Women's History Month: Reflecting on the status of women
From Madeline La Framboise, a prominent businesswoman of Native American descent and successful fur trader of the US Northern Territories, to Madame La Tules, a legendary Mexican-American whose casino was considered the cultural heart of Sante Fe in the 1840’s, to Clara Brown, a former slave turned gold rush era entrepreneur, onto Madame C. J. Walker, the first black woman in America to become a millionaire, and Oprah Winfrey, who in 2003 became the first black American female billionaire, women of diverse backgrounds have prevailed through hardship and been actively involved in shaping the business landscape of this nation from very early on. Historically, these contributions have often been minimized, ignored, appropriated by men, or replaced by narratives that dishonor the sacrifices made by these enterprising women. In 1987, Congress proclaimed March to be National Women’s History Month to recognize and celebrate women’s worth. But does acknowledging the truth and value of past contributions in a month-long shout-out, mean that we now fully recognize and value current contributions and efforts by all women in society and in business today? Not really.
How did this month of recognition arise? It seems that significant events in women’s ongoing efforts to gain the same rights and privileges as men in America have occurred historically, in March - as far back as 1857 when female garment workers protested the poor factory conditions. Ironically while Congress acknowledged women’s abilities in March of 1987, it was not until the following October in 1988 that women were afforded some financial autonomy when H.R.5050, the Women’s Business Ownership Act was passed. Women were then legally permitted access to loans without a male co-signer. Nevertheless, despite this legal right, women still struggle to secure financial support 33 years later.
Such challenges are particularly pronounced for women of diverse backgrounds who face multiple biases associated with their gender and also discrimination related to their diverse character whether, it be race, ethnicity, sexuality, socioeconomic background, etc. Many of these women also face exclusion from employment thus “choose” to start their own businesses (As if a second option exists). Change is coming though not fast enough.
Over the last three decades, the number of women-owned businesses has grown at twice the rate of men-owned establishments. The latest US Census Bureau reports indicate that approximately 20% of all employer businesses nationwide are owned by women, however, only 25% of these are founded by women from diverse backgrounds. In a recent report on Black Women Business StartUps by the Federal Reserve Bank of Kansas City, it was revealed that black women-owned businesses are increasing in number at a much higher rate than that of any other group in the US.
According to the Census Bureau’s 2017 National Population Projections, women from diverse backgrounds will become the majority of all women in the US by 2060. This projection suggests that these women will make up a larger percentage of the US workforce and possess greater buying power across the economy. Who can best cater to the needs and concerns of this expanding market demographic than women of diverse backgrounds, themselves?
Notwithstanding this industriousness, black women, along with other women of diversity, still struggle to sustain their businesses in the competitive entrepreneurial environment long-term. This is not due to a lack of talent, creativity, nor drive, rather a result of challenges that these women face accessing resources and capital, essential for their businesses to thrive.
Why does such a disparity exist? The problem is systemic. There exists a pervasive underrepresentation of individuals who relate to these entrepreneurs and understand their specific interests throughout entrepreneurial support networks, from economic development organizations and accelerator programs to investors. Existing networks are not conventionally inclusive of women from diverse backgrounds due to slow social acceptance of women’s advancing status and the tendency for those in these networks to associate, align, and favor those like themselves. Such homophily has led to a buildup of uniform groups within the ecosystem that unintentionally (and intentionally) reinforce exclusionary practices. For example, in their analysis of VentureSource data, Harvard Business School researchers revealed that over the last three decades, there has been little change in the demographics represented by investors in venture capitalist firms across the nation. Less than 15% of all investors represent any ethnic diversity. Only 8.5% are women and less than 1% are women of African descent. Only 20% of the founders who secured investments from these investors represented any ethnic diversity while less than 10% were women. Again, women entrepreneurs of African descent were greatly underrepresented relative to their activity in the entrepreneurial space.
If inclusivity does not occur organically, then conscious inclusion should be employed to counter the destabilizing homophily in the ecosystem.
Several studies by reputable organizations, Mckinsey, Gallup, and Credit Suisse, clearly indicate that businesses with more diverse teams financially outperform their less diverse counterparts. There is clearly some convergence of factors related to the modified dynamics of a diversified group that heightens an organization’s probability to succeed. It makes good business sense to be more inclusive. Thus, it should make good economic sense for entrepreneurial support networks to also be more inclusive. Imagine what could be achieved should all women be as equitably included as their male colleagues in building our society and our economy.
So, this month, I recommend we all take a step towards conscious inclusivity, and get to know our female colleagues of diverse backgrounds in the entrepreneurial space. Authentic, respectful conversations always yield greater mutual understanding.