POLICY
RECOMMENDATIONS
The number of women-owned business is growing exponentially post-pandemic, especially those owned by women of color. There are 20 percent more Hispanic-owned businesses than before the pandemic, and Black women have shown a 48 percent increase in starting their businesses.7,8 Beginning a business can be an effective pathway towards building wealth within families and communities, and it is important that these entrepreneurs are supported.
However, access to capital remains a concern for women-owned small businesses, specifically for women entrepreneurs of color who often struggle to secure sustainable sources of funding. According to a 2019 HSBC Global Private Banking survey, 46 percent of American women entrepreneurs experienced gender bias when raising capital.9
Gender bias in accessing capital has real consequences and results in a greater number of women than men having their application for a business loan rejected. Unconsciously, womenowned businesses can be incorrectly regarded as having less credibility and legitimacy.10 This institutional bias drives women entrepreneurs to take out personal loans, rely on family, or pull from personal finances. Over time, this can impede the growth of women-owned small businesses, which can account for the lack of women business owners who make more than $1 million annually in revenue.11
Capital pathways must be expanded so women entrepreneurs can have fair access to begin their businesses. While entrepreneurs may have a fruitful business idea, they may not have existing relationships with banks, making it difficult to access traditional financing resources. For instance, Latina entrepreneurs are the least likely to use banking loans to start their business compared to their white counterparts, despite Latinos starting more businesses than any other racial or ethnic group in the country.12 Black women are also more likely than all other racial or ethnic groups to self-fund their businesses, with 61 percent of Black women self-funding their businesses.13 It is clear that there are deep-rooted inequalities within the financial system that negatively impact women of color.
Women of color, who are starting businesses at an increased rate and are often rejected at higher rates than their white counterparts, are also more likely to self-fund and are at a higher risk of being taken advantage of by predatory lenders. Often, predatory lenders operate in a way that is not transparent, charging fees that are not presented upfront and coaxing small business owners to repay loans at times with an annual percentage rate as high as 350 percent.14 Predatory lenders are often found online by entrepreneurs looking to finance their budding businesses sustainably. Payday loans can also be mistakenly taken out by small business owners looking for a safety net for emergencies and can ultimately lead to even greater financial hardships.15 In addition to these quick loans, credit
cards are also increasingly used by small businesses to meet their capital needs.16 Personal credit card use for business expenses can make it difficult to track business expenses and could result in potential financial problems.
It is the prerogative of the Council to increase support for community-based incubators, accelerators, lenders, and resource partners. The expansion of SBA’s Community Advantage Program is an exciting prospect for underserved populations. The Community Advantage Program operates through mission-driven community lenders, such as community development financial institutions (CDFIs), Community Development Companies (CDCs), and microlenders.17 Through this federal program, more lenders can be empowered to support traditionally underserved business owners.
Equitable access to diverse sources of funding is crucial for women-led enterprises to continue to succeed. Ultimately, women entrepreneurs must have long-term funding opportunities to successfully and sustainably grow their businesses. NWBC is encouraged by the actions already taken by SBA to close the gender and racial lending gap. For example, through the 7(a) and 504 programs, SBA approved 4,700 loans to Black-owned businesses in FY23.18 The loan programs also made more than 13,000 loans to women-owned businesses – a record number of loans totaling more than $5 billion. In part this growth in access could be attributed to the Community Advantage Program, the Community Navigator Pilot Program that further targets our nation’s most disadvantaged small businesses, the expansion of Women’s Business Centers at Historically Black Colleges, and steps taken by SBA to modernize its loan programs.19 There remain additional policy solutions that are forward-looking and would provide women entrepreneurs with much-needed capital access to begin or grow their businesses
The federal government is the leading buyer of goods and services in the United States. In FY22, the federal government spent $694 billion on federal contracts, an increase of $3.6 billion from the previous fiscal year.20 In FY22, $162.9 billion of that $694 billion was awarded to small businesses, and $28.1 billion was awarded to women-owned small businesses.
As a part of the WOSB and economically disadvantaged women-owned small business (EDWOSB) federal contracting programs, the federal government has a goal that 5 percent of all federal prime contracting dollars should be awarded to WOSBs each year. However, this goal has only ever been met twice, in 2015 and 2019. Despite the billions of dollars awarded to WOSBs in FY22, this was only 4.63 percent of their 5 percent goal.
Federal contracts remain an optimal way for small businesses to expand and ultimately build wealth for the entrepreneur and their families. With the talented pool of women small business owners, it is disheartening that the federal government has failed to consistently meet their 5 percent goal. From FY20 to FY21, there was a 6 percent decline in small business owners awarded federal contracts, and WOSBs accounted for a quarter of that decline.
These low numbers could be due to, in part, a lack of participation in the WOSB program because of the considerable effort needed to become certified. In several anecdotal stories shared with NWBC, women small business
owners are not convinced that the time it takes to be certified is worth it when considering the costs and benefits. According to a recent Congressional Research Service report, women are much more likely to get awarded a contract while facing full competition, or through another set-aside program than through the WOSB program. Moreover, even women small business owners who are not a part of the WOSB program are still counted in the overall women’s small business goal, impacting how the success of the WOSB program is measured.
