Despite Bias, Women Entrepreneurs Are an Enormous Economic Force
What would happen if women-owned businesses vanished from the U.S. economy tomorrow?
The Center for Women’s Business Research (CWBR) has the answer: a loss of $2.8 trillion and a major blow for 23 million job-seekers. That's 16 percent of the U.S. labor force. And it's not even the report's most astounding figure. Researchers conducted the study to learn just how much women-owned businesses contribute to boost the national economy. They discovered if society could access all the untapped potential these female-led companies possess, those businesses would have the possibility to generate $10 trillion in revenue (roughly three to four times greater than current numbers).
The CWBR's annual data sets are just one way to look at how women play a major role in the American workforce. Here are a few others that drive home the point.
Adapting to life's changes.
Studies from the Pew Research Center support the claim of an increasing female workforce. In 2012, 57.7 percent of women ages 16 or older were employed or looking for work (compared to 70.2 percent of men). The difference between the two is called the labor-force participation gap. And it's closing: During the 1970s, the split was closer to 43 percent of women and 80 percent of men.
Like many statistics, the Pew Research Center findings can be viewed positively (expanded options for women) or negatively (men are having a harder time staying in the labor market through life changes). "Women are less likely than they were in the past to leave a job and drop out of the labor force to raise a family, take care of aging parents or family members, or for other reasons," the study notes. "Men, on the other hand, are increasingly more likely to quit, be laid off or fired, or otherwise leave a job and opt not to look for another."
The Census Bureau and the Women's Bureau within the U.S. Department of Labor both report that women now lead men in attaining college educations. Still, women who held full-time, year-round positions in 2014 earned 79 percent of men’s median annual earnings that same year.
Understanding differences in ownership.
Research from the National Association of Women Business Owners reveals that one in five firms with revenue of $1 million or more are woman-owned -- in spite of the multiple hurdles women face when entering the job market or launching their businesses. Vishal Gupta's work as an assistant professor of strategy has affirmed the discouraging effects gender stereotypes have on women with an entrepreneurial dream. "Where are the role models for women?" asks Gupta, who teaches at Binghamton University in New York. “Pick up any book on entrepreneurship: It’s all about men.”
Legislation alone can't eliminate deep-rooted biases associated with female business owners, according to Sarah Thebaud. An assistant professor of sociology at the University of California, she believes a real transformation requires broader changes in our cultural image of entrepreneurship. She suggests that investors, organizations and educators focus on the business plan rather than an individual's perceived personality traits.
That said, there are some significant differences in how women and men typically approach running their own company, according to a report published by the Centre of Entrepreneurs in partnership with Barclays. Compared to men, women entrepreneurs:
- Display less overconfidence when evaluating the track record of their business, despite reporting higher profits in comparison;
- Seek more opportunities in risky environments and are better financial risk takers;
- Show equal or more determination when it comes to starting or scaling up the business; and
- Prefer to reinvest business profits over making equity investments to sustain business growth.
Defining work and family roles.
U.S. Census Bureau's Income and Program Participation Survey found that 65.6 percent of first-time mothers worked during pregnancy from 2006 through 2008. That's a 21.2 percent jump from the same source's statistics for 1961 through 1965.
It's worth considering a few pointed questions, even amidst shifting roles for men and women within households:
- Why are women, in general, expected to raise a family?
- Is it necessary to slow down after having a baby?
- Do most working women also have sole or primary responsibility to take care of family members?
The Kauffman Foundation's "Labor after Labor" report highlights the social and economic limitations of working mothers, with a special focus on entrepreneurs. The study intends to create actionable data that can help working women with families reach their full economic potential. The foundation discovered that entrepreneurs raising children face a number of struggles. Among these are cognitive biases, greater work-family conflict and problems in achieving work-life balance -- one of the key factors that attracted them to an entrepreneurship in the first place.
Like many of her colleagues, STARTplanner founder Kristy Dickerson encountered both gender stereotypes and lack of a mentor support network. “I love what I do in becoming an expert on productivity. Apart from devoting time, energy and resources to achieve my professional goals, I still have a personal life," says the mom of three boys. "This balance enables me to create intentional moments both inside and outside the office.”
Creating a new framework for success.
Nearly half of women entrepreneurs included in the Kauffman report's sample cited lack of available mentors as a challenge to grow their ventures. To create the necessary shift in both policy and culture, the study's researchers recommend that policy makers advance a number of complex initiatives. These include:
- Family-focused policies to achieve work-life balance;
- Parental leave for fathers to recognize a more even division of childcare responsibilities;
- Restructured work expectations to increase productivity levels;
- Mentoring and counseling programs to help improve entrepreneurs' personal and professional lives; and
- Celebrations of women entrepreneurship to inspire others to makes their business dreams a reality.
All the data and expert opinions move in the same direction. They urge us to think about the impact that women-owned businesses make on a macro scale. These companies provide security not only to an individual leader and her employees but also for an extended network of families, communities and our economy as a whole.