As we enter into March, which is Women’s History month, it’s important to remember that we have come a long way baby!
2016 was a strong year for entrepreneurs, and the outlook for growth in 2017 is just as promising. Women-owned/led businesses now account for 13% of middle-market firms (companies with revenues between $10 million and $1 billion) Middle Market Power Index by American Express Global Corporate Payments and Dun & Bradstreet.
Are the conditions right for a boom of Women Entrepreneurs?
The truth is, we still have a long way to go for gender parity on many levels especially in business. Despite the fact that in the USA entrepreneurs are 64.5 % male, women are quickly closing the gap. The latest report from AMEX The 2016 State of Women-Owned Businesses shows that indeed there is growth in the USA.
Besides being an entrepreneur, I write and research quite a bit on the topic of women entrepreneurs as an engine of growth for the economy both domestically and globally. When women succeed as entrepreneurs, there is ALWAYS a positive economic and social impact.
Mixed Reviews about entrepreneurship in the USA
According to the Kauffman Foundation
“Many entrepreneurial indicators are below the peak that preceded the Great Recession, and certain indicators of entrepreneurial dynamism are still in a long-term decline”.
Alarmingly, startup rates are currently half of what they were in 1980, hitting the lowest point in the last twenty years in 2013.
The Good news
Despite the marked drop off in the number of start-ups in the USA, the good news is that we are on an upswing. Women-owned businesses have seen the strongest increase amongst all minorities.
How does the USA compare to other countries?
The recent election has been cited as the main cause for the United States to drop three positions to the No. 7 spot among the world’s “Best Countries” according to a Nations brand research study released 3/6/17 by Y&R, Wharton and U.S. News & World Report. The slip in the ranking reflects changing perceptions following the election of Donald J. Trump as president, which may ultimately impact the small business sector.
Entrepreneurship and new business opportunities are part of that rank. This new report shows the erosion of what has become part of our National Brand – entrepreneurship. Our perception is that entrepreneurship goes hand in hand with innovation as part of the United States National brand.
Although people in the USA consider that the USA is a global leader in entrepreneurship, it is not. Germany now occupies the coveted number one spot for perceived readiness for entrepreneurs. In the past few years, Berlin has ramped up as a competitor in the tech sector and is now home to “Silicon Allee” with hundreds of new startups.
Countries where women’s access to fundamental resources are ensured including, access to education, access to internet access to bank accounts and small and medium-sized enterprise (SME) training programs the UK, Sweden and Australia score higher than the USA.
When it comes to Leadership and Rights the USA ranks #1 but it tanks at #17 when it comes to having a Pipeline for Entrepreneurship, meaning women are NOT engaging in startups at an equal rate to men, women do not see business opportunities, or feel they have the skills to start a business. Interesting, Nigeria holds the #1 spot for Pipeline for Entrepreneurship and there are several other African nations ahead of the US. The 2015 Global Women Entrepreneur Leaders Scorecard, sponsored by Dell Inc. and produced by ACG Inc,
This is not surprising, just our lending practices alone are a BIG barrier for women entrepreneurs. In 2016 the average funded business loan for women-owned firms was $99,000. In comparison, the average size of a business loan for men was $105,172. However, men-owned businesses had about a 25 percent better chance of their loan being approved. Once the Federal Reserve hikes interest rates, as is expected later this year, it will make the cost of borrowing much higher – making a business loan much more expensive.
Where are the women entrepreneurs in the USA?
The geography is widespread, and as can be expected concentrated in urban hubs, what is surprising is where they are.
According to the AMEX report, the top 10 cities where women entrepreneurs are located are:
1.Memphis – 122.2%
2. Detroit – 121.4%
3.Charlotte – 105.4%
4.Miami – 94.7%
5.Orlando – 83.5%
6.Atlanta – 75.8%
7.Dallas – 74.3%
8.Houston – 70.4%
9.Las Vegas – 69.8%
10.Austin – 65.2%
What industry sectors are women entrepreneurs pursuing?
Women start and own businesses in every industry and two percent or more are found in 13 of the 19 major industry sectors.
The majority breaks out like this
Other Services 2 1.9M firms
Health Care and Social Assistance 1.6 M Firms
Professional, Scientific, and Technical Services 1.3M firms
Administrative and Support and Waste Management and Remediation Services 1.1M firms
Retail Trade 1.0M firms
Women 45 to 54 own the greatest number of businesses in nearly all industries.
Mega Trends in Entrepreneurship that will help women
According to the State of Entrepreneurship 2017 | ZERO BARRIERS: Three Mega Trends Shaping the Future of Entrepreneurship. These trends will continue to add momentum to the growth of women entrepreneurs.
- New Demographics of Entrepreneurship – Women have a lot of catching up to do – we are not yet fully reflected in the composition of our nation’s entrepreneurial population.
- New Map of Entrepreneurship – New geographic hubs are emerging beyond Silicon Valley and the East Coast. Just look at the cities where there is a flourishing entrepreneur scene for women!
- New Nature of Entrepreneurship – Technology has changed how we do business and that has changed the nature of entrepreneurship dramatically. From the platform economy to Main Street – we are doing business differently.
The future is bright for women entrepreneurs
There is very good reason for optimism and some red flags ahead. The expectation is that the number of women entrepreneurs will continue to surge because women and institutions are finally getting behind this explosive growth!