While the federal government failed to meet their overall goal, 75 percent of federal agencies met their individual goal in FY21. There has been an increase of federal contracting officers utilizing the WOSB program.24 It is important that best practices from these successful agencies are adopted so the federal government can continue to ensure prime federal contracting dollars are equitably awarded. It is our hope that SBA’s WOSB Certification program and the OSDBUs that connect with it are given the appropriate resources and empowered to further support WOSBs in securing federal dollars. Through the WOSB program, women small business owners could potentially earn hundreds of millions of dollars in the federal marketplace.
Further, NWBC is encouraged that SBA’s ChallengeHER program has continued to support women small business owners, in-person and virtually, in navigating the federal contracting process. This program is a demonstration of intent from the current administration to include women in federal contracting initiatives. Federal contracting is one pathway for small business owners to experience a reliable stream of income and ultimately produce considerable economic benefits for their communities. The U.S. government has an opportunity to shape local labor markets, create jobs, and uplift marginalized populations through federal contract opportunities. Too often, women are overrepresented in contract industries as low-wage employees.26 NWBC will continue to advocate for women to become the owners and employers within the federal contracting system.
As an engineer by profession, I embarked on a remarkable journey, venturing into the world of entrepreneurship to establish my own firm specializing in engineering design and project management. This endeavor was born out of necessity following my unfortunate layoff in the wake of the 2008 financial crisis. At the outset, my company was small, devoid of a chief financial officer or legal counsel, just an ambitious woman with a vision.
While my expertise lay in engineering, the intricacies of running a business were uncharted territory for me. With unyielding determination, I immersed myself in every business development workshop available, often taking my daughter along when babysitting was elusive.
My pivotal encounter with the U.S. Department of Transportation (USDOT) and an approved CDFI, facilitated by my local Disadvantage Business Enterprise Supportive Services group, was transformative. The group introduced me to a federally supported mobilization loan program designed to alleviate startup expenses for projects funded by the federal government. Under this program, businesses could submit invoices to the client and, upon verification by the CDFI, receive an advance payment, with a modest fee deducted. Crucially, the client’s payment would be channeled directly to the CDFI, ensuring a seamless cash flow for the business.
Several years into our journey, my firm secured a significant project that demanded additional resources such as company vehicles, software, and equipment. Turning to the approved CDFI lender, I sought to initiate the USDOT-backed mobilization program. However, the lender advocated for an alternative plan: their own lending solution devoid of federal backing. The lender convinced me that affording the necessary vehicles and software was implausible without embracing their product despite its exorbitant interest rates. Trusting their expertise, I reluctantly agreed.
As I sat at the closing table signing my loan documents, I was confronted with the shocking reality of astronomical interest rates, a staggering 12 times higher than anticipated. I placed my trust in the local CDFI representative, believing he had my best interest at heart given the advanced stage of the project. To my dismay, I later learned from a colleague that the CDFI was promoting their product for their own financial gain rather than advocating for the USDOT mobilization program. I felt exploited and betrayed. Was this what it meant to be labeled a “disadvantaged business”? How could a minority-owned entity, entrusted by the U.S. government, intentionally deceive another minority-owned small business? This individual had cultivated a prominent reputation as the go-to source for small business capital among the local community
Months later, I met with the president of the company, hoping to address my concerns and share my disheartening experience. Regrettably, he seemed unperturbed, even proud of his local representative’s actions. As he gazed out of my office window at the burgeoning developments
in the area, he proposed a solution that involved his company obtaining an equity stake in my property or refinancing my mortgage. It was evident to me that selfinterest was the driving force behind his offer, and I declined.
The loan from the CDFI created a domino effect that nearly toppled
my business; it played a pivotal role in the perfect storm that
threatened to capsize us. Eventually, with the assistance of a new
local CDFI representative who genuinely cared about my well-being, I
explored the option of refinancing the loan using collateral. It took
nine painstaking months, but I was determined to sever the financial
ties.
Last June, I had the privilege of sharing my story with Shelby Scales, the (now former) director of OSDBU in USDOT and discussing disparities and potential solutions for women and minority diverse business entities with Secretary of Transportation Pete Buttigieg. I am grateful for the opportunity to have my voice heard, recounting my journey of trials and triumphs.
Historically, women (especially women of color) have been left out of advancements and investments in STEM. Tomorrow, we hope that women entrepreneurs can tell their children the story of “how mommy saved the world.” Today, we share policy recommendations aimed at making that happen.
Women are making major strides today when it comes to education and workforce participation. However, when it comes to STEM fields, women remain underrepresented and still face major barriers to participation. These barriers are likely compounded with those faced by women entrepreneurs as well. For example, the U.S. is responsible for “40 percent of worldwide research and development investment and employs nearly one-third of the world’s scientists and engineers,” according to the U.S. Chamber of Commerce Foundation.27 Although women make up nearly half of the U.S. workforce, according to the U.S. Census Bureau, women only make up 27 percent of STEM workers
Workforce conditions for women in STEM are important, because workforce participation can be a potential pathway to entrepreneurship. Continuing to dig into the workforce perspective, according to the Pew Research Center, median earnings in STEM industries are two-thirds higher than median earnings for industries outside of STEM.29 Despite these increased earnings, it has also been found that the gender pay gap in STEM industries (74 cents on the dollar) is wider than the average for all industries (80 cents on the dollar). On top of the pay disparity, the same reporting found that half of women in STEM jobs experienced discrimination in the workplace. It is no wonder that despite earning the majority of bachelor’s degrees today, according to the
National Girls Collaborative Project, women earned only 24 percent of degrees in engineering, 21 percent in computer science, and 24 percent in physics.
