The Rising Economic Growth of Women-Owned Businesses
The State of Women-owned Businesses Around the World
Each year in March, International Women’s Day marks a designated time to celebrate the social, economic, cultural, and political achievements of women everywhere. Among those celebrated are women entrepreneurs and small business owners.
“All around the world, women are starting and growing enterprises, often juggling work and family commitments, and facing a range of legal, regulatory, societal and financial impediments,” writes Cecile Fruman, director of Regional Integration and Engagement in South Asia, in a World Bank blog.
International Women's Day has occurred for more than a century, with the first gathering held in 1911, according to the IWD website. In addition to celebrating women's achievements, the IWD aims every March 8 to raise awareness about women's equality, lobby for accelerated gender parity and fundraise for female-focused charities.
“IWD sees a number of missions to help forge a gender equal world,” the IWD says. “Celebrating women's achievements and increasing visibility, while calling out inequality, is key.”
Women Business Stats
Worldwide, 6.2 percent of women owned established businesses, compared to 9.5 percent of men. Globally, younger women (ages 25-44) had the highest entrepreneurial participation rates, says a post by the business mentoring organization SCORE.
Globally, 1 in 3 businesses are owned by women, says a World Bank blog by Daniel Halim, an applied microeconomist in the World Bank Gender Group. This rate varies across and within regions, from a low of 18 percent in South Asia to a high of 50 percent in Latin America & Caribbean, the blog says.
“Female participation in business ownership is positively correlated with countries’ income level, but only to a small extent,” Halim writes. “In low-income countries, only 1 in 4 businesses have any female owners. In middle- and high-income countries, the rates are at 36 percent and 37 percent, respectively.”
In the U.S., the National Association of Women Business Owners, or NAWBO, says more than 11.6 million firms are owned by women, employing nearly 9 million people, and generating $1.7 trillion in sales as of 2017. Women-owned firms (51% or more) account for 39% of all privately held firms and contribute 8% of employment and 4.2% of revenues.
The year-long pandemic has shone the light on many of the inequities across society, including the unlevel playing field for women small business owners when it comes to funding opportunities.
Female entrepreneurs told a study for the 2019 Bank of America Women Business Owner Spotlight that their biggest concern is access to capital, which echoes findings from other research.
Further, a research report by Jessica Looze and Sameeksha Desai for the Kauffman Foundation points to statistics indicating the unequal burden that’s been placed on women across sectors during the pandemic, including women business owners and entrepreneurs.
By October 2020, the report said, mothers between the ages of 24 and 39 were nearly three times more likely than fathers in the same age range to report being unable to work during COVID-19 due to a school or childcare closure.
Further, some mothers may leave wage or salary work and turn to necessity-driven entrepreneurship to avoid completely disconnecting from the labor force, write Looze and Desai.
“Among entrepreneur mothers, 1 in 4 reported being the sole provider in their household prior to the pandemic,” the report says, with 27 percent of Black entrepreneur mothers reporting being sole providers, compared to 19 percent of Hispanic entrepreneur mothers and 23 percent of white entrepreneur mothers.
The Power of Women Entrepreneurs
An earlier report by the Kauffman Foundation emphasized the economic power, and potential, of women entrepreneurs and their businesses.
Accelerating female entrepreneurship could have the same positive effect on the U.S. economy that the large-scale entry of women into the labor force had during the 20th century, according to “Sources of Economic Hope: Women’s Entrepreneurship.”
“Female entrepreneurs have untapped economic potential, and policymakers and relevant organizations need to empower them to pursue high-growth opportunities,” writes the report’s author, Alicia Robb, a senior fellow at the Kauffman Foundation.