Women-Owned Businesses: The Missing Ingredient for Job Creation
Today, Wednesday, December 15, 2010, our president will convene 20 business leaders for a CEO Summit at the White House. Just last month, we heard from a similar group, the Wall Street Journal’s CEO Council on how best to move forward to revive the sluggish U.S. economy.
Even though Mr. Obama’s primary goal is job creation, by all indications, the topics and the conversations at the White House today will miss a key strategy—also overlooked by the WSJ CEO Council—and the missing ingredient that could result in real job creation in the United States.
As is typical for most business forums, the vast majority of the participants in the WSJ CEO Council and the CEO Summit at the White House are white males.
So, it is not surprising that the discussion and strategies proposed by these leaders did not include the critical role of working women and women-owned businesses to improving our U.S. economy. If our strategies and tactics do not originate from diverse perspectives and only give voice to less than half of our nation’s population, the very most for which we can hope is a lopsided and incomplete economic recovery.
According to the Kauffman Foundation, the world’s largest foundation devoted to entrepreneurship, the only net new jobs created in the past 10 years have come from small businesses. It is women-led businesses that are growing in number at nearly twice the national average, and women who launch nearly half of all start-ups in the United States. Women-owned firms now comprise nearly one in three majority-owned, privately held businesses in America. It is estimated that there are 7.2 million majority women-owned businesses in the United States, employing 7.3 million workers and generating $1.1 trillion in revenues.
When we gather leadership to reflect on how best to beat back our sluggish economy, the voices of women cannot be absent the conversation. The majority of the U.S. population is comprised of women, and according to the Department of Commerce, the number of women-owned businesses increased 44 percent from 1977 to 2007, adding 500,000 jobs. Meanwhile, the number of men-owned businesses increased just 22 percent, losing 2 million jobs.
When we work to create sustainable jobs in the United States, the focus on women-owned businesses cannot be omitted. Today, only about 14 percent of the majority women-owned firms currently are employer firms. If we scale many of these women-owned firms into businesses that provide employment, we can make a considerable impact on job creation and economic growth.
By focusing on women-owned businesses that have potential for growth, commonly referred to as the “Missing Middle,” we have the potential to create millions of jobs, and add trillions of dollars to America’s economy. Our public policy needs to address the barriers to growth for these women-owned businesses. We can do much to provide training and sponsors to help women-led businesses get to the next level through increased access to new markets and contracts, as well as to funding and capital resources.
To be sure, when you always do what you have always done, and when you always rely on the same voices to plan for future innovation that you have relied on in the past, you will get what you have always gotten. It is time to bring women’s voices to the table to promote growth and solve the economic problems of today in order to create a better tomorrow.