This comes at a time when hundreds of billions of dollars are being invested into solving the problems of today, with approximately $1 trillion being put towards infrastructure through the Bipartisan Infrastructure Law (BIL) and $150 billion being invested in manufacturing and supply chain resilience through the CHIPS and Science Act. 31,32 Industries and issues
of the future are also being granted billions in investments, with the Inflation Reduction Act’s investments into climate and energy being estimated at $391 billion, and federal investments into industries of the future equating to $10 billion annually.33,34 At the same time, the BidenHarris Administration is committed to ensuring that, “40 percent of the overall benefits of certain Federal investments flow to disadvantaged communities that are marginalized, underserved, and overburdened by pollution” through the Justice40 Initiative.35 Given the historic inequities and ongoing barriers women entrepreneurs face in connecting to these types of opportunities, the Council is interested in determining how women entrepreneurs can best be empowered to seize this moment.
The benefits of accelerating women’s participation in STEM are worth raising. According to some estimates, nearly 3.5 million STEM jobs will need to be staffed in the next two years. Other estimates put this number, and the potential salary incentives, even higher. The Bureau of Labor Statistics estimated there were nearly 10 million people employed in STEM in 2021, and this estimate, “is projected to grow by almost 11 percent by 2031, over two times faster than the total for all occupations.” They also found that “annual wages as of May 2021 were $95,420 for STEM occupations, compared to $40,120 for non-STEM occupations.”37 There is a clear opportunity for women to advance equality through STEM. According to UNICEF, increasing women’s engagement in STEM can bridge the gender pay gap and boost women’s cumulative earnings by $299 billion over the next ten years in the U.S. and around the world.
There are a lot of dollars on the table for women in STEM. Getting those dollars to them and getting them ahead starts with ensuring there is a clear and leak-proof pipeline for women in STEM, starting with entrepreneurial education, investment, and outreach. Once women in STEM have the tools and opportunities to pursue their innovation through entrepreneurship, to ensure they are not left behind, women next need to have opportunities and funding accessible to them to support responsible advancement. These opportunities need to meet women where they are, at the community level, so that women entrepreneurs can drive advancement responsibly rather than get left in the air polluting dust of irresponsible progress and historical exclusion. As President Biden put it, “We’ll create good jobs for millions of Americans…and we’ll do it all to withstand the devastating effects of climate change and promote environmental justice.”39 Through roundtables, subcommittee meetings, informational meetings, and research, the Council has gained a stronger understanding of how to connect women entrepreneurs to the opportunities of today and lay the groundwork for an equitable tomorrow and have devised policy recommendations designed to do just that.
STEM is often called a leaky pipeline for women, with more and more women leaving STEM as they advance through their educational and professional careers. By connecting with the Department of Labor’s Women in Apprenticeship and Nontraditional Occupations (WANTO) grant program and SBA programs like the Growth Accelerator Fund Competition (GAFC) and the Federal and State Technology Partnership (FAST), the Council dug into how this pipeline is being repaired and strengthened for women across their careers and across the landscape of resource partners. Two specific areas of interest were women’s workforce participation in STEM and Architecture, Engineering, and Construction industries and how these women go from employees to entrepreneurs through accelerator and incubator programs.
Women are re-entering the workforce post-pandemic, making up 49.9 percent of all workers as of August 2023.43 Labor force participation rate for women ages 25 to 54 is currently 77.6 percent, a rate higher than pre-pandemic levels. Young mothers’ workforce participation likewise is at an all-time high.44 The question is now less about whether women re-enter the workforce and more about what kind of workforce they are re-entering. Approximately 2.6 million women remain on the sidelines, with 85 percent of them interested in re-entering the workforce.45 Women were overrepresented and more likely to be laid off in industries that were disproportionately affected by the pandemic, including leisure, hospitality, education, and health services.46 This occupational segregation widened the gender and racial pay gap even before the pandemic, with the Bureau of Labor estimating that “Black women lost $39.3 billion, and Hispanic women lost $46.7 billion, in wages compared to white men due to differences in industry and occupation in 2019".
Women have learned from this and have begun shifting from the Great Resignation to the Great Re-evaluation. Eight in 10 women who are interested in re-entering the workforce post-pandemic are specifically interested in STEM careers, according to a MetLife survey.48 Approximately three in 10 of these women would be encouraged to pursue STEM if there were dedicated trainings that help their career progression and paid internships or apprenticeships. The pandemic is not the only factor that has impacted women’s perspective on workforce participation and re-entry: a study from McKinsey found that women are 1.5 times as likely to need to seek new employment due to automation and artificial intelligence (AI) than men.
