Women continue to gain economic independence through business ownership in the United States and globally. The U.S. economy is impacted by businesses owned by women to the tune of $2.86 trillion. That is no small contribution to the overall economy. In 2008, women-owned businesses were responsible for 23.7 million people having jobs, in other words 16 percent of the work force. These businesses directly employed a total of 7.6 million people on their payrolls. To put these statistics into a broader perspective as to the importance of women-owned businesses, according to the Center for Women’s Business Research, women-owned businesses in the U.S. would have the fifth largest Gross Domestic Product (GDP) in the world, closely behind Germany, if these enterprises were a country. That is more than France, United Kingdom and Italy.
There is real growth in women starting and owning their businesses. In fact between 1997 and 2007, the U.S. Department of Commerce in 2010 reported that U.S. women owned businesses grew by 44%, twice as fast as their male counterparts. Women-owned enterprises also added 500,000 jobs to America’s workplace while other privately-held firms lost jobs. In 2008 there were one million women-owned employer firms, a 10 % increase from 2002.
The public and policy-makers need to change their perceptions of women-owned businesses’ contribution to the economy. Women normally have businesses in industry sectors that are typically comprised of smaller firms as well. Although women own 30 percent of privately-held businesses they account for 11 percent of total sales and 13 percent of employment for privately-held businesses. Currently women-owned businesses generate only 4.2 percent of all revenues and fall behind those of businesses owned by men. According to U.S. Department of Commerce, the average revenues of the majority of women-owned enterprises are 25% of the average of majority men-owned businesses. As mentioned earlier there is an incorrect and damaging perception that large corporations are more important than the small business sector. The opposite is true. Large corporations employ fewer people than the small business sector put together and are only .03 percent of all firms in the U.S.
The Future of Business
The U.S. Department of Commerce’s 2010 report, “Women-Owned Businesses in the 21st Century”, emphasizes the importance of women-owned businesses to the future of the U.S. economy. Why? When other privately-held firms were losing jobs, privately-held women-owned enterprises were growing and creating jobs. For women-owned firms to continue on such a growth path would enhance the growth of the U.S. economy.
· In Womenable’s 2007 Research, Brief, “Mapping the Missing Middle”, if women-owned enterprises with one to ten employees doubled their employment they would add 2.2 million jobs. As a result this would increase the total employment accounted by women-owned firms by 31%, thus increasing revenues by 50%. It would also add $109 billion in business receipts to the U.S. economy.
· Women-owned businesses produce goods and services needed by corporations and State and Federal governments. As women’s enterprises continue to grow and create jobs they become sustainable vendors for the corporate entities and government agencies.
· The growth of women-owned businesses in the United States will impact the education of our youth and provide them with both internships and paid employment.
Additionally, women’s business enterprises are important for the future. Successful women business owners will set an example for high school girls and college women to become entrepreneurs and future women leaders. Mentoring of a younger generation of women businesses will increase. As these businesses create wealth for themselves and their employees, women will also become financial “angels” for the growing population of young women businesses.