Women are pushing themselves out of the shadows today and taking their entrepreneurial talents to the forefront, according to recent data from the U.S. Census Bureau.
Over the last 17 years, women-owned businesses have increased dramatically. According to the State-Owned Business Report, commissioned by American Express, the rate of increase is a staggering 68% since 1997, with more than 9.1 million women-owned businesses operating in 2014, up from 8.6 million in 2013. This surging-growth pace, which has doubled in three years, has helped to generate nearly $1.5 trillion in revenues for women-owned businesses.
“The report clearly shows that women are choosing the path of entrepreneurship at record rates,” said Randi Schochet, vice president of brand strategy at American Express, in a statement.
Susan Duffy, the executive director of the center for women’s entrepreneurial leadership at Babson College, said this is very exciting news.
“Entrepreneurship is a central path to job creation and economic growth,” said Duffy. “And now women are starting businesses 1 ½ times the national average…This is, in large part, because they are starting from behind so they are playing catch up.”
“Entrepreneurship is a central path to job creation and economic growth... and now women are starting businesses 1 ½ times the national average. This is, in large part, because they are starting from behind so they are playing catch up.”
And catch up, they must. According to the latest Census Bureau statistics, in 2007 women-owned businesses accounted for only 28.7% of all businesses nationwide (in the same year’s figures, women were partners in 45.7% of businesses). More recently, a new study from the Harvard School of Business found that men -- especially physically attractive ones -- have a much easier time securing funds from venture capitalists.
“Investors prefer pitches presented by a male entrepreneur compared with pitches by a female entrepreneur, even when the content of the pitch is the same,” the study said. “The effect is moderated by male physical attractiveness: attractive males were particularly persuasive, whereas physical attractiveness did not matter among female entrepreneurs.”
“This needs to change,” said Bobbie Brinegar, the president of OWL, a non-profit which focuses on the needs of women, age 40-plus. “It’s ridiculous to think males have more persuasiveness, and we need to get rid of this unfounded bias by advocating for the millions of smart and successful women entrepreneurs out there.”
Still, not everyone is completely on board. Morra Aarons-Mele, the founder of Women Online, a web-based Internet marketing service, recently wrote in her Harvard business school blog that more women starting businesses isn’t necessarily a good thing.
“Perhaps instead of unquestioningly cheering women starting businesses, we need to more critically examine why so many women are leaving [bigger companies] and how we might get them to stay,” she wrote. “Entrepreneurship has been marketed as a great alternative to the strictures of a traditional job – but that vision is often a fantasy.”
Perspective aside, there are some hard facts to note. In certain states, women-owned firms have higher -- or lower -- economic clout as measured by growth in numbers, revenues and employment, according to the AmEx study. North Dakota, Nevada, Arizona, Georgia and Washington, D.C. have the highest ranking. The states with the lowest economic clout for women-owned businesses are Wisconsin, Ohio, Rhode Island, Vermont and Iowa.
“I think we need to shift the story of entrepreneurship to make it much more inclusive,” said Duffy, who points to a woman’s sensibility as a strong additive, not a deterrent. “More women are realizing that [small business] is a viable career path and that it isn’t just for white males…. [The growth in women-led businesses] is a fabulous thing. Broader perspective is what leads to interesting innovations, and the more we have, the better off we will be.”