Across the United States, the surge of women entrepreneurs and business owners in recent decades and the increasing number of women in management has changed the gender composition of business leaders. In Wisconsin, women-led businesses have also grown in number, market presence, and economic importance. The number of self-identified woman-owned or managed (WOM) businesses in the state more than tripled between 1990 and 2011. In 2011, women owned or managed nearly 19% of businesses in Wisconsin. Despite the growth, however, the share of women-owned business is still relatively small. Research associate Tessa Conroy and professor Steven C. Deller, both of UW-Madison's department of Agricultural and Applied Economics, have authored a new study, Women Business Leaders Across Wisconsin 1990-2011 which finds that women as business owners may be an underutilized resource for profound economic development and growth across the state. The report is intended to help local economic planners take full advantage of their women-owned businesses as a source of economic growth and development.
Conroy and Deller found that as of 2011 in Wisconsin, women owned or managed over 80,000 businesses, employed over 550,000 workers, and earned $45 B in sales. Despite these numbers, there is a comparative lack of women-owned businesses in the state and that proportional difference is conspicuous because research suggests that women are valuable to businesses. (Conroy and Deller cite a wide and growing body of national research which has found that women-led businesses are more effectively led, are more financially honest, have more customers and increased sales and show greater profits than male-led businesses.)
Economic development policies aimed at enhancing business ownership in Wisconsin must consider how the characteristics, choices, and constraints of women relate to disparities in ownership and performance between the genders. There is some evidence that the small share and lower performance of women-owned businesses is a reflection of women having different personal and professional goals. For instance, women are concentrated in healthcare, education, and other services in Wisconsin and nationally. Simply by implication of their chosen industry, women business owners may earn lower sales and employ fewer workers. Yet even within these sectors (that already feature lower average sales and employment), women-owned businesses are still smaller than their counterparts with other forms of leadership (e.g. male-owned or both male-and-female owned).
If the rarity of women-entrepreneurs and smaller size of their businesses is not entirely a result of female preferences, then, women may represent a source of unrealized economic gains. Differences in types of education and access to capital seem to partly explain the differences in performance between male and female-owned businesses, suggesting that the gender disparities are at least somewhat a result of obstacles for women entrepreneurs. Potentially, these constraints on women entrepreneurship can be alleviated through policy changes and lead to more businesses with greater growth potential in Wisconsin.
Conroy and Deller reference the many entrepreneurship and small business development and support programs offered across Wisconsin as opportunities for making policy changes that can positively affect women entrepreneurs. These include programs offered by institutions such as the Small Business Administration, Small Business Development Centers through the University of Wisconsin-Extension, the Wisconsin Technical College System and the State of Wisconsin, including but not limited to the Wisconsin Economic Development Corporation. The challenge is for these educational and counseling programs to address issues specific to women entrepreneurs, business owners, and managers. "If programs are designed with the philosophy that one-size-fits-all," says Deller, "then important economic development opportunities are missed." Conroy and Deller also cite women business owner support networks, such as the Wisconsin Women's Business Initiative Corporation (https://www.wwbic.com/) and the Women's Council Wisconsin (http://womenscouncil.wi.gov/) as organizations that provide services specifically aimed at the needs of women-owned and managed businesses. Tessa Conroy offers these initial recommendations for local communities: "local planners can start by 1) engaging conversations with women business leaders to better understand their needs and obstacles; 2) increasing the visibility of these women's networks and helping women learn from one another and 3) connecting women with bankers, venture capitalists, and others in small business finance."
Read the full report here and policy brief here; see brief Fact Sheet here.