The need to reimagine our nation’s tech workforce was best captured by this quote from a Brookings report, “If there are few opportunities for women and minorities, we limit the job possibilities for almost two-thirds of the American population, which robs people of economic opportunities but also limits current and future innovation opportunities
This Council believes that workforce development is one segment of the Women in STEM entrepreneurial pipeline worth bolstering. One place to start may be apprenticeships
especially in infrastructure, construction, engineering, and architecture. Women currently make up roughly 18 percent of all workers in infrastructure and less than 5 percent of workers in the top 20 infrastructure industries, according to the Brookings Institute.51 However, the Brookings Institute also found that the gender pay gap in these fields is smaller in infrastructure than that for all industries, with women getting, “91 cents for every dollar male workers make as transportation managers and logisticians, and 88 cents for every dollar as material movers.” It’s no surprise then, that women’s participation in apprenticeships is on the rise. As estimated by Apprenticeship USA, “the number of female apprentices has more than doubled from FY2014 to 2022, and women now make up approximately 13.8 percent of active apprentices compared to 9.4 percent in 2014.”52 The Department of Labor has noted that 314,000 women currently participate in trades, the highest level ever recorded.53 Both Apprenticeship USA and the Department of Labor also found that women’s participation in apprenticeships significantly increases when they have access to support services such as transportation and childcare. While efforts like the WANTO program have been built around best practices to support women in trades, more can always be done. Women deserve to be able to participate in industries like construction, trucking, and infrastructure as tradeswomen both because historic levels of investment are being poured into these industries and because women entrepreneurs are more likely to hire women, but need a skilled workforce to meet this moment.54 In 2023, a woman might be hired as an apprentice on a construction project led by a woman architect and funded through BIL. In 2033, we imagine endless possibilities for that apprentice to start her own firm and build her own bridges.
But she will need business development resources to advance her journey, bringing us to the incubator and accelerator system. The Aspen Network of Development Entrepreneurs found in one study that “women-led ventures make up only 13 percent of applications to accelerators globally” but that women have a higher proportional acceptance rate despite of this lower rate of application.55 Because of the mandates tied to the public funding they receive, some have suggested that women’s participation rates in incubators may be greater than that of accelerators.56 Women apply for incubators and accelerators for a variety of reasons and receive unique benefits when they participate. One recent study found that in addition to their desire to increase their sense of legitimacy, female founders “seek and gain more entrepreneurial knowledge, network building, and entrepreneurial self-efficacy during their participation in accelerators than do male founders.”57 Another study found that (in a slight contradiction to that prior research), “compared to men, women entrepreneurs place greater value on knowledge transfer benefits (i.e. business skills education) but lower value on networking benefits offered by accelerators” and place greater value on access to funders when participating in accelerators.58 Women cannot be what they cannot see, and to see themselves as innovative entrepreneurs, they need to see themselves in the workplaces into which they enter, and in the incubators and accelerators that are designed to support them.
Women have the ideas, and those ideas have value; there just needs to be a clear, consistent, transparent and accessible means for developing, funding, and protecting their ideas. Through ongoing dialogues with SBA’s Office of Innovation and Investment (OII) as well as the U.S. Patent and Trademark Office (USPTO), the Council discovered the breadth of programs and resources designed to help women take their innovations to the next level. Based on these learnings, the Council is grateful for the continued efforts to ensure resources will be available and accessible to help along every step of the innovation journey.
Digging more deeply into the numbers around innovation, in the 233 years since the U.S. patent system began, according to USPTO, “women [have] made up only 13 percent of all inventor-patentees.” While the number of women inventor-patentees grew by 32 percent between 1990 and 2019, this slow rate of change means that women will continue to be left behind in the race to innovate.59 Estimates suggest that if this status quo is maintained, it will take over a century for women to reach parity in patenting.60 The problem is evident but so are the potential pathways to and positives from solving it. There is a clear link between educational attainment and the likelihood of patenting, with “women’s educational attainment of a bachelor’s degree or higher [being] 52 percent greater in counties with women inventor-patentees” according to one study on
local patterns influencing women’s patenting.61 Another study found that in top economic areas, if the percentage of new women inventors were proportional to the percentage of women with STEM bachelor’s degrees, “the number of female new inventors in the U.S. economy would have grown by 26 percent annually.”
Continuing to delve into the educational and economic connections, research has found that if girls were exposed to female inventors at the same rate as boys are to male inventors, “female innovation rates would rise by 164 percent and the gender gap in innovation would fall by 55 percent.”63 Turning those data into dollar signs, it has been suggested that if the patenting rates between women and men were equal, the number of commercialized patents would increase by 24 percent and per capita gross domestic product could increase by as much as 2.7 percent.64 Patenting parity is within sight, and with programs like Empowering Women Entrepreneurs (WE) at USPTO, progress is already being made to close that gap. This Council is proud of the strides that have been made to offer additional measures to get patenting parity over the finish line.
Ownership of an idea is half the battle; the other half is selling that idea or product through commercialization. Two major avenues for commercialization are the SBIR and STTR programs. Based on FY18-FY22, agencies participating in the SBIR program averaged $3.44 billion in spending annually, and while for the STTR program, the average annual spend was $483 million. These funds are made available through a competitive process. Phase I lasts six months to a year, covers concept development, and has a maximum amount awarded of $250,000. Phase II covers prototype development, lasts two years, and has a maximum amount awarded of $1.5 million. Phase III, the final phase, covers commercialization and is not funded through these programs.
