Sunday, June 05, 2011

Pittsburgh's Gender Gap in Entrepreneurship

A previous post described the dismal state of African-American business ownership in the Pittsburgh region based on the results of the 2007 U.S. Economic Census.

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

(A version of this post appeared as the "Regional Insights" column in the Sunday, June 5, 2011 Pittsburgh Post-Gazette.)


Anonymous Anonymous said...

Pathetic doesn't even begin to describe this region's efforts to cultivate women entrepreneurs.

The local organizations created to help women entrepreneurs are a joke. E-Magnify at Seton Hill told me just last week that they have do not have the CORE FOUR® Business Planning Courses occurring anytime soon, but they'll take my name and number and let me know when these classes will take place.

And check out the NAWBO Pittsburgh, like so many others, is not up-to-date. It's depressing being a woman here.

Some regions are entrepreneur-friendly, some are not. Guess which category the Pittsburgh one falls into?

9:49 PM  
Anonymous Lee Ann Munger said...

As Mr. Miller points out in his post, the region features a number of organizations dedicated to the growth of women-owned businesses. However, I disagree with Mr. Miller that the range of choices could be "confusing" to women. On the contrary, the wealth of options available provides women with a range of services to fit their stage of business development. Our PowerLink Advisory Board program, for example, supports the growth of established women-owned businesses. Although only 3% of women-owned firms nationally have revenues over $1 million, 41% of PowerLink firms have exceeded $1 million and one third of those companies hurdled that goal following engagement with their PowerLink Advisory Board.

I recently met the principals of Golden Seeds, a national angel investment organization that invests exclusively in women-owned firms. During their visit, we learned that they have a higher concentration of investment in Pittsburgh firms than anywhere else in the country. Some of us were surprised and curious. They cited an unusually high level of cooperation among economic development organizations as the primary reason. Their observation is that the range of services available creates a continuum so that there is support for every stage of business development.

The Pittsburgh region is a great place to do business. Relationships are easy to establish and services are abundant and easy to access. I urge any woman entrepreneur who feels that she hasn’t found helpful resources to dig deeper. It is true that women entrepreneurs still have a long way to go to catch up with their male counterparts, but support is available.

2:38 PM  

Post a Comment

<< Home