Women entrepreneurs are fuelling US business growth – here’s how
In the wake of the COVID-19 pandemic, women have been driving significant growth in entrepreneurship. According to a survey by Gusto, women made up 47% of U.S. entrepreneurs starting businesses in 2022, a sharp increase from the 29% seen before the pandemic. This surge is largely driven by a desire for financial security and flexibility, with many women starting businesses to supplement household incomes and counteract rising living costs.
The pandemic transformed traditional work structures and motivated many to pursue entrepreneurship, with women leading this charge. For two consecutive years, women have created nearly half of all new businesses in the U.S. Financial instability, caused by high inflation rates and professional burnout, has further pushed mid-career women into launching their ventures. This trend highlights the importance of self-employment as an alternative route to generating income, allowing women to take greater control over their time and financial future.
The Gusto report reveals that financial flexibility and stability were the primary motivators for many women starting their businesses. Specifically, 41% of the women surveyed cited the need to improve financial stability and supplement household income, up from 24% the previous year. With inflation reaching 5% in March 2023, far above the Federal Reserve’s 2% target, the economic climate has made entrepreneurship an attractive option for many women. High costs of living, combined with rising prices, are propelling individuals to seek alternative sources of income.
Despite the positive strides, challenges remain for female entrepreneurs, particularly women of color. Access to capital continues to be a significant hurdle. According to Gusto’s findings, minority entrepreneurs, especially Black women, are often overlooked when it comes to receiving capital investments. White business owners are 2.5 times more likely to secure capital than their Black counterparts. This disparity underscores the barriers that women of color face in securing the resources they need to grow and sustain their businesses.
Recognizing these issues, the World Economic Forum’s Growth Summit, which took place on May 2-3, 2023, in Geneva, addressed entrepreneurship as a vital pathway to economic growth and gender equity. The summit brought together leaders from across industries to discuss the future of work, economic opportunities, and ways to close the gender gap. By highlighting success stories and fostering discussions on entrepreneurship, the summit aimed to inspire policies and initiatives to support women in business.
The summit also emphasized the importance of visible role models and platforms like UpLink, a Forum-backed innovation network, which showcases female entrepreneurs making an impact. One such example is Nivedha RM, founder of TrashCon, a waste management company that uses automated systems to sort and recycle waste. Prominent female entrepreneurs like Nivedha not only highlight the innovative contributions of women but also serve as inspiration for others facing systemic challenges.
According to the World Economic Forum’s Global Gender Gap Report 2022, the share of women in leadership roles has increased steadily over the past five years, reaching 42.7% in 2022, the highest gender parity score yet. While this progress is promising, there is still considerable room for improvement, especially in industries where women remain underrepresented in senior positions. The Forum continues to advocate for equal opportunities for women in the workforce and to push for measures that foster a more inclusive economy.
In conclusion, the rise of women entrepreneurs post-pandemic signifies a critical shift in how women participate in the economy. While the challenges of access to capital and leadership roles remain, the resilience and innovation displayed by these women highlight the transformative power of entrepreneurship. Addressing these barriers and fostering inclusive growth will be crucial for sustaining this positive momentum and ensuring that women continue to thrive in the business world.
For further insights, explore the full articles:
Global Entrepreneurship Monitor (GEM) – Offers insights and statistics on global entrepreneurship trends. GEM
Women’s Business Enterprise National Council (WBENC) – Provides resources and support for women-owned businesses. WBENC
National Association of Women Business Owners (NAWBO) – Advocates for women entrepreneurs and provides networking opportunities. NAWBO
