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U.S. Female Ownership of Businesses Is Increasing

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As a positive development for the American feminist movement and for America as a whole, recent reports show that women are owning more and more small businesses. Additionally, women have increasingly earned executive-level positions in the business industry, including as CEOs and as members on boards of directors.

The Institute of Women’s Policy Research (IWPR) reports that 29 percent of America’s small businesses are women-owned – a three percent increase from 1997. The organization also found that the number of women-owned businesses has grown 68 percent since 2007. [1] Additionally, women now make up 5 percent of the nation’s Fortune 500 CEOs and comprise 17 percent of corporate board members among Fortune 500 companies. [2] According to American Express, there were over eight million women-owned businesses in the United States in 2012, a 54 percent increase over the previous 15 years. [3]

Women are even taking a larger role in government as well. On the federal level, there are seven women holding cabinet-level positions in President Barack Obama’s administration, three women on the U.S. Supreme Court, and 104 women in Congress. Women also serve in countless state government offices as well. [4]

The Growing Power of Women in Business

The increase in female ownership of small businesses and firms grants women a level of power beyond just ownership. Women have been integral parts of the American workforce since it began shifting from being manufacturing-centered to service-centered. Several key pieces of legislation, including the Equal Pay Act of 1963 and the Civil Rights Act of 1964, have also contributed to the rise of women in the workforce and as entrepreneurs and business owners in the nation.

• Women-owned businesses employ over seven million employees.
• Women-owned businesses generate over $1 trillion in annual revenue.
• Female consumers control 85 percent of all purchase decisions and are responsible for $7 trillion in annual spending.
• 45 percent of American millionaires are women. [5]
• Women represent 40 percent of Americans with investable assets totaling over $600,000.
• 126 million women globally are operating a new business. Another 98 million women around the world are leaders of established businesses. [6]
• Fortune 500 companies with the highest percentages of women board of directors outperformed those with the least in categories such as return on investment, sales and return on equity by at least 42 percent. [7]

Female Workplace Equality Will Boost Global Economy

It only stands to reason that the more individuals who have the ability to own and run their own businesses, the better off the world’s economy will be. This is because people who own businesses generate and spend money, which creates more jobs so their employees can also contribute to the economy.

In emerging markets, women reinvest 90 percent of their earnings

A 2009 article in The Economist showed that increasing women’s participation in the workforce to match that of their male counterparts would lead to a GDP increase of 21 percent in Italy, 19 percent in Spain, 16 percent in Japan, and 9 percent in America, Germany, and France. More people working means more goods produced and services offered, which would naturally lead to an increase in GDP.

In emerging markets, women reinvest 90 percent of their earnings into their families and communities; meaning that an investment in women, is an investment in the future. [8] It would be wise for the U.S. and nations around the world to ensure that women not only have equal opportunities in the workforce but also in education. A study using data from 219 countries from 1970 to 2009 found that for every additional year of education women of reproductive age received, child mortality rates decreased by 9.5 percent.

Still Much Work to Be Done

Despite all the positive trends and developments for women in business and the workforce, the fact remains that there is still a ways to go before full equality is achieved. There may be an increase in female business leaders across America and around the world, but many reports show that women still largely remain in support roles.

A 2014 Credit Suisse study showed that women comprised 12.7 percent of global board appointments by the end of 2013, up from 9.6 percent in 2010. Additionally, female representation in senior management has grown to 12.9 percent. While these seem to be positive numbers, Credit Suisse reports that many of these positions are in public relations, legal and other support roles – as opposed to operational jobs. [9]

“Women are more represented in management areas that carry less influence and have less direct (profit & loss) P&L responsibilities. There’s no question about it; the chances of anybody going from an operations role to CEO are much higher than from a shared services role to CEO,” said Stefano Natella, global head of equity research for Credit Suisse, in a Fortune magazine article. [10]

Part of the problem, according to the organization, is the different educational paths women and men often take. Women across the world graduate from college in greater numbers than men; but women often study disciplines that are more support-oriented. In 2011, 41,000 U.S. males graduated from college with math or computer science degrees, compared to 14,000 for women. In the U.K. during the same year, 17,000 men graduated with engineering degrees, compared to 3,300 women.

Here are some more numbers to highlight the need for more progress:

• In the legal field, women account for 45 percent of associates and just 17 percent of equity partners.
• In medicine, women make up 35.5 percent of all physicians and surgeons, but only 16 percent of medical school deans.
• In academia, they account for 30 percent of full-tenured professors and 26 percent of college presidents.
• At nine major Silicon Valley companies, females represented a low of 10 percent of the workforce at Twitter and a high of 27 percent at Intuit.[11]

The Credit Suisse report indicated that part of the problem is parents perpetuating and imposing societal gender stereotypes. The New York Times points to a stalling of the women’s movement in the mid-90’s. [12] Regardless of the why or the how, it’s important for men, women, world leaders and business leaders to realize that while women have made great strides in the workplace, the journey is not yet complete.

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MPA is able and eager to help your business achieve its advertising goals and exceed customer expectations for brand building and management using comprehensive multi-media campaigns. Though we’re certified by New Jersey and the Women’s Business Enterprise National Council (WBENC) as a woman-owned adverting agency, our extensive resources and capabilities have helped us provide award-winning service to a global customer base. Contact us today at 732-214-9600 to get started.