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THE FEMINIZATION OF ENTREPRENEURSHIP: A CASE FOR A WOMEN'S MODEL IN FOSTERING ECONOMIC DEVELOPMENT Barbara K. Mistick The National Education Center for Women in Business Seton Hill College, Greensburg, PA 15601 Office: (412) 830-4615 Home: (412) 361-3787 ABSTRACT This paper undertakes an examination of the societal structures and environmental changes that have influenced women to pursue business ownership. These factors will be considered to the extent that they may be determining how communities support and encourage job creation and economic expansion. The denouement of how women may be constrained in their perceived capabilities, and societal expectations for company performance will be supported with research that considers how overt discrimination influences perceptions and performance. Implications will suggest whether or not a "model" of women's entrepreneurship should be developed to guide local communities and educational institutions in their economic development efforts. INTRODUCTION Central to the theory of economic development is the process of job creation and subsequent revenue generation. No longer can the United States depend on large corporations to drive economic vitality in an age of deindustrialization. Economic renewal and growth is increasingly driven within the venue of small business formation and the industry clusters it supports and initiates. Small business, as defined by the United States Small Business Administration, is one which is independently owned and operated and not dominate in its field of operation, and contributes more proportionally to net job creation than any other sector. Yet there are often differences within the economic development community that place an emphasis on a relatively small group of fast growing firms in "new" industries where one can easily see quantified job growth statistics. As a result, the question that often arises is whether societal goals can best be served by focusing on a small group of fast growing, innovative companies or whether our resources and policy development should consider job creation on a more aggregate basis. In the aggregate, women-owned entrepreneurial ventures are of increasing importance in the socioeconomic development of the United States economy. As evidence, consider that the rate of women-owned business creation is two times that of men-owned businesses, that women-owned businesses comprise a 35 percent share of all small firms, that they generate $2.3 trillion dollars in annual revenue, and employ 18 million individuals (The State of Small Business 1994). (33) In fact, these firms provide employment to about 26 percent of all workers in the United States (NFWBO, 1995; U.S. Department of Labor, 1996). (28) (31) Female entrepreneurs are the fastest growing segment of the small business population, and they are increasingly being found in the more capital-intensive sectors such as mining, construction, and manufacturing, representing virtually every industry in the United States (The State of Small Business 1994). (33) The 1994 Survey of Business by Gender of Ownership illustrates that women
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are not only starting businesses in record numbers, but that they are also rapidly growing their businesses. The survey showed that 78.5 percent of women-owned firms had between one and nine employees, compared with 68.2 percent for all employer firms. Despite these impressive contributions, little is known about this population's potential contributions for job creation and sustained economic development. Theories abound that women's societal structures, orientation and indoctrination will influence how they pursue self-employment, business growth and job creations (Brush, 1994). (4) While some recent surveys perceive little difference between male and female business owners barriers to new venture creation (Good, 1994; Survey of Business by Gender of Ownership, 1994). (11) (30) Other studies have discovered that the rate on revenue growth, consideration for validity of the venture and access to delivery networks for women business owners is disparate when compared to male owned firms (Good, 1996). (12) The divergent results in studies such as these suggests that there is continuing need to separately study each of these populations. Clearly, in order for the United States to continue to fuel economic expansion in an age of deindustrialization, a more complete understanding of how differences between male and female business owners are addressed in the economic development delivery network will be required. The feminization of entrepreneurship warrants further clarification of how dispositional issues of work and family affect the manner in which women-owned enterprises will prosper (Liou & Aldrich, 1995). (19) The reshaping of our deindustrialized economic base and the emergence of women as key participants in stimulating economic growth suggest that we must understand the nature of this change. The denouement of how women may be constrained in their perceived capabilities, and societal expectations for company performance must be realistically explained and supported to foster greater levels of economic development. Understanding the extent to which the rate of entrepreneurial growth is positively or negatively influenced by structural, dispositional and psychological factors could further expand the potential of women-owned firms. Economic development practitioners need to employ development models that have better predictors for success. A women's motivation to achieve, the need to have ventures taken seriously, competitiveness and the role of family, self and community create a different economic development dynamic. The extent to which a "female" model exists for women to prosper in the evolution and growth of their enterprises needs to be understood so that obstacles to change can be addressed and a more complete range of options can be included in the development of economic development practices. This paper examines the following questions: (1) Are there differences in how women entrepreneurs are viewed in economic development? and (2) What factors contribute to creating a favorable entrepreneurial climate for women? In order to facilitate an understanding of women owned businesses, an initial review of the history and growth of women business owners will be undertaken. Finally, an alternative model for the women's entrepreneurial environments will be proposed along with suggestions for further areas of inquiry.
