Cities across the country that want to create more vibrant economies might consider what more they can do to support and fund women entrepreneurs. That’s the message of a new report that looked at the growth of women-owned companies and their impact on urban economies.
“While women entrepreneurs are making a huge impact in New York and other cities, there is so much more to be done,” says Jonathan Bowles, executive director of the Center for an Urban Future, the New York think tank that conducted the study. “Cities tend to look at biotech or healthcare or some other industry they can support to drive their economies, but this shows that women entrepreneurs are an economic opportunity for them.”
The number of women-owned businesses in New York City increased by 65%, adding more than 56,000 jobs and $3 billion to city’s payroll between 2002 and 2012 (the most recent year quality data was available). Female founders started businesses in every industry, with women-owned businesses growing by at least 20 percent in construction, manufacturing, health care, education, real estate, transportation and warehousing, information, retail and wholesale trade.
In all, women owned about 40% of NYC businesses in 2012, up from 32% in 2002, according to Breaking Through: Harnessing the Power of Women Entrepreneurs. For the study, supported by Capital One’s Future Edge, CUF interviewed 100 women entrepreneurs, investors, researchers, business consultants and heads of non-profit organizations.
Although most of the data in the report comes from 2012, it takes note of CUF research showing that New York women received more venture capital–17%–than women in Boston, with 14.8%, and San Francisco, 12.1%, in the third quarter of 2015. Bowles attributes some of that difference to the industry experience of some founders. “Women in New York have been in leadership positions in a lot of key industries that have been disrupted by tech,” he says. The city’s developed “its special sauce”—linking domain expertise and tech—with startups in adtech, fintech, fashion tech, and the like, and experienced women in those sectors have had success raising capital.
A variety of factors fueled the increase in women-owned ventures. Some who lost their jobs or saw their career opportunities shrink after the financial crises decided to start their own companies. Others became frustrated with the slow growth of wages. “People are working hard and not getting ahead,” says Bowles. “Low- and middle-income people are turning to starting businesses so they can put more money on the table and have more self-sufficiency.” Barriers to entry have gone down, in large part because of technology. Bowles says an increase in microloans in cities including New York and San Francisco has helped encourage some women, particularly minority and immigrant women, to start businesses.
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