According to the Congressional Research Service, WOSBs in FY2019 received “456 Phase I awards (11 percent of all Phase I SBIR awards) totaling $86.3 million (12 percent of total Phase I funding) and 214 Phase II SBIR awards (10 percent) totaling $289.3 million (12 percent).” They also found that during that same year WOSBs received “84 Phase I STTR awards (13 percent of all Phase I STTR awards) totaling $16.9 million (13 percent of total Phase I funding) and 26 Phase II STTR awards (11 percent) totaling $34.2 million (12 percent).”66 Through research published in 2020 as a collaboration with SBA’s Office of Investment and Innovation (OII), NWBC found that both the proportion of Phase I applications summited by and awards made to women-owned businesses has remained consistent over time, with both hovering between 13-15 percent. This aligns with findings that 13 percent of Principal Investigators leading SBIR/STTR Phase I awards were women and that women own 15 percent of firms in SBIR-funded industries in the general population.67 In other words, women’s rate of application and awards are roughly equal to each other as well as the number of women actually
participating in industries linked with the SBIR/STTR programs. Despite all things SBIR/STTR being equal for women in STEM, things are obviously not equal if women are only participating and receiving awards at a 15 percent rate when they make up 19 percent of all women owned business, and when women owned businesses account for around 40 percent of all businesses in the U.S.
These findings suggest that this might be more of a pipeline problem than a programmatic problem. If the future is indeed female, then women need to be visible in the present, both to resource partners and the next generation of women. It is worth noting that, according to that previous CRS report, “Assessments of agency SBIR and STTR programs by the National Academies and others have consistently found that federal agencies are not effectively increasing the number of women-owned or minority-owned small businesses applying for
the SBIR or STTR programs and that women-owned or minority-owned small businesses that have applied, in general, have been less successful in the application process.”68 A number of best practices uplifted in our previous research are focused around giving women a voice in the room, supporting mentorship, and showcasing successful female-led teams. Beyond increasing levels of representation on the participant side, success has also been found by increasing representation on the staffing side.69 Research has shown that agencies that value workforce diversity in terms of gender and ethnicity were more likely to award Phase II funding to women STEM entrepreneurs
Education and representation matter, and between the WE program and programs like GAFC and FAST that connect funding to local resource partners dedicated to bridging the innovation divide, the significance of education and representation in spurning innovation is not being ignored by agencies. It is also a key priority of the White House. As mentioned in the White House’s National Strategy on Gender Equity and Equality, “Given the importance of STEM skills to entrepreneurship and economic security, we will increase opportunities for diversity, equity, inclusion, and gender parity in the innovation economy by promoting entrepreneurial skills as part of STEM research, apprenticeship and training opportunities.” Also found in the strategy, “We also will expand opportunities to participate in STEM research and development projects in cultural centers, public labs, community colleges, and minority-serving institutions, and in partnership with federal agencies with significant STEM components.”
From the first spark of an idea to taking a product to market, women are innovative. The systems that support their innovation need to be innovative too. We heard from experts and stakeholders how this can happen. If the future is to be bright for all, women’s innovations will be a key contributor.
As a woman entrepreneur in STEM, I know that more women participating in STEM is greatly needed. That’s not just my perspective; society can benefit when women see STEM as a viable pathway for professional and entrepreneurial success. The inclusion of more women in STEM is essential for three main reasons. First, when women are not included in STEM fields, a rather large section of the scientific field, especially the medical field, remains partially mature.
Conditions and diseases identified as “women’s issues” are neglected from research, leading to catastrophic public health and economic outcomes. Nowhere is this more evident than in gynecology, where we are still barely scratching the surface of what good care means. This neglect has led to underinvestment in maternal health policies, and now the U.S. ranks 55th in the world in maternal mortality.i Increasing the number of women in medicine will lead to more research into women’s health and, overall, a healthier population and stronger economy
Second, today, we are bringing world-changing technology to life at breakneck speed. AI is at the very top of that list. However, the field of AI is grossly lacking in the representation of women. Not only does this lead to an increased risk of irresponsible innovation, but more importantly, we’re at risk of retaining anti-women and anti-minority biases in large models that have been trained on public data that is rife in misogynist and racist ideas.ii When these models are applied in healthcare, policing, and financial services, we perpetuate the ill-treatment of women and of other minorities. Without the strong voices of many women, we risk descending into dystopia.
Lastly, there are many more women in the STEM fields today than 40-50 years ago; however, there are not enough for it to become an obvious career choice for young girls today. Role models are incredibly important at this stage of their lives, as we want it to seem obvious that women are suited for and can excel in STEM. We must not only encourage young girls to enter STEM education, but we must also make a pointed effort to locate and highlight the achievements of teachers, researchers, engineers, and bankers, amongst other professions. That way, young girls see the breadth of opportunities that exist for women in STEM. I am only as successful as I am today because of mentors who helped me connect my potential to a number of pathways and possibilities. While I do my best to pay it forward, there are simply not enough women in STEM today to play this role for the next generation. Anyone should be able to see themselves as a future innovator, but for that to happen, everyone must be invested in innovating change to drive equity in STEM.
