By Rieva Lesonsky
At President Obama’s Jobs Summit last month, attendees floated several interesting ideas for spurring job growth. One that deserves our attention, Maria Pinelli says, is empowering women entrepreneurs to grow their business.
Pinelli (at right), the Americas Strategic Growth Markets leader for Ernst & Young, last year spearheaded the creation of Ernst & Young’s Entrepreneurial Winning Women program. Writing on ForbesWoman.com, she notes, data from the Center for Women’s Business Ownership show that the 8 million women-owned businesses in the U.S. account for more than 23 million jobs—16 percent of all U.S. employment. But only one in five women-owned firms has revenues over $1 million. “If women entrepreneurs in the U.S. started with the same capital as men entrepreneurs, for instance, they would add a whopping 6 million jobs to the economy within five years–2 million of those in the first year alone, according to Babson College research,” Pinelli writes.
Pinelli believes the key to helping women business owners create jobs is helping them in three key areas: access to capital, business networks to help them scale their businesses, and global supply networks.
In terms of financing, Pinelli points out that women-owned businesses get only about 5 percent of all equity capital investments in the U.S., and only 3 percent of women business owners get venture capital. As for networking, while women excel at networking and bonding, they are not doing as well at using networks to get targeted advice on scaling their businesses. Most programs to help women entrepreneurs focus on startups rather than growth. Finally, while global markets offer huge potential to all businesses, only a small percentage of governments and corporations pursue women-owned businesses as contractors.
As Pinelli points out, women entrepreneurs have come a long way – but still have a long way to go. While our federal government looks at ways to help entrepreneurs grow and thrive, I hope that they pay special attention to the needs of a potentially powerful source of new jobs—women-owned businesses.