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!
Female entrepreneurs are outperforming their male colleagues in job creation internationally. So says a new study just published by EY. The results, based on a survey conducted among 2,673 business owners in 12 economies, are shared in a summary of the EY Global Job Creation survey 2016, entitled “Does disruption drive job creation?”
While secondary to the main findings of the report, which are that more entrepreneurs today (59%), compared to one year ago (47%), are planning to increase hiring, and that companies that are more innovative and/or more disruptive are even more bullish on growth, the survey found that:
the women entrepreneurs surveyed expect to increase the size of their workforces by 10.9%, a rate that is 31% higher than that of the men surveyed,
women were 10% more likely (43% versus 39%) to say they added more jobs last year than they anticipated, and
the women surveyed were actually 24% more likely than the men surveyed (6.2% compared to 5%) to be running $1B+ enterprises.
Fully 40% of those surveyed were women, 30% of respondents have been in business less than five years, and 30% are under 35. For all that, 43% employ more than 250 workers. A fascinating pool of entrepreneurs, and very interesting findings that bode well for the global economy.
Read the EY news post HERE to learn more about the study, and to download the free 20-page report.
The recent publication of the 2016 State of Women-Owned Businesses report is chock-full of interesting trends and statistics, some of which we’ve covered here in recent blogposts. This time, the focus is industry diversity – and, while women-owned businesses are found in every industry and the longer-term trend is increasing diversification, over the most recent post-recessionary time period (2007-2016) the greatest growth we’re seeing is in some of the most traditional, foundational sectors for women.
To wit, between 2007 and 2016, when the number of all women-owned businesses increased by 45%, the following four industries grew much more substantially:
Women-owned firms in the Other Services sector (hair and nail salons, pet sitting services) nearly doubled in number (up 98%);
Administrative, Support and Waste Management Services (including janitorial and landscaping services and travel agencies) are up 64%;
Accommodation and Food Services businesses increased by 62%; and
Women-owned Construction firms increased in number by 56%.
Two of these sectors are – and have been – among the most popular sectors for women in business:
There are currently 2.5 million women-owned firms in Other Services, accounting for 22% of all women-owned firms;
Health Care and Social Assistance (including child day care and home health care services) women-owned firms number 1.7 million and comprise 15% of the women-owned firm population;
Women-owned Professional/Scientific/Technical Services firms (including lawyers, accountants, architects, public relations firms and management consultants)number 1.4 million, comprise 13%; and
The Administrative, Support and Waste Management Services (including janitorial and landscaping services as well as office administrative support and travel agencies) sector is home to 1.3 million women-owned firms, comprising 11% of the women-owned firm population.
It is worth noting that a significant share of the growth in these sectors is accounted for by women of color. Overall, the report notes that 44% of women-owned firms are now minority-owned, and that nearly eight out of 10 (79%) of net new women-owned firms launched since 2007 was started by a woman of color. A significant number of these women are starting firms in traditionally female sectors. For example, while 22% of all women-owned firms are in Other Services (a large share of which are hair or nail salons), fully 36% of African American women-owned firms and 33% of Asian American women-owned firms are in this sector. In addition, while 11% of all women-owned firms are found in Administrative Services (janitorial and landscaping), 21% of Latina-owned firms are found in this sector.
So, despite more and more women launching a growing variety of businesses, certain types of traditional lines of business remain very popular – more so for many women of color.
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!