I cannot overemphasize the importance of de-gendering STEM. As the field that defines every aspect of our world and life, ensuring equal participation of women is the only thing that will lead to a society that benefits everyone.
Access to essential resources like leave, care, and broadband has the potential to elevate women’s entrepreneurship across the country. However, the gaps to accessing these resources can be wide, and post-pandemic, have in some cases widened. To maximize the opportunity presented by the recent small business boom, these gaps must be bridged, not just for women in business, but to support business owners across the country.
Business owners and their employees must be able to bring their best selves to work, and a major way for them to do that is to have access to paid family and medical leave. “The U.S. is the only industrialized nation without a minimum standard of paid family or medical leave, even though universal paid leave enjoys strong public support ... [Several] states and D.C. have paid leave requirements and some employers voluntarily offer these benefits, resulting in a patchwork of policies with varying degrees of generosity.”74 Notably, as part of its 2023 Policy Priorities NAWBO proposes that a bipartisan, national approach to providing Paid Family and Medical Leave (PMFL) is needed and could be beneficial to women small business owners, recognizing that many women business owners still may consider the costs too high.
It has been argued that, at one point or another, all individuals will need access to emergency family or medical leave and that providing for a national PFML solution would strengthen and make U.S. small businesses more competitive at home and abroad.76 As NAWBO expressed in their 2023 Policy Agenda, “[p]olicies that include support for self-employed individuals and working families through programs like paid family leave help address the economic needs of our business owners and workforce while at the same time helping ensure small business owners can compete against their larger counterparts.77 However, according to a recent [NAWBO] survey, only one in four women business owners offer paid leave. This may be linked to concerns about high costs, which is why there is broader support for a national opt-in leave policy.78 The Council is dedicated to ensuring that women business owners can offer competitive benefits and shape the workspaces they lead to fit their visions. The availability and education around PFML options must be sufficient to meet this desire, and we are encouraged to see the progress that has already been made in this area.
Speaking of access to leave and the care that would come with it, there is generally broad consensus and bipartisan agreement that the care economy national crisis is worsening, costing Americans jobs and business growth opportunities. In fact, according to some figures, it “is costing the U.S. economy … more than double what it was just five years ago, [about] $122 billion in 2022.” As Council Members have expressed, the lack of available, reliable, and affordable childand long-term care options continues to be felt more deeply in rural, tribal, and other historically underserved communities, many of which are also considered by and large “childcare deserts”.
Women business owners want to support their communities’ need for childcare, but there are nuances to the care industry that can prevent businesses from starting and growing. Care economy businesses face significant hurdles to bringing in sustained revenues due to the industry’s unique business model, as well as challenges associated with retaining skilled, reliable workers. Other issues include accessing affordable business financing to cover the costs of licensing, employee training, facility expansion and improvements, covering the
costs of outsourcing administrative functions or purchasing business management software programs, and providing livable wages for themselves and their employees. As such, the Council notes the importance of encouraging national policymakers to create new funding opportunities to help replicate, expand, and scale tested and proven local training model programs that may be replicated at the national level.
Achieving sustainable delivery of high-speed, reliable, and affordable broadband services in rural and other underserved communities is also critical to ensuring women’s full participation in entrepreneurship. As reported by the Washington Post this year, “women created about half of new U.S. businesses for the third year in a row in 2022, largely driven by a desire for flexibility and financial stability.”79 Nonetheless, not all have the tools or equal access to important resources that help sustain and grow a business. According to the White House, “more than 8.5 million households and small businesses are in areas where there is no high-speed internet infrastructure, and millions more struggle with limited or unreliable internet options.”
Council Members continue to underscore the importance of collecting accurate disaggregated data as well as disseminating improved mapping information to ensure the identification of gaps in service and that the impact of recent, historic investments is properly tracked and shared with the public. In July 2023, the White House, together with “the Department of Commerce announced funding for high-speed internet infrastructure deployment through the Broadband Equity Access and Deployment (BEAD) program, a $42.45 billion grant program created in the Bipartisan Infrastructure Law and administered by the Department of Commerce.”According to the Federal Communications Commission (FCC), at least “17.3 percent of rural Americans and 20.9 percent of tribal lands lack access to physical broadband.BEAD’s success will hinge in large part on identifying and reaching those communities”.
Beyond availability, however, ensuring full adoption of these services is necessary to maximizing community impact, requiring ongoing investments both at the state and national level.In short, as Council Members have reiterated throughout the year, without access to fast, reliable broadband services, women entrepreneurs and business owners will continue to lack opportunities to access diverse sources of funding as well as equitable access to entrepreneurial resources, training, and mentoring opportunities. Moreover, missing out on business expansion opportunities, including by leveraging e-commerce, likely means they will lack the ability to build generational wealth.
Let’s not just focus on disparities. Instead, let’s consider opportunities. When it comes to paid family and medical leave, being able to offer PFML lowers turnover costs for business owners and increases worker productivity.Ensuring women can participate in the labor force at an equal rate to men by providing services like childcare has the potential to “raise the nation’s GDP by 3.5%, generating over $500 billion annually.” Finally, according to one study, “the improvements in broadband adoption and speed across the United States over the course of the decade accounted for $1.3 trillion of the 2020 GDP, about $4,000 for each member of the population.”89,90 An investment in women business owners today through closing resource gaps could lead to substantial economic benefits down the road.
