Pittsburgh's Gender Gap in Entrepreneurship
Are Pittsburgh’s female entrepreneurs doing any better?
The short answer is “No.”
The Pittsburgh Region ranks dead last among the top 40 regions in the number of women-owned businesses relative to the size of its population, and the number of women-owned businesses here has grown more slowly than in most other regions.
In 2007, there were 48,354 businesses in southwestern Pennsylvania that were owned by women (i.e., women had a 51% or higher ownership stake). Although that’s a lot, it represents only 68 women-owned businesses for every 1,000 women ages 20-64 living in the region, versus an average of 89 in other regions. Compared to places like Charlotte, Columbus, and Detroit, which rank about average on this measure, we have 15,000 fewer women-owned businesses than we should.
In every region, the majority of businesses are owned by men, but an even larger share are owned by men here than elsewhere. In southwestern Pennsylvania, only about one-fourth (26.7%) of all businesses were owned by women in 2007, the second smallest percentage among major regions (only Nashville had a smaller proportion of businesses owned by women). The highest percentage was in Washington, DC, where women own one-third (33.1%) of the businesses.
The Pittsburgh Region has seen significant growth in women-owned businesses over the past decade; there were 8,179 more women-owned businesses here in 2007 than in 1997, a 20% increase. However, that was the third smallest growth among the top 40 regions; the number of women-owned businesses grew three times as fast in other regions. Of course, overall business growth in Pittsburgh was slow compared to other regions during that period, but southwestern Pennsylvania also saw below-average growth in the percentage of businesses that were women-owned compared to other regions.
A bright spot is that although Pittsburgh has fewer women-owned businesses than other regions do, the ones that are here are bigger and employ more workers than those in other regions. In fact, Pittsburgh ranked #1 among the top 40 regions in the country in the proportion of women-owned businesses which had at least one employee. Nearly one in seven (14.8%) women-owned businesses here had employees, compared to only 12% on average elsewhere. (About 75-80% of businesses of all types in every region are sole proprietorships or partnerships with no employees). Also, Pittsburgh’s women-owned businesses had average annual revenues of $181,000; that’s the 10th highest average among the top 40 regions.
What types of businesses do women own in Pittsburgh? Sixty percent of them are in four sectors: health care and social assistance; retail trade; professional services; and “other” services (primarily personal services). Compared to other regions, women owners are under-represented in every sector here except for manufacturing and retail.
You might be surprised to learn that 867 manufacturing firms in our region in 2007 were owned by women (17% of all of our manufacturing firms), and they employed over 4,200 workers. It’s important to note, though, that the region has lost a lot of manufacturing jobs since 2007, and we don’t yet know how women-owned manufacturers fared compared to others.
In total, Pittsburgh’s women-owned firms employed over 63,000 individuals in 2007 (in addition to the owners themselves). However, the average wage for their employees was only $24,953, the third lowest among the top 40 regions; the average wage paid by women-owned businesses in most other regions was more than $30,000. The lower wages here are likely due in part to the fact that so many of our women-owned firms are in lower-wage sectors like social services and retail.
The numbers make a clear case for stronger efforts by regional leaders to encourage women to start businesses and to help women entrepreneurs grow their businesses. Even a small percentage increase in the number of women-owned businesses or in the average number of employees per firm could result in thousands of new jobs for the region.
Fortunately, there are a number of organizations in the region whose mission is to help female entrepreneurs. For example, Chatham University’s Center for Women Entrepreneurship, the University of Pittsburgh’s Center for Women in Business, Seton Hill University’s E-Magnify Women’s Business Center, the Diversity Business Resource Center, the National Association of Women Business Owners, the Women’s Business Network of Southwestern Pennsylvania, and others all have programs specifically directed at women starting or operating a business.
However, the fact that there are so many different organizations and programs could be confusing for women considering becoming entrepreneurs and could result in inefficiencies in the delivery of services. Coordination of services and joint marketing by these programs might enable them to expand their collective impact and help improve Pittsburgh’s rankings compared to other regions.
If you’d like to learn more about the challenges women entrepreneurs have faced and the successes they’ve achieved, you might want to attend The Enterprise Forum’s program on women-owned companies this Wednesday (June 8). More information is available at www.enterpriseforumpittsburgh.com.
(A version of this post appeared as the "Regional Insights" column in the Sunday, June 5, 2011 Pittsburgh Post-Gazette.)