Back in July, the US Census Bureau published preliminary estimates of the number and overall growth of women-owned enterprises as of 2007 at a national level. At that time, we learned that:
- There are 7.8 million majority women-owned firms in the US, accounting for 29% of all businesses in the country,
- These enterprises employ 7.6 million workers, contributing 6% of the jobs in the country, and
- These firms generate $1.2 trillion in revenues, accounting for 4% of all business receipts nationally.
Just yesterday, however, the Census Bureau released the final numbers, along with more detailed figures at the state and local level, as well as by industry and size level of the firm. What does this new information show? While there is still a lot of data for Womenable and other womenablers to sift through (and sift we shall), we thought that all of you would be interested in our key first impressions and take-aways from this recent announcement. We have three initial impressions to share with you.
FIRST, women-owned firms are still growing – but that growth lies in partnership. As of 2007, as noted above, the number of majority women-owned firms stands at 7.8 million, accounting for 29% of all businesses. That number represents a 20% increase since the 2002 census, about equal to the 18% seen among all firms. However, lest you think that is a retreat from the “women-owned firms are growing at twice the national average” mantra of the past decade, the Census has improved the way it is tallying equally-owned firms. Those firms grew in number from 2.7 million to 4.6 million, a 71% increase. So, if one were to look at “women- and equally-owned” firm growth over the past five years (which I personally do not like to do, as it becomes synonymous with “women-owned firms” and thus confuses the statistical picture and international comparisons), growth among that population stands at 35%, which is nearly twice the 18% national rate. There is also hidden women-led firm growth in the “unclassifiable by gender” category – which grew in number by 63% over the past five years. While these firms represent only 3% of US firms, they account for 64% of revenues and 52% of all employment. It is in this area that we need more research and dissection – to parse out and tally the impact of plurality women-owned firms (which we like to think of as women-led – and which would include women-founded firms with equity partners or venture capital investments) and women-led social enterprises (which are of increasing interest but have not yet been looked at separately in Census data).
SECOND, we now can see where women-owned firms are faring best in terms of industry and geography. From a geographic perspective, taking a look at what states are host to the greatest share of women-owned firms, we can see that the share of women-owned firms by state ranges from a low of 22.1% in South Dakota to a high of 34.5% in the District of Columbia. There are three states in which the share of women-owned firms is 31% or greater: Maryland (32.6%), New Mexico (31.7%), and Hawaii (31%). It seems that it pays to be close to the Nation’s Capital – confirmation, perhaps, of the importance of the implementation of the Women-Owned Small Business Procurement Program by the US Small Business Administration, which will be unveiled next February.
In terms of industry, the publication of the 2007 census now allows, for the first time, a multi-year analysis of growth by gender and industry using the new North American Industry Classification System (NAICS codes). Implemented for the first time in the 2002 Census (preventing us, unfortunately, from taking a longer view of growth by industry), we can now see what the “hot industries” for women-owned firms are, and they are:
- Administrative services (think personnel/temp agencies, travel agencies, investigative services, janitorial or landscaping services, and trade show organizers): this sector represents 10% of women-owned firms and has grown (in number of firms) by 38% over the past five years,
- Educational services (including business/secretarial and computer training providers, language schools, and exam preparation/tutoring), which is home to 4% of all women-owned firms, growing in number by 44% since 2002,
- Arts/Entertainment/Recreation Services (including performing arts agents, companies and artists, golf courses, marinas and ski facilities, and amusement parks): 5% of women-owned firms, up 30% over the past five years, and
- Construction firms, representing 3% of all women-owned businesses, an increase of 33% since 2002.
THIRD, and perhaps most importantly, women-owned firms have not gained ANY significant economic ground over the past five years. (It should be noted that these data do not include our most recent recessionary period.) In 2002, 2% of all women-owned firms employed 50 or more workers. That share is unchanged today. And, while the total number of million-dollar women-owned firms has grown by 21% over the past five years (from 117,069 to 141,893), compared to a 9% increase among men-owned firms – these firms still only comprise a 2% share of women-owned firms, unchanged from the share seen in the 2002 Census. Perhaps most importantly, when compared to men-owned firms, women-owned firms still lag behind: 4% of men-owned firms employ 50 or more workers, and 6% generate $1 million or more in revenue. While we take exception to the gloom-and-doom interpretation of the US Women’s Chamber of Commerce report, Women’s Businesses Struggle for Market Share (we have not lost “market share” but neither have we gained any), we strongly feel that what is needed – by public policy makers, women’s business organizations, educators and other stakeholders – is a concerted and better coordinated effort to get women business owners to set their growth goals higher. In the US (unlike in many other countries), getting women to start businesses is not the challenge; it is getting women business owners to “think bigger” and to grow their firms to the next level. These new data confirm what Womenable has known for quite some time – that the “sweet spot” for women’s enterprise development in the next decade or more will be the “missing middle.” That is why organizations like WEConnect International, Count Me In’s Make Mine a Million $ Business initiative, and WIPP’s Give Me 5% program are so critically important.
If you’re curious to learn more about the new Census data, you might want to visit these links:
- The Census Bureau’s news release highlighting key statistics, in English and in Spanish,
- The web page containing links to key tables and charts pertaining to women-owned businesses, and
- The American Fact Finder summary page of key web-based data tables from the Survey of Business Owners (SBO).
Finally, mark your womenabling calendars for June 2011 – that’s when the Census Bureau will release their summary SBO data, which will contain information on the number and economic contributions of firms owned by women of color. We’ll be waiting for that important news, and will share the results when they are available.