Understanding Disparities Makes Good Business Sense
Amid all the flurry of executive orders and posturing of the first few weeks of the Trump Administration, many things have fallen through the cracks and not received the attention they deserve. This is by design: by saturating the media with news, it becomes overwhelming to try and keep up.
Much of the big shifts from the federal government we have seen so far this year will create real harm and impact on people. Some of it will be challenged in court and ultimately go nowhere. But some — especially the smaller, more pernicious moves — will have lasting impact that we can’t yet see.
One decision that did not get much attention was the Census Bureau’s decision to remove all data on small businesses that includes information on the demographics of their owners. This may seem like a small and wonky change, but if that data is not restored, it will have a large impact on our ability to best support entrepreneurs in the way they need.
If we do not have demographic information, we cannot understand the disparities between different types of business owners, by race or gender, but also by location, age, education, income, or any of the different identifying markers that the Census Bureau collects. Without these disparities, we cannot design effective solutions to support businesses, such as designing new capital products or supporting expanded supply chains and diverse procurement opportunities.
This kind of data has helped inform important research and work to identify trends in business ownership. For example, Brookings, in partnership with Path to 15|55, has an upcoming event and report release on how supporting Black entrepreneurship has led to a period of sustained inclusive growth in this country. Without the kind of data that the Census has now taken away, we would not be able to understand this trend, learn from it, and invest in solutions that can help build from it to support further growth.
On its face, the Census’ decision to remove this data from public use has no real purpose beyond some ideological bent against a race-conscious approach to governing and program implementation. But the only thing the removal of this data does is make it harder for the government to understand the needs of the people it’s supposed to serve: Its citizens. This level of specificity of purpose can get lost in the noise of everything that’s going on and the wonkiness of the decision. But that is what the choice to gate this data leads to — worse services for taxpayers. Not only that, but it will hinder growth that helps the economy and creates jobs.
We know that demographic data is important for services because companies do it all the time. Customer data is one of the most critical things for a business to have, because if you do not know who you are selling to, you can’t sell to them. Without data, you can’t know what kind of products and services would benefit the potential customers you are trying to reach.
As more and more people spend more time online, making purchases and interacting on social media, customer data has become more granular and more valuable. The value of the entire customer data industry reaches into the billions of dollars. Whoever knows the most about their customers will be able to sell to them the best. If the government is not sharing this kind of data for small businesses, then they are essentially being taken out of the market.
There is a recent push to make the government more responsive to taxpayers and better serve their needs. If that push is authentic and genuine, then there needs to be a better investment in collecting more data, not less. Otherwise, we cannot expect results that match with the needs of the broader public.
As I’ve said before, these things just make good business sense. Our government has new leaders that claim to be more business oriented, so I hope they begin to consider all the ways equitable impact can help them achieve their goals.