NWBC remains focused on tackling persistent barriers to women’s entrepreneurship impacting rural, tribal, and other historically underserved communities and addressing disparities in access to a wide range of services, including broadband and internet services. For instance, at the time of the writing of this report, this Council began conducting a landscape study on the state of rural and underserved women small business owners in the U.S. The learnings will further guide this Council on gaps in critical services and business development resources.
The study will also potentially help NWBC identify how women business owners in these communities are serving as de facto ecosystem builders, mentors, and in some instances even as business incubators by opening their businesses’ doors to promising women entrepreneurs. It is vital to better understand what role they play in supporting new WOSBs, as discussed in an NWBC panel during SBA’s 2023 Women’s Business Ownership Summit. As NWBC Executive Director Tené Dolphin noted during NWBC’s panel titled, “Empowering Women Entrepreneurs: Supporting Equity, Uplifting the Small Business Sisterhood,” BIPOC women, particularly postpandemic, “are creating their own ecosystems” and their own tables, however, the question remains as to how to leverage those communities to build coalitions that can bring about policy and systemic change.
Council Member Jaime Gloshay agreed during this panel discussion and noted that for indigenous women, it was important to “build communities for ourselves because we were not seeing ourselves [reflected] in those communities” at the local or state level or even in private, financial institutions. She also noted that indigenous women, for example, are trying to work within a system that “wasn’t designed for us or by us.” At the same time, they are trying to challenge and change that system so that it is more responsive to the needs of BIPOC women in traditionally underserved communities, which requires ecosystem change. This is important because women entrepreneurs of color play a significant role in “stabilizing our own families” but also our local economies. “It takes a village to raise a child. It also takes an ecosystem to build a business and [ensure that] business is fruitful, successful, and sustainable.” This requires access to holistic, tailored entrepreneurial development tools and resources and wraparound supports.
Some potential areas of improvement could begin by bolstering women business owners’ capacity on a day-to-day basis. Women business owners often wear all the hats, from being CEO, to human resources (HR), to payroll for their businesses. Council Members continue to consider the lack of access to funding for back-office support services and hiring skilled workers. This year, NWBC leveraged public engagement opportunities and informational meetings to learn more about how resource partners and other federal agencies can help support more women entrepreneurs as they work to build organizational capacity with accessible back-office support, as well as grant opportunities to skill up current and prospective employees.
It’s clear that supporting business growth is a universal challenge, and it is even more pressing for women in business. The basics, like finding the right people and tools, are essential for all, but we recognize that women may face unique obstacles. The Council is working to support resource partners that help all entrepreneurs build sustainable businesses, with a special emphasis on creating opportunities that empower women. It is about fostering economic growth that benefits everyone: business owners, families, communities, and employees alike.
Homing into resource partners in more detail, SBA’s Community Navigator Program could provide a model program and be further expanded to help support women business owners serving as ecosystem builders and/or incubators in their community.96 WBCs have long been essential connectors of business owners to resources and opportunity, having supported 86,691 clients, 3,946 new business starts, 24,396 capital transactions and the creation of 179,281 jobs in 2022.97 Oftentimes, local women-owned businesses serve as “trusted, culturally knowledgeable” organizations that can provide peer-to-peer or business-to-business assistance to other entrepreneurs in times of economic recovery or growth. These community anchors and local business owners could be further supported as ecosystem builders and community navigators, especially if they provide financial investments in a new business, industry-specific mentoring, or partnership in procurement contracting opportunities. It is not that the small business sisterhood is not there, it is that it needs the resources and investment to pay forward and pour into women business owners.
Council Members have consistently emphasized the need for increased coordination, including horizontally (across agencies, states, and localities) as well as vertically (from the national to local level and back up again). In terms of supporting horizontal coordination, Council Members have noted that one avenue for progress could be reestablishing the Interagency Committee on Women’s Business Enterprise (IACWBE). Reconstituting this group would once again bring together federal agencies to help identify and better coordinate federal resources and programs designed to specifically serve the needs of women business owners. In previous years, NWBC recommended that SBA and Congress consider reconvening IACWBE to increase federal coordination, reduce duplication and redundancies, identify opportunities for collaboration, and to close gaps.
Shifting to vertical coordination, the Council remains focused on ensuring that key entrepreneurial resources get into the hands of women entrepreneurs in historically underserved communities, including rural and tribal communities. Council Members have shared personal stories about how local municipalities and some small business resource partners have lacked the expertise,
network, or human capital to successfully connect local women business owners to WOSB certification assistance, federal business financing, and contracting opportunities, as well as entrepreneurial development resources. Additional concern has been raised about individual reports on lackluster services or notable differences in the treatment of female and male clients by some small business resource partner representatives. It is clear that with numerous resource partners, agencies, and state/local governments providing varying levels of support, siloing and isolation hurts business owners and those working to support them. Greater investment must be made into ensuring that no matter where entrepreneurs enter entrepreneurial ecosystems, support networks have the knowledge and coordination needed to get entrepreneurs where they need to go.
