One of lingering negative aftereffects of the 2007-2009 recession has been sluggish business start-up rates – except, of course, among women-owned businesses. (See our 2015 and 2016 State of Women-Owned Businesses reports, underwritten by American Express OPEN.) Now, a recent analysis from the Kauffman Foundation has found that start-up rates are picking up again, and are continuing to be led by women-owned firms.
The 2016 Kauffman Index of Startup Activity, published last month, finds that:
The Startup Activity Index, a key annual indicator of new business creation, rose to 0.38 in 2015 – going up for the second year in a row – a mere two years after plunging to its lowest level (0.28) in two decades. (An index of 0.38 means that 380 out of 100,000 every adults started a business each month during 2015.)
A growing share of new firms are being started by people of color: with 40 percent of new entrepreneurs being comprised of African American, Latino, Asian, or other non-white entrepreneurs in the 2016 Index.
Of greatest note to womenablers, the rate of women entrepreneurs saw the biggest increase in almost twenty years—increasing from 0.22 percent to 0.26 percent (meaning 260 out of every 100,000 females become an entrepreneur each month). Approximately four in 10 (41%) new entrepreneurs, according to the Index, are now female.
Download the report and learn more at the link highlighted above. A new microsite also provides the ability to look at startup activity on a state-by-state and metro area-level basis.
In other positive women’s entrepreneurship news, the Census Bureau’s inaugural Annual Survey of Entrepreneurs, which will publish insights on employer firms over the next three years thanks to support from the Kauffman Foundation, was just released. Look for highlights from that survey in our next post.
A new accounting of the most supportive cities for growth-oriented women entrepreneurs was recently released at the Global Entrepreneurship Summit, just ahead of the Dell Women’s Entrepreneur Network conference in Johannesburg, South Africa. The WE Cities Index lists the 25 cities globally that provide the most supportive capital, technology, talent, culture and markets for growth-oriented women, a population they refer to as “high potential women entrepreneurs.” Those cities are:
New York City
the San Francisco Bay Area
For an interactive look at how each of these cities ranks in the five major index areas, visit this web page.
The WE Cities Index follows on the heels of the Global Women Entrepreneurs Scorecard, which was released the prior year. That effort analyzed 21 variables in a five-element framework, and ranked 31 countries around the globe for their supportive policies and programs to help women scale their enterprises. The findings of the country-focused effort (which was supported in part from Womenable) were highlighted in this Womenable blogpost from 2015.
Tops on that list were the United States, Canada, Australia, Sweden, and the United Kingdom — home to nine of the 25 top-ranked global cities for women entrepreneurs who are shooting for the stars. Godspeed on your journey, ladies!
As noted in the recent 2016 State of Women-Owned Businesses Report – and in our previous blogpost – women-owned firms are continuing to grow in number and economic clout at rates well above the national average. But where, geographically speaking, are women-owned firms growing? The short answer is: everywhere!
When looking at the growth in the number of women-owned firms as well as growth in revenue and employment (which we call, collectively, growth in economic clout), the 10 fastest-growing states for women-owned firms between 2007 and 2016 are:
North Dakota, South Dakota, Texas (all three tied for first)
Indiana, Wyoming (tied for 5th)
Georgia, Tennessee (tied for 7th)
These are states in the Northeast, Midwest, South and West.
A look at the top-ranked metropolitan areas for growth in the economic clout of women-owned between 2007 and 2016 paints a slightly different picture. All of the top ten metro areas (listed below) are found east of the Mississippi River – or in Texas! However, most of the 50 most populous metropolitan areas in the country are either east of or on the banks of the Mississippi River.
San Antonio TX
Comparing heat maps of the top states and top metro areas for growth in economic clout since 2007 finds that some of the fastest-growing states are those without large cities (such as North and South Dakota, Iowa and Wyoming) and some of the fastest-growing cities (Charlotte, Miami, Detroit) are growing faster than the rest of their states.
This geographic analysis also tells us that things are definitely hopping in Texas – the top-ranked state home to four of the top 10 metro areas. Perhaps everything really is bigger in Texas!
