This article was originally published on City Observatory and is reprinted with permission.
Entrepreneurship is both a key driver of economic activity and an essential path to economic opportunity for millions of Americans. For much of our history, entrepreneurship has been dominated by men. But in recent decades, women have overcome many of the social and other obstacles to entrepreneurship and as a result, the number of women active in starting and growing their own businesses has been increasing.
A new survey, conducted by the Census Bureau, in cooperation with the Ewing Marion Kauffman Foundation, provides a rich source of data about the economic contributions of women-owned businesses. The Annual Survey of Entrepreneurshipis the first iteration of a survey that gathers data which asks detailed questions about key demographic characteristics of business owners, including gender, race and ethnicity, and veteran’s status. And unlike other business data, the entrepreneurship survey reports data by age of business, allowing us to examine separately the economic contributions of newly formed businesses.
The survey focuses on businesses with paid employees, and so generally excludes self-employed individuals working on their own. In 2014, the survey reports that there were more than 5.4 million businesses with a payroll in the United States. Of these, about 270,000 businesses were public corporations (or other business entities for which the gender or other demographic characteristics of owners could not be ascertained). These businesses employed almost 60 million workers (52 percent of total payroll employment). The remaining 5.1 million firms with identifiable owners employed about 55 million workers.
The survey concludes that nearly 1.1 million businesses, or 20.4 percent of those with individually identifiable owners, were owned exclusively by women and employed about 8.5 million workers. About 10.8 percent of these women-owned businesses had started in the past two years, compared to about 8.9 percent of all employer firms. Women-owned businesses are found in all economic sectors, but are disproportionately represented in education, health and social services, where they comprise about 28 percent of all employer businesses.
The report also offers data on business ownership patterns for the 50 largest US metropolitan areas. We thought it would be interesting to see how different areas ranked in terms of the share of all businesses with employment that were owned by women.
Here’s a listing of the number of women-owned businesses, the share of total businesses owned by women for these fifty metropolitan areas.
Among the cities with the highest proportions of women-owned businesses with a payroll are Denver, Atlanta and Baltimore, with nearly 1 in 4 businesses (for which demographic characteristics of owners could be identified) being owned by women. The metropolitan areas with the lowest fraction of women-owned businesses include Salt Lake City, Memphis, and Birmingham, where only about 17-18 percent of businesses are owned by women.
When we map the fraction of women-owned businesses, some geographic patterns become apparent. In general, the proportion of women businesses is higher in Western metropolitan areas, and in many Southern metropolitan areas, particularly in Florida, Texas and Georgia. In the Northeast, Midwest and in much of the South, the share of women-owned businesses tends to be much smaller. Washington and Baltimore appear to be outliers in their geographic region, as do St. Louis and Kansas City. From Philadelphia to Boston, the Northeast corridor has below average shares of women-owned businesses.
In addition to identifying the gender of business owners, the survey also provides insight on other ownership characteristics, including race and ethnicity; we’ll examine some of these findings in a future commentary. The Census plans to conduct its new survey of entrepreneurs on an annual basis. This promises to be a useful was of benchmarking efforts to draw more Americans of every stripe into business ownership.
(All photos from WOCinTech Chat)