Business creation by women and minorities is rising. In fact, half of the new US entrepreneurs are women, and they are leading the creation boom. Sounds interesting? Read on to know more.
Numbers Reveal Everything
A survey has unveiled that about half of new
entrepreneurs in 2021 were women. It was just 18% in 2019. The share of new
Black business owners has also tripled to 9%. Gusto, a payroll, and human
resource management business shared the survey results.
Another research by GoDaddy Inc., a web hosting company, stated
that there was an increase in female entrepreneurship. Many women started their
own businesses out of necessity as they had to face many challenges last year.
An example of those challenges was more child-care responsibilities for women
as schools and child-care centers were disrupted.
Even in the Gusto survey, over a quarter of
female business owners with school-aged children stated that they created their
company to respond to a rise in child-care duties.
According to the Census Bureau, about 5.4 million
new businesses were formed in the US last year. As millions of workers lost
their jobs when the pandemic began, some businesses were born of necessity.
More than one-third of the Black respondents in
the Gusto survey created a business as they wanted to improve their financial
stability. It is a larger share than the Hispanics and White people in the
survey.
The survey also revealed that many workers are
“placing a premium on the flexibility and autonomy afforded by self-employment,
and they are quitting paid employment in favor of entrepreneurship.”
Where Are They Based?
Economists at UCLA Anderson Forecast developed
an index of micro business activity using data from GoDaddy to map out where
the new businesses are. Santa Clara, California, was at the top of the index,
and counties surrounding Washington, DC, were also high on the list. In these
counties, new firms can feed off government contracts. The other two locations
were Brooklyn and Manhattan in New York.
Going Strong?
About nine out of ten respondents in the Gusto
survey admitted that their company did well and performed as per the forecast or
even better than the forecast.
However, more than one-in-five have admitted they
took on a side job to help cover operating costs.
Female Entrepreneurship is Rising in Developing
Nations
In the Female Entrepreneurship Resource Point,
the World Bank has stated that between eight million and ten million small and
medium-sized enterprises spread across the developing nations have at least one
female owner.
The
World Bank also said that working from home helps women “satisfy competing
demands for their time.” This includes “a disproportionate share of housework
and child-care responsibilities.”
The Obstacles
In developing nations, the most common
obstacles faced by female entrepreneurs are a lack of access to finance and
legal inequalities. The restrictions on owning or managing property also pose a
big challenge.
The World Bank also shared that globally, only
one in three businesses are owned by women.
Sources:
https://www.bloomberg.com/news/articles/2022-06-23/half-of-new-us-entrepreneurs-are-women-leading-a-creation-boom
https://www.bnnbloomberg.ca/half-of-new-us-entrepreneurs-are-women-leading-a-creation-boom-1.1782656
https://www.weforum.org/agenda/2022/07/women-entrepreneurs-gusto-gender/