He has been the leading force behind the research in Latino GDP, and we for the information you've already provided. And when you're ready, you may proceed. Thank you for being here.

03:24 - 06:01

Speaker 2

Thank you so much, senator. What I'd like to do, if we can get my first slide up, is actually give you a brief insight into a report we'll be releasing next week on Latino owned businesses. And, there we go, some brand new data, literally just hot off the computer, which points out the need for and the opportunity in accessing capital. Now, just to context this, this is the growth of both the non Hispanic white population in Los Angeles County. You notice how it started growing about 1920 for about forty years, grew and hit about four eight point eight million, has now fallen off.

Then, fifty years later, came the Latino growth curve, hit exactly the same spot of 4,800,000,000. But Latino population growth meant something really important, which was Latino business growth. Here we see the growth going back to 1972 of Latino owned businesses in The United States. And in fact, as we look from 2007 to 2013, this is U. S.

Overall, Latino owned businesses have grown a total of 157%, whereas non Latino grew only 23%. That is, Latino owned businesses grew four times as fast as non Latino businesses. Now, when you talk about business, particularly in the census world, you have the large businesses, 500 or more employees, you have small businesses that employ people anywhere from one to four ninety nine, and then small businesses that don't yet employ anybody. So let's look at where most Latino businesses are located, the one to four ninety nine employees. From 2007 to 2023, Latino small employer businesses had an average growth rate, average, that's over fifteen years of 6.1% year over year average, whereas non Latino, only 1.3%.

I mean, if you're going to make an investment, are you going to invest in something that grows only 1.3% a year or 6.1% per year? In fact, as we look more recently, year over year from 2018 to 2023, and this covers the COVID, as we see Latino employer firms grew every single year, whereas in 2020 and 2022, actually non Latino firms shrank. You had fewer at the end of the year than at the beginning of the year. So this is very strong, sturdy growth, weathering even COVID. Now, what's important and where the real opportunity is, overall, about four out of five businesses in The US have zero employees, none.

Ask anything about this video — I analyse its transcript to answer.