This issue was raised in last year’s annual report as well, and change has already been made. In June of 2023, the Biden-Harris Administration announced new measures to promote equitable
community development, which could be further leveraged to expand targeted outreach to underserved women entrepreneurs. Currently, the Interagency Community Investment Committee (ICIC)—a coalition of federal agencies that support economic growth in historically underserved communities—announced “a slate of new actions that will strengthen how federal community investment programs serve communities across the country that have historically lacked access to resources and capital including communities of color, low-income communities, rural areas, and tribal communities.” Together, “these critical actions build upon President Biden and Vice President Harris’s commitment to creating economic opportunity and advancing equity across the Federal Government
Further, by adopting a ‘no wrong door’ policy to ensure underserved small business owners have access to equitable assistance and information they need to grow and succeed, coordination efforts will be formally established. They can be further enhanced to help target assistance to women entrepreneurs. Currently, ICIC agencies support a network of over 1,000 field offices and resource partners dedicated to providing technical assistance and access to capital. As a part of this ‘no wrong door’ policy, this network will be provided with a repository of trainings and technical resources designed to bolster coordination across the network and across the country.101 ICIC agencies will be strongly positioned to leverage their nationwide network of field offices to customize information guides and encourage staff to deliver federal technical assistance programs in a manner that is culturally appropriate and tailored to fit the needs and schedules of underserved women entrepreneurs
While improving customer service, user experience, resource accessibility, and information coordination have clearly been prioritized by the Administration, the same should be the case for agencies, states, localities, and resource partners across the country. When a business owner enters through ‘no wrong door,’ they should also have clear next steps. This type of coordination is underway as SBA streamlines federal contracting, but clearer pipelines for business development can only be beneficial for business owners. It is also occurring at the local level through organizations like the Utah Women and Leadership Project and amongst agencies through the Rural Partners Network.103,104 The Council sees positive change already underway and looks forward to seeing agencies, states, localities, and resource partners continue to align their efforts to better support women entrepreneurs.
“I cannot stress enough the critical importance of focusing on the childcare business model that operates on incredibly thin margins and [the] financial literacy of its owners to ensure the sustainability and success of this vital industry. Childcare businesses play an indispensable role in nurturing our youngest generation and supporting working parents. However, to provide the
high-quality care and education that our children deserve, childcare providers must also thrive as businesses.” – Christy Dauer, Executive Director, North Dakota Women’s Business Center (NDWBC)
NDWBC has spoken and visited with North Dakota’s communities to better understand the challenges for women entrepreneurs, including working parents. In Horace, ND, a survey found that out of more than 200 survey participants, 76 were looking for an all-day childcare service provider. And “of that group, 64 reported being on a waitlist, with 23 on a one-year waitlist and 31 on a two-year waitlist. Additionally, 55 were on a waitlist for an after-school program, and 47% of the survey participants shared that the lack of childcare has affected their career.” In a presentation to the Council’s Inclusive Entrepreneurial Ecosystems Subcommittee, Christy emphasized that “Horace has grown significantly but childcare options have not kept up with the pace of the demand. There are not enough childcare workers and not enough options for parents.” Because of this, NDWBC heard from countless professionals within the state opting to have only one child, or none, given this current care economy landscape.
North Dakota’s state legislature addressed the availability, affordability, and quality of childcare as a barrier to workforce participation with the passage of a $65.6 million comprehensive package,
state House Bill 1540. Yet, NDWBC leadership noted a significant policy gap. There wasn’t any appropriation provided for technical training to increase the financial literacy and business acumen of childcare providers or to create and sustain networks of support for these business owners. Nonetheless, after visiting with several communities, such as Horace, and conducting interviews statewide, NDWBC and key community partners resolved to take matters into their own hands.
As Christy put it, “Our mission at NDWBC is to advocate for the well-being of both childcare providers and the children they serve.” She continued, “By promoting sound business practices and financial literacy among
childcare owners, we equip them to make informed decisions, manage costs effectively, and invest in their facilities and staff. This, in turn, translates into better learning environments for children, higher staff retention, and increased access to quality childcare services for families across the nation.”
NDWBC developed and executed a robust 10-week program, “Childcare Intensives & Workshops,” in partnership with Child Care Aware of North Dakota, specifically “designed to help small [care economy] business owners accelerate growth and make informed decisions.” Its fast-paced, virtual programming provides partnerships and ongoing networks of support, helping current business owners “re-think or re-imagine their current processes.” The support even continues beyond the programming with an app and resources from Child Care Aware of North Dakota that foster the long-term success of the business owner. The program’s success led to increased demand for additional “Childcare Intensives & Workshops.” Christy reported that “childcare professionals are seeking connection, financial understanding, and ideas for strategy.” NDWBC has created a program model that fulfills that need to a tee.
“Childcare is not just a service; it is an essential foundation for a child’s future success and drives thriving communities, and its sustainability must be a shared responsibility,” Christy added. “By bolstering the childcare business model and enhancing the financial literacy of childcare owners, we are building a stronger and more sustainable childcare industry that benefits everyone— from the smallest child in our care to the hardworking families relying on our services. Together, we can make a lasting impact, creating a brighter future for all.”