Although the United States and other developed countries have made great strides on the question of equal rights for men and women, few would argue that the picture is perfect. Due to a legacy of discrimination and deep-seated structural issues inherent in Western society, women remain at an economic disadvantage relative to men. Unsurprisingly, most businesses remain majority or wholly owned by men.
That said, recent trends in women-owned businesses have been encouraging. As barriers to entry continue to fall, more ambitious women are taking these keys to success for female entrepreneurs to heart and making their own way in the world. Here are five trends that suggest a bright future for female business owners.
1. Women-owned businesses are driving overall business growth
According to a recent report by WomenAble and American Express OPEN, female-owned businesses represent “the sole bright spot” in job growth since the recession of the late 2000s. The report found that female entrepreneurs added nearly 250,000 jobs at privately held businesses between 2007 and 2014, a period when total employment at privately held businesses actually fell. Equally encouraging is the rate of female-driven new business formation: The number of female-owned businesses increased by 68 percent between 1997 and 2014, 1.5 times the rate of total new business growth during that period.
2. Female business owners directly employ 8 million people
Per the WomenAble/OPEN report, female business owners directly employ at least 8 million people as of late 2014. While that’s a small fraction of the total U.S. workforce, it does account for nearly $1.5 trillion in total economic activity. Put another way, businesses wholly owned by females account for about $1 out of every $10 of the U.S. GDP. That’s a lot of dollars — and a lot of livelihoods.
3. Shared ownership is a critical part of the story
These days, many businesses are structured as partnerships, particularly on the smaller end of the business-size spectrum. This arrangement is more flexible and less capital intensive; it also allows partners with different strengths to focus on different aspects of a business, creating a well-oiled organization that’s greater than the sum of its parts. These days, according to WomenAble/OPEN mixed-sex partnerships account for nearly $1.5 trillion in further economic activity — stretching the total GDP value of businesses partially or wholly owned by females to about $3 trillion.
4. Women-owned businesses remain smaller than male-owned businesses
Now for some sobering news: On average, women-owned businesses remain far smaller than publicly traded companies as well as privately held firms owned by men. Per WomenAble/OPEN, women-owned businesses account for 31 percent of all existing firms in the United States, but only 14 percent of total employment and 11 percent of total revenues. In other words, female-owned businesses tend to employ fewer people and take in less revenue.
5. The South leads the way in numeric growth
Though female-owned businesses are thriving in every corner of the country, growth in a handful of Southern states has been particularly impressive. As of late 2014, Georgia is the best state for female-owned business growth, followed by Texas, North Carolina, Nevada, and Mississippi.