The entrepreneurs featured in this issue of Maine Women are the new engines driving job creation and community economic development in Maine. They are also at the leading edge of a national movement.
Lesa Mitchell, vice president of innovation at the Kauffman Foundation, the world’s largest foundation devoted to entrepreneurship, points out that the next 10 years are being called the “Decade of the Woman Entrepreneur.”
Women have been surpassing men in business startups for the last 20 years, and according to a report from American Express OPEN Forum, in the past five years the number of women-owned firms increased by 54 percent nationwide. Moreover, even though women tend to create micro (less than five employees) and small businesses, women will create more than half of the 9.72 million new small business jobs expected by 2018.
Mitchell goes on to say, “Job creation is only one measure of economic vitality, but it is a crucial one. Jobs provide revenue for a living, and when there are not enough of them, as in recent years, the society and economy take multiple hits. The unemployed suffer. Demand for social-welfare payments goes up, putting an added strain on public budgets, while demand for goods and services in the marketplace goes down, putting a damper on growth.
“Conversely, when jobs are being created at a strong rate, these dynamics are reversed and we get an upward spiral. If women have better access to the capital they need, they’ll create a lot more jobs and the economy could be humming,” she said.
Interesting data released by the National Federation of Independent Business about how women entrepreneurs fared during the recession notes some basic survival techniques that have given women the edge:
“Though nearly half of women-owned businesses still haven’t been able to climb back to pre-recession sales, they are persevering because they are controlling costs. There was, for example, a 52 percent increase in the number of women entrepreneurs using social media to boost business to significantly reduce their marketing costs.”
“The result,” says William Dennis in the report, “is a new cohort of women-owned businesses, battle-tested and more competitive than the generation that preceded them.”
That being said, starting a business is still harder for women than for men, as explained in a recent Forbes.com article by Susan Coleman and Alicia Robb.
“For instance,” they report, “women seeking first-year financing to get a business off the ground receive about 80 percent less capital than men.”
Help is on the way, however, with a new capitalization tool, crowdfunding. The crowdfunding market could be worth $4.6 billion annually in five years, according to research conducted by Crowdfund Capital Advisors and the University of California, Berkley.
Crowdfunding works especially well for the kinds of small and micro businesses women often launch. Indiegogo is a popular, five-year-old crowdfunding platform, and of its successful campaigns, 42 percent are run by women. Impressively, women raise more than men both in terms of the number of contributions and the amount.
The women’s entrepreneurship movement is also gaining traction in the larger investment arena. Just recently, Arianna Huffington, while attending the 43rd annual meeting of the World Economic Forum, in Davos, Switzerland, said in her Empowering Entrepreneurs and Creating Jobs blog posting, “one of the best investments we can make to spur economic growth is in women entrepreneurs.”
Last but far from least, U.S. Secretary of State Hillary Clinton said at the 2011 Asia Pacific Women and the Economy Summit, “Tto achieve the economic expansion we all seek, we need to unlock a vital source of growth that can power our economies in the decades to come – women.”