On paper, women business owners are on fire.
Over the past 16 years, employment by women-owned businesses is up 10 percent and their revenues have grown 63 percent. Today, 10 million U.S. businesses are owned by women. They generate more than $1.4 trillion in revenues and employ 8.4 million people.
The past year saw some tremendous advancements for women entrepreneurs, as well. For the first time, they landed 5 percent of all government contracts — worth almost $18 billion — a goal Women Impacting Public Policy has dedicated itself to achieving for 15 years. The 5 percent figure is a crucial milestone for women entrepreneurs. Reaching it has been a objective for the federal government since 1994, and for good reason: Women business owners are a dynamic force in the American economy and their success is good for the nation.
But it’s 2017 and women entrepreneurs still face many unique and formidable challenges. They get significantly less capital than their male counterparts and they’re woefully underrepresented on the boards of regulatory agencies, venture capital investment teams and in the companies that draw such investment. And while the government finally reached its modest goal set more than two decades ago to spend 5 percent of its small-business contracting dollars with women-owned firms, women are still being shut out of the most lucrative contracts the government offers.
In the fall, WIPP released a report analyzing 19 of the government’s largest and most lucrative contracts and found that 12 have requirements that ensure certain socioeconomic groups have access to the contracts. But of those 12, just a quarter have such requirements for women-owned firms.
Women entrepreneurs have fought and worked hard to create the economic power that leads to statistics that are impressive on paper. With some help from policymakers, women business owners can become an even greater economic powerhouse.
Here are the top issues that those in the 115th Congress and new administration who are serious about helping women in business must tackle:
- Help female business owners get the capital they need. Only 4 percent of all commercial loan dollars go to women. The cumulative regulatory burden on community banks — a traditional source of capital for female entrepreneurs — has increased costs and made it difficult for these institutions to rationalize smaller loans. The unmet needs of women entrepreneurs total billions of dollars each year.
- Open the door to women on large, multi-year government contracts. Parity in federal procurement opportunities is essential.
- Use tools including the Small Business Investment Company Program, a Small Business Administration initiative that facilitates the flow of long-term capital to small businesses and is a good way to encourage more women to become fund managers. The limited number of female fund managers is a factor in female business owners receiving only 3 percent of all venture capital.
- Continue efforts to strengthen intellectual property rights and protections at home and abroad to encourage entrepreneurship and the global expansion of women-owned firms. Ninety-five percent of consumers live outside the U.S.; business growth must be fueled by access to international markets, and intellectual property protection is key to this.
- Put forth a regulatory system that is inclusive, transparent and flexible.
- Appoint more women to the boards of federal regulatory agencies where they currently are woefully underrepresented.
- Update the tax code, which includes both corporate and individual reform. Women business owners seek certainty, simplicity and fairness from the tax system.
That’s a big list. But progress and success in these areas will help women in business thrive and that will help drive our economy to greater heights — a truly worthy goal for a new Congress and new president.
Jane Campbell is president of WIPP and director of the National Development Council’s Washington office.
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