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THE ESTABLISHMENT OF WOMEN'S ECONOMIC PARTICIPATION "Why have things changed so much? The traditional family appears to have lost much of its economic base and thus much of its attraction for men and women in the modern, post industrial economy. Women have discovered that the they can in fact compete successfully in the marketplace and take care of others as well. ...they are becoming increasingly aware of the economic costs and risks of remaining in the home." Shirley Burggraf, The Feminine Economy & Economic Man (1997) (5) Most examinations of the influx of women into the labor market begin with World War II. The wartime propaganda directed at American women had two major effects: it created an image of women as dynamic social citizens and as active participants in economic life. Between 1940 and 1945, the proportion of women working for wages, three-fourths of whom were married, rose from 17.6 to 37 percent (Riley, 1995). (25) Propelled by high wages, women replaced male workers in ordnance plants, shipyards, aircraft factories, and steel mills. Since the work provided by women was essential to national security, questions about placing emphasis on work over traditional family roles were negated. Therefore, the provision of support services was seen as critical to a women's work performance and productivity. To assist women with children and day care needs, the Lanham Act of 1942 established Child Care Centers in forty-one states thereby allowing record numbers of women with small children to enter the workforce. Moreover, the Women's Bureau, the War Production Board, and the War Manpower Commission all endorsed the principle of equal pay. The National War Labor Board, in 1942, became the one agency that had the power to enforce equal pay for women who performed "work of the same quality and quantity" as male laborers. The ideological shift that drew women into the work force during World War II as full participants in the economic vitality of the country also provided a major shift away from the accepted social structure that suggested women belong at home while men go to work. The American secret was now out and, subsequently, in every economic cycle over the past twenty-five years women's job gains have dramatically out paced these of men. Consider that only a half century ago the entire workforce was composed of less than 26 percent women. Most were often employed in the support and caring occupations of teachers, nurses or secretaries (Bergman, 1986). (3) Today, however, women fare quite well, as their share of the total labor force continues to rise (Wall Street Journal, May 1997). (29) This trend should only continue as the Population impact of the "baby boom" years moves more women into prime work years. (Table 1) Table 1 =========================================================================== Population of the U.S. by Age and Sex, 1998 (in millions) ___________________________________________________________________________ Age Groups Female Male --------------------------------------------------------------------------Under 10 19,033 19,964
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Age 10-19
18,419
19,357
Age 20-29
18,012
18,326
Age 30-39
21,965
21,801
Age 40-49
19,964
19,387
Age 50-59
12,178
12,316
Age 60-64
5,284
4,711
Age 65-74
10,337
8,320
75 and over 9,668 5,575 =========================================================================== Source: U.S. Bureau of the Census As of 1995 the 58 million women who are employed account for 46 percent of total United States labor force participants (U.S. Department of Labor, 1996). (31) Even more significant is that 6 out of every 10 women, age sixteen and over are labor force participants, with 70 percent labor force participation of women between the ages of 20 and 54. (Table 2) While divorced women continue to have higher workplace participation rates than other marital classifications, increases continue in all categories. (Table 3). Women are not only the clear majority of workers, they are also increasingly the primary wage earners of their families' income. While men have historically been in charge of providing the family income, according to the U.S. Bureau of the Census, slightly more than 1 in 5 (22 percent) women earned more than their husbands in March of each of the years 1991 through 1995. [1] Women are not only more likely to work outside the home today than in the past, they are also spending more time at work than in earlier years. Increasingly, women are working both full-time and year-round, partly due to economic necessity, and proportionally due to the demand and supply of occupations that require