Educational advancement will determine how fast Hispanics move into jobs traditionally associated with the middle class. The number of Hispanics receiving college degrees has grown from 20,096 in 1978 to an estimated 81,415 this year – a quadrupling in 26 years. According to projections by HispanTelligence, the number of degrees will reach 147,539 by 2030 (see table).
"The children and grandchildren of Hispanic immigrants progress up the educational and income ladder in the same way as immigrants who came here from European countries," states James P. Smith in a study for RAND Corp. The study found that successive generations of Hispanic men have experienced significant improvements in wages and education relative to native-born Anglos.
"The number of Latinos going to college and graduate school is growing very rapidly. The number taking MBA degrees and finance is increasing," says Jorge Pinto, director of the Center for Global Finance at Pace University in New York. "At the same time, the world Latino population is growing rapidly. Therefore, the need for insurance, financial planning, and investing will increase."
While Mr. Pinto, a former official at the World Bank and Mexico's Nafinsa development bank, sees higher education for Hispanics as a growth industry, educational financing remains a problem. A recent study commissioned by Sallie Mae and conducted by the Tomas Rivera Policy Institute found that more than half of Hispanic parents and 43 percent of Hispanic young adults could not name a single source of college financial aid. The study concluded that in the future schools need to inform students better about their options, because "the more Latino young adults know about financial aid, the more likely they are to attend college."
Even with improvements in educational attainment, many Hispanics will prefer the entrepreneurial route to middle-class status rather than traditional employment. Throughout its history, Hispanic Business has focused coverage on Hispanic entrepreneurs. Projections by HispanTelligence show the number of Hispanic companies will increase from 1.63 million currently to 6.2 million by 2030 (see table).
"The Hispanic community isn't just large in number, but exerts a significant influence on the way business is conducted," says Fariborz Ghadar, director of the Center for Global Business Studies at Pennsylvania State University and author of the forthcoming book Global Tectonics. He points to the marketing and operational efforts of Corporate America during the past decade to attract Hispanic consumers, suppliers, and employees as a portent of future development.
Mr. Pinto sees growth opportunities for media, financial services, and higher educational services in the U.S. Hispanic market. He expects "a very dynamic generation of younger Latinos who were born in the U.S. " to become the next generation of entrepreneurs. "The country needs that younger generation to keep the country developing, and a lot of that will be borne on the shoulders of Latinos," he predicts.
With more Hispanic start-ups entering the development pipeline, more mature Hispanic firms will reach the institutional middle market, defined as companies with revenues between $5 million and $50 million. For the last 20 years, the Hispanic Business 500 has provided a measure of the Hispanic middle market. In 1985, less than half the list had revenues of more than $5 million; currently, 399 companies on the list fall in the middle market, with the remainder above the $50 million level.
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