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The Role of Women Business Ownership in the U.S. Economy A Presentation to OWBO Conference Ying Lowrey, Ph.D. September 19, 2011.

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Presentation on theme: "The Role of Women Business Ownership in the U.S. Economy A Presentation to OWBO Conference Ying Lowrey, Ph.D. September 19, 2011."— Presentation transcript:

1 The Role of Women Business Ownership in the U.S. Economy A Presentation to OWBO Conference Ying Lowrey, Ph.D. September 19, 2011 at the Washington Plaza Hotel

2 Outline Supporting small business including women-owned business was mandated by Congress Pervasiveness of business ownership is the key to improving peoples economic wellbeing Business creation is job creation Economic growth did not increase the median household income Income disparity between large vs. small businesses is the reason for the erosion of business ownership

3 Small Business Act Promulgated in July 1953 The essence of the American economic system of private enterprise is free competition. The preservation and expansion of such competition is basic not only to the economic well-being but to the security of this Nation. Such security and well-being cannot be realized unless the actual and potential capacity of small business is encouraged and developed.

4 Women's Business Ownership Act Established in 1988 Women owned business has become a major contributor to the American economy by providing goods and services, revenues, and jobs. Over the past two decades there have been substantial gains in the social and economic status of women as they have sought economic equality and independence. Despite such progress, women, as a group, are subjected to discrimination in entrepreneurial endeavors due to their gender. It is in the national interest to expeditiously remove discriminatory barriers to the creation and development of small business concerns owned and controlled by women.

5 Owning a Business Doubles (or 8 Times) the Probability of Being High Income (or High Net Wealth) Household 19982007 CharacteristicsN High Income High Wealth N High Income High Wealth All respondents4,3050.2630.0334,4180.3100.060 No business ownership3,0280.2300.0173,0010.2630.030 Any business ownership1,2770.4860.1441,4170.6050.254 Small business1,0980.4760.1341,1830.5890.237 Single business only6820.4710.0937210.5500.167 Multiple businesses4160.4970.3014620.7630.550

6 Business Density (Business Number per 1,000 People) and Median Household Income, by Race/Ethnicity Race/Ethnicity 20022007 Business Density Median Household Income Business Density Median Household Income All People 80$43,52790$52,163 Non-Hispanic White Non-Hispanic White86$47,957101$57,030 African American African American33$29,98752$35,219 Hispanic Hispanic40$33,91350$40,165 Asian Asian95$55,089118$68,643


8 WBD has stronger explanatory power for median household income, 1997, 2002, and 2007

9 Business Creation is Job Creation Business Creation is Job Creation Nearly 6 million jobs created by new startups in 2007; over 34% created by women-owned firms; 10% were employment jobs and 90% were entrepreneurial jobs. Numbers from 2007 SBO Data Nonemployer Firms Employer Firms 2007 Total Job Creation Total Firms 21,357,3465,735,562 5,879,260 Startup Firms 2,776,455189,274586,551 Startup Entrepreneurs 3,859,272433,4364,292,709 Women-Owned Firms 6,882,603910,761 2,012,276 Women Startup Firms 1,073,68638,25245,121 Women Startup Entrepreneurs 1,814,529152,6251,967,155

10 Business Density Has Expanded Since 1997 for All Businesses and Women- Owned Businesses Year BD WBD 1997 76 20 2002 80 23 2007 90 26

11 Ten States had Negative Growth Rate of Real Median Household Income for 1997-2007 Despite High GSP Growth Code of region- state State name Growth rate of real HH-income (1997-2007) Growth rate of real GSP (1997-2007) Poverty rate in 2007 (%) Publicly held BD (2002) U.S.National Average 5.420.213.3 17.2 5-MIMichigan-1.122.813.7 18.0 5-ILIllinois-1.318.312.1 19.9 3-DEDelaware-1.525.710.6 54.7 2-NJNew Jersey-2.217.3 8.7 21.9 7-MOMissouri-2.325.113.4 21.3 8-UTUtah-2.828.410.3 25.8 6-LALouisiana-3.619.519.3 19.0 5-INIndiana-5.327.912.5 18.2 4-NCNorth Carolina-5.738.414.8 18.6 4-KYKentucky-8.412.817.1 18.0

12 Both number and receipts of publicly-held firms consistently increased since 1997; the receipt of privately-owned firms consistently decreased

13 Number of U.S. firms and business receipts, 2007: 3% of total firms were publicly-held but had 64% of total U.S. business receipts

14 Some of My Reports on Gender September 2011 – Gender Issues: Privately Owned and Publicly Held U.S. Firms August 2010 – Gender and Establishment Dynamics, 2002-2006 August 2006 – Women in Business: A Demographic Review of Womens Business Ownership September 2005 – U.S. Sole Proprietorships: A Gender Comparison, 1985-2000

15 Conclusions Owning a business doubles the probability of being high income household (or 8 times high net wealth household) States with high business density tend to have higher household income and lower poverty rate Women Business Density has stronger explanatory power than total BD for medium household income In 2007, women-owned startups created 34% of total 6 million new jobs, of which, 10% were employment jobs and 90% were entrepreneurial jobs Ten states had negative growth rate of real median household income for 1997-2007 despite high GSP growth

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