It has been a long, slow economic recovery from the Great Recession, but there is an interesting bright spot. During the years 2007-2015, privately held businesses owned by women have added approximately 340,000 jobs. Male-owned or equally owned privately held ventures have seen a net decline over the same eight-year period. That is one fascinating observation in the 2015 State of Women-Owned Businesses Report, produced by American Express OPEN.
Using data from the Census Bureau, the report provides insight into the growth and challenges of women-owned businesses — which, according to the report, now constitute 30% of all enterprises in the U.S. There are an estimated 9.4 million businesses owned by women in the U.S., bringing in almost $1.5 trillion in revenues and providing jobs for 7.9 million workers. That equals one in every seven jobs in privately held firms, and one out of sixteen of all jobs.
Start-up activity has been propelling female-owned businesses forward in recent years. The U.S. averaged 887 net new women-owned businesses per day in the past year, a drop from the previous year's high mark of 1,288 — but considerably more than the 714 daily businesses launched during the 2002-2007 pre-recession period or the 588 daily businesses launched during 1997-2002.
Minority women own a majority of the female-owned start-up businesses. Of the 887 businesses launched in 2014, 484 were minority-owned (55% of the total). The ventures were split among ethnic groups with African-American women starting 223 businesses per day, Latina women averaging 168 start-ups per day, and Asian-American women averaging 105 startups per day. Thanks to the recent increases, minority women own one-third of the female-owned businesses in the U.S.
Female-owned businesses may be found throughout the industry sectors, but the majority of them are located in the health care and social assistance sector. Over half (52.8%) of the businesses in that sector are women-owned, comprising 16.8% of all the women-owned businesses.
Efforts to bring more women into the technical fields appears to be paying off, as 13.3% of women-owned businesses are in the professional, scientific, and technical services sectors (29.2% of the businesses in those sectors).
Another 10.5% of women-owned businesses are located in the administrative, support, and waste-management services (37.4% of the sector). However, the fastest growth by sector since 2002 has been in education services — up 139% since 2002, currently at 4.9% of all women-owned businesses, and comprising 44.9% of the sector.
Where are the best opportunities for women-owned businesses? The greatest growth numbers over the past eighteen years were found in Georgia with a 132% increase, Texas with a 116% increase, North Carolina at a 98% increase, and North Dakota and New York with 89% increases. Alaska showed the slowest growth (14%) followed by West Virginia (26%) and Iowa (27%). When overall economic clout is taken into account, the top ten states are, in order, North Dakota, Wyoming, the District of Columbia, Arizona, Georgia, Nevada, Maryland, Texas, Utah, and Hawaii.
A similar analysis in metropolitan areas yields the ten best cities for women-owned businesses: San Antonio, TX; Portland, OR; Houston, TX; Atlanta, GA; Riverside, CA; Tampa/St. Petersburg, FL; Sacramento, CA; Washington, DC; Dallas, TX; and Seattle, WA.
Overall, women appear to be driving a large part of the economic recovery among privately held businesses. The number and diversity of those businesses, both in sector and in ethnic ownership, is the continuation of a healthy economic trend. Expect that trend to continue and help pull our economy forward through 2015 and beyond.