The number of women entrepreneurs in the United States continues to grow at an accelerated rate. According to the 2012 U.S. Census Survey of Business Owners and Self-Employed Persons, there are 9.9 million women entrepreneurs who bring in about $1.6 trillion in revenue. In order to continue this remarkable progress, the U.S. needs to create and sustain the environments that will allow women business owners to thrive.
Dell has recently announced research findings from their annual Dell Women Entrepreneur Cities (WE Cities) Index, the only global, gender-specific index that looks at a city’s ability to attract and foster growth of women-owned firms. Dell’s WE Cities Index is a measure of a city’s ability to support high potential women entrepreneurs by helping them grow and scale their businesses. Like NWBC’s recent entrepreneurial ecosystem model, Dell’s WE Cities model provides a tool to guide entrepreneurs and policy makers on cultivating environments in which women-owned business can flourish.
This research from Dell’s WE Cities heavily delved into during the 2016 DWEN Future Ready Research Symposium. Conversations between the 40 invited women entrepreneurs and entrepreneurial ecosystem builders at the research symposium concluded that, “creating robust ecosystems with incubators, accelerators and mentors makes a world of difference for entrepreneurs — it’s all about the network.” Participants’ conversations were used as a building block for Dell’s WE Cities framework for the creation of their five central pillars.
- Capital – Measures rate and value of funding received by women owned businesses
- Technology – Measures women entrepreneurs’ global connectivity via the internet and social media networks; the cost of staying connected; and policies that enable women to access and utilize information data and technology
- Talent – Measures the likelihood of finding women with the training and experience required to run and scale a business; the availability of the local labor force with the skills; and education necessary for a women entrepreneurs to build a well-functioning team
- Culture – Measures the prevalence of significant mentors, networks, and role models; the leading attitudes and exceptions; and the policies that allow women to undertake leadership positions and business success
- Markets – Measures whether female entrepreneurs operate in a market with suitable size such that scale can be achieved
Using this index, New York City was ranked first overall among the 50 cities, followed by the general group of cities comprising the Bay Area; London; Boston; and Stockholm. New York was ranked first for its ability to attract women (Talent), as well as for Markets, and sixth for Access to Capital. But New York received an average score 62.9 out of 100 out of the five central pillars, therefore showing that they still have a long way to go! The Bay Area was ranked first for Capital and ranked second for Markets.
In order to continue to support women entrepreneurs and strengthen our local economies and national economy, in-depth research on entrepreneurial ecosystem supports for women business owners and connected ecosystem models are a must, to encourage and sustain economic growth. In June 2017, NWBC recently released its research on entrepreneurial ecosystems in order to provide tools and policy recommendations to support women entrepreneurship. NWBC commissioned this research with Washington CORE to also develop an entrepreneurial ecosystem model that can be adopted by key stakeholders to evaluate how their region provides opportunities or consider how to strengthen the system of support for women business owners. NWBC created an entrepreneurial ecosystem wheel with 7 domains that an ecosystem needs in order to allow women entrepreneurs to thrive in the ecosystem.
- Capital – Measures access to loans, expansion capital, early stage capital along with angels, venture capitals, banks and high investments sources
- Policy – Measures access to economic development, regulations, assistance, cluster development along with federal, state and local government
- Resources – Measures access to strategic advice, mentoring, events, workspace, operational support along with accelerators, incubators, professional services
- Market access – Measure access to supply chains, spin-offs, strategic partnering along with large companies, local chambers, and industry associations
- Community building – Measures access to coaching, networking, advocacy, storytelling along with peer networks, media and advocacy groups
- Innovation –Measures access to R&D, technology, test bed, advanced tools along with universities, labs and IP managers
- Human capital – Measures access to talent pool, training, skills development, consulting along with universities, community colleges, experts and agencies
In this research, NWBC not only developed the ecosystem model as a tool for stakeholders, but also identified concrete recommendations for building strong and interconnected ecosystems for women business owners. In its report, NWBC acknowledges the need for policy change and provides recommendations for federal and regional stakeholders.
NWBC’s recommendations for federal and regional stakeholders include:
- Develop a repository of resources for entrepreneurs: Many entrepreneurs are unaware of the resources that are available to them, therefore it is critical to promote awareness of existing resources, and these include the development of local, national and regional resources.
- Promote both traditional and alternate forms of capital access among women: Women entrepreneurs continue to face challenges with capital, especially venture and angel funding sources. Research shows that women tend to more successful with Crowdfunding as a means of accessing capital and therefore it should be strongly promoted as alternate form of capital that women can access.
- Raise awareness of the Small Business Innovative Research and Technology Transfer (SBIR/STTR) programs: SBIR programs provide non-equity funding for small business to develop and commercialize their research. Targeted outreach is necessary for SBIR programs as awareness of the SBIR programs is lower among regions throughout the U.S.
- Encourage diverse management teams and investments: Studies show that diverse management teams lead to better decision making by investors and improves access to capital for women entrepreneurs. The federal government should explore requirements and incentives for investors that receive funding to meet certain requirements for diversity within their management and investment teams.
NWBC’s research and the Dell’s WE Cities Index both emphasize that ecosystems are imperative for women’s entrepreneurial success. Women entrepreneurs have created 1.5 million more jobs since 2007 and are continuing to contribute to the economy. We need to continue to strengthen the socioeconomic and business climates to better support women entrepreneurs and showcase the characteristics of the model cities/ecosystems that are demonstrating strength in women’s entrepreneurship. Starting a conversation on supporting entrepreneurial ecosystems for women is incredible, but continuing the conversation promotes change, as the success for women business leaders means success for the greater country. Continue YOUR conversation about supporting women’s entrepreneurship with NWBC at nwbc.gov and our Facebook, Twitter, and Instagram.
Author: Kamalpreet Chohan, 2017 Summer Fellow, University of California, Davis, Class of ’18.