Although men have long been the majority leaders in the business world of entrepreneurship, with upwards of 71 percent of United States business owners listed as males, women are now becoming a growing force, according to The Atlantic’s senior associate editor, Gillian B. White. According to The Atlantic, a report issued by the Institute of Women’s Policy Research (IWPR) reveals that women are a progressively growing entrepreneurial worldwide presence:
Business Ownership Figures Since 1997
- Female American business owners—1997: 26 percent
- Female American business owners—current: 29 percent (up 3 percent from 1997)
- Women-owned business: 68 percent increase since 2007
- Any-owned business: 47 percent increase since 2007
- Female American minority-owned businesses: 265 percent increase since 1997
Also according to the IWPR research, minorities comprise one in three female-owned businesses, which is an increase from one in six in the past twenty or so years.
Jessica Milli, a senior research associate at IWPR, told The Atlantic that the characteristics of minority women who choose entrepreneurship might have something to do with the increase. “Women of color are more likely to be younger when they first found their business,” says Milli. “Given today’s climate—when a lot of purchasing occurs online and social-media usage can really make or break a business—this can mean that those businesses might have a competitive advantage. Their owners are more in touch with their customers.”
In 1997, minority women comprised less than 1 million business owners. Today, business ownership has been quickly increasing among African American and Hispanic women who comprise 14 and 11 percent, respectively, of all women-owned businesses. According to Milli, increased education in these groups has helped improve ability and sparked the desire toward business ownership. Legislation targeted toward women- and minority-owned business has also had a positive impact. For example, the Small Business Jobs Act of 2010 and the Women’s Equity in Contracting Act, both sought to assist women-owned businesses secure government contracts, notes Milli. “Things like that really aim to put women-owned businesses and minority-owned businesses at a competitive advantage,” Milli points out. “It restricts competition, which has really helped to boost revenues and help more businesses get into the industry.”
There are still problems, however, notes White. Policies have not corrected the serious wage gap between men and women in businesses and women typically begin their businesses with smaller startup capital funding. For example, female-owned businesses make about 25 cents for every dollar earned by male-owned businesses, which is a significantly larger gap than what is seen in the labor market at large, in which women earn about 83 percent of what men earn, according to Economic Policy Institute data. “Women-owned business are far less likely to have any start-up capital, and when they do they have much less than men-owned business,” says Milli. This is due to funding issues, difficulty obtaining loans, and less favorable loan terms, Milli notes. Women’s businesses tend to be smaller and located in areas that drive less income than male-owned businesses, which may be seen as less attractive to financers who approve the businesses for smaller or stricter loans.
Interestingly, “The highest amount of growth in the number of women-owned businesses were actually very male dominated industries,” says Milli. For example, according to White, women are gaining in numbers in utilities and mining, typically male-dominated industries. These areas have seen 82 and 39 percent growth, respectively. While true equality is not here yet, small business ownership is “moving toward equality in terms of representation, which is a great thing,” Milli says, adding that, “Overall, the picture is optimistic.”
The Atlantic; Women Are Owning More and More Small Businesses; Gillian B. White; April 17, 2015.