For the sixth year running, Womenable and American Express OPEN have taken a look at the state of women-owned businesses across the U.S., this year focusing on trends that have taken place between 2007 and 2016. The latest numbers – which can be found in The 2016 State of Women-Owned Businesses Report and the companion Summary Tables document – are remarkable in a number of ways.
First, here are the latest back-of-the-envelope numbers for you to write down and keep handy for speeches and cocktail conversation:
There are now 11.3 million women-owned businesses in the U.S., employing nearly 9 million people and generating over $1.6 trillion in revenues;
Women-owned businesses now comprise 38% of the business population, employ 8% of the country’s private sector workforce and contribute 4% of the nation’s business revenues; and
Since 2007, there have been 1,072 net new women-owned firms launched each and every day.
What are the most remarkable positive trends we’re seeing in this report? Here are three:
Between 2007 and 2016, while the total number of firms increased by 9%, the number of women-owned firms increased by 45% – meaning that over this period the number of women-owned firms grew at a rate fully five times the national average;
Who are entering the ranks of women business owners at a fast clip? Women of color; their numbers have more than doubled since 2007, to nearly 5 million. They comprise fully 44% of all women-owned firms; and
The 10 fastest-growing states for women-owned firms since 2007 in terms of economic clout (a combination of growth in number, employment and revenue) are found in every region. They are:
North Dakota, South Dakota, Texas (all tied for first);
Indiana and Wyoming (tied for 5th);
Georgia and Tennessee (tied for 7th);
And, on the flip side, what findings bear further scrutiny, as they may indicate a lack of advancement? Again, we’ll highlight a trio:
While the share of women-owned firms keeps climbing – from 28% in 2002 to 38% today – their share of employment (8%) and revenues (4%) remains essentially unchanged;
Although the number of minority women-owned businesses has increased at a rate nearly three times that of all women-owned firms since 2006 (127% versus 45%), their average annual revenues are less than half that of the average women-owned firm (just under $69,000 per annum compared to $143,000); and
Despite broadening industry diversity over the past two decades, since the recession the industries with the greatest share of new women-owned firms are in some of the most historically traditional sectors for women: other services (which includes hair and nail salons, up 98% compared to 45% overall); administrative, support and waste management services (home to janitorial and landscaping businesses, +64%); and accommodation and food services (+62%).
This is just a taste of the information now available in the 2016 State of Women-Owned Businesses Report. To learn more about the current state of women-owned businesses, download, read, and share the executive report, the news release, or the full set of statistical tables by clicking on these links.
And follow this blog for additional posts on trends uncovered in the report in the coming weeks and months.
By now, many of you will know the overarching facts and trends, including:
Women now own nearly four in ten (36%) businesses in the U.S. These firms number nearly 10 million, employ over 8 million workers, and generate $1.4 trillion in revenues.
Women-owned firms are growing in number at 2-1/2 times the national average over the 2002-2012 period, and business starts among women have picked up significantly since the recession, even as overall firm formation has stagnated.
The number of firms owned by women of color is nothing short of phenomenal. In 2002, there were just under 1 million firms owned by women of color; that number stands at nearly 3.8 million just one decade later.
But what you might not know are three other trends that are included in this report. For the first time, the analysis includes a look at female veteran-owned firms, trends in the top 50 most populous metro areas, and a look at trends in some detailed industry categories. We found that:
There’s been a quadrupling in the number of female veteran-owned businesses just in the past five years, from under 100,000 to nearly 400,000.
Despite growing industry diversity, nearly one-third of women-owned firms can be found in these four sectors:
Personal care services (mostly beauty and nail salons): 987,375 women-owned firms
Other personal services (including pet care/pet sitting/dog walking): 732,352
Child day care services: 661,630
Services to buildings and dwellings (mostly janitorial, housecleaning and landscaping/lawn services): 655,943
Between 2002 and 2012, the number of women-owned firms in Memphis skyrocketed by 160%, compared to national growth of 52%, making the Bluff City the fastest-growing metro area among the 50 most populous cities in the U.S.