Oct. 7 (Bloomberg) -- Private businesses owned by women have grown in number and hired more workers than male-owned businesses, according to the latest U.S. Department of Commerce survey to track such data. The report also found such firms lag behind male-owned businesses in financial capital, revenue and salaries.
The number of companies owned by women grew by 44 percent to 7.8 million from 1977 to 2007, compared with a 22 percent increase in firms owned by men, the Commerce Department report found. Male-owned firms in 2007 totaled 13.9 million.
“Women-Owned Businesses in the 21st Century,” also found women in business added 500,000 workers to their payrolls while firms owned by men shed almost 2 million jobs during the period. As of 2007, the latest year that full U.S. Census Bureau data was available, women-owned businesses employed 7.6 million workers, according to the report released Oct. 4.
“The good news is that women-owned businesses have actually been growing over the last decade and actually growing faster than men-owned private businesses,” Rebecca Blank, Commerce’s undersecretary for economic affairs, said in a phone interview. “There’s clearly a sense here, if you look into the future, of an enormous growth opportunity for women-owned businesses in the private sector.”
Blank also pointed to challenges in the data. Businesses owned by women are “likely to be smaller, more likely to fail, and different from businesses owned by men along a variety of measures,” the report said. Those firms have lower levels of financial capital, use less outsider debt, generate less revenue and pay their workers smaller salaries.
Women Lag Behind
“In virtually every dimension, women-owned businesses lag far behind men-owned businesses,” Blank said.
The expansion of women-owned businesses from 1997 to 2007 followed a general shift in the U.S. job market. Health care and education-related jobs expanded while manufacturing and construction employment shrank, according to the report.
Blank said women entrepreneurs have concentrated in health and education - and they benefitted as those areas grew even during the recession. Data beyond 2007, when it becomes available, may reflect stronger growth in women-owned businesses, Blank said.
The more female entrepreneurs there are, the more other women will say, “‘Yes, I can jump in and do something like this too,’” Blank said.
The report is based on Census Bureau’s business and population data and information from the Kauffman Firm Survey, which tracks about 5,000 businesses founded in 2004 and examines the nature, strategy and employment patterns of new businesses.
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