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Our nation recently celebrated National Small Business Week, and the small businesses highlighted during award ceremonies in Washington are impressive.
The winners, who came from big cities and small towns, not only built successful businesses but also contribute to their communities in countless ways.
One of the more interesting features this year was that women received more than 40 of the awards. Women have become a major driving force in our economy.
As of 2006, women owned at least 50 percent of an estimated 10.4 million privately held businesses. They employed 12.8 million people and generated $1.9 trillion in sales.
From 1997 to 2004, the growth in women-owned businesses was nearly 2 1/2 times the rate of growth of all privately held firms. Clearly, female entrepreneurs are on the move.
What makes these entrepreneurs so successful? Is there something about them that differentiates them from other working women?
According to a recent study by the Office of Advocacy of the U.S. Small Business Administration, the answer is yes. The survey, Human Capital and Women’s Business Ownership, compares and contrasts the human capital – educational attainment, occupational skills, entrepreneurial preparedness – of female business owners and other working women.
The results illuminate why female entrepreneurs are driving in the fast lane of our economy. Self-employed women and other working women differed on most of the human capital variables such as education, experience and preparedness that the authors examined. For instance, self-employed women had more education and they increased their educational attainment at a faster rate than their wage and salary counterparts.
This finding mirrors a recent working paper by the advocacy office’s chief economist, Chad Moutray. He found that the likelihood of becoming one’s own boss increases with additional college education. His research shows that heads of households with some post-baccalaureate experience are 8.3 percent more likely to be self-employed, whereas those with any college are 3.3 percent more likely.
Self-employed women also were more likely to be found in male-dominated industries than other working women. It seems that female entrepreneurs are more likely to branch out into nontraditional industries.
Consider, for example, Karlene Hunter of Kyle. Hunter was named the South Dakota Minority Small Business Person of the Year for 2007 and is the founder and chief executive officer of Lakota Express Inc. Her business is a modern call center and marketing shop that provides back-office services to Fortune 1,000 companies and nonprofits, and supplies jobs to the people of the Pine Ridge Indian Reservation.
No matter what the industry, working women are becoming a more powerful force. These women are helping reshape our views of women and their contributions to the economy.
Henderson is a regional advocate with the Office of Advocacy, U.S. Small Business Administration
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