full-time and year-round work. However, gender stereotypes continue to affect the movement of women from traditional work patterns. Gatekeepers have even managed to maintain a discourse that emphasizes traditional female career paths in schools and the print and visual media (Aldrich & Liou, 1996). (1) Therefore, despite significant gains by women in workforce participation rates and increasing responsibility for family income, the majority of women are still employed in technical, sales, and clerical occupations. (Table 4) Table 2 =========================================================================== Labor Force Participation Rates for Women By Age Groups, 1995 ___________________________________________________________________________ Age Groups Participation Rate --------------------------------------------------------------------------1970 1980 1990 1995 --------------------------------------------------------------------------All Women 43.3 51.5 57.5 58.9 16 to 19
44.0
52.9
51.8
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20-24
57.7
68.9
71.8
70.3
25-34
45.0
65.5
73.6
74.9
35-44
51.5
65.5
76.5
77.2
44-54
54.4
59.9
71.2
74.4
55-65
43.0
41.3
45.3
49.2
65 and over 9.7 8.1 8.7 8.8 =========================================================================== Source: U.S. Department of Labor, Bureau of Labor Statistics, Employment & Earnings, January 1996 Table 3 =========================================================================== Female Labor Force Participation, by Marital Status ___________________________________________________________________________ Marital Status Participation Rate --------------------------------------------------------------------------All Women 58.9 Never Married
65.5
Married, spouse present
61.1
Married, spouse absent
62.0
Divorced
73.7
Widowed 17.5 =========================================================================== Source: U.S. Department of Labor, Bureau of Labor Statistics, March 1995 Table 4 =========================================================================== Employed Women by Occupational Group, (in millions) ___________________________________________________________________________ Occupation No. Employed --------------------------------------------------------------------------Total 57.5 Management and Professional Specialty
16.9
Technical, sales and administrative support
24.1
Service Occupations
10.2
Precision Production, craft and repair
1.2
Operators, fabricators, and laborers
4.4
Farming, forestry, and fishing .7 =========================================================================== Source: U.S. Department of Labor, Bureau of Labor Statistics, Employment & Earnings, January 1996 While economic necessity brought many women into the workforce,
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the prevailing family value still held that men were "heads of the households", while women were to marry, have children and stay at home (Powell, 1988). (24) The changing dynamic that occurred during the 1940s created a sense of economic life for women that has only been reinforced over the last fifty years by a shifting of our underlying industrial economy to a deindustrialized state. The feminization of our service-based economy has produced a workforce paradigm shift so that, within the next millennium, women will outnumber men as labor force participants. The trend line in statistical tables for women will continue to increase as long as the reengineered workplace continues to reduce real wages and family stability becomes more dependent on economic participation by all members of the family. Women have moved from being marginal labor force participants--working for a few years before starting a family and, perhaps, returning after their children were grown--to being full-fledged labor mark-et participants. The changing economy that women face in this new millennium will place them at the forefront of public policy debates. The realities of women's lives will require that they become majority participants in putting food on the table, determining how to obtain good education for their children and adequate health coverage for the family unit. ENTREPRENEURIAL MOVEMENT:
CHANGING SOCIETAL STRUCTURES
"Until economic freedom is attained for everybody, there can be no real freedom for anybody." SuZanne LaFollette, Concerning Women (1926) Educational attainment is one of the most significant factors in determining the type and level of participation for women in the paid labor force. Since education tends to increase workforce activity, the movement of female college graduates to complete study in fields such as engineering, sciences and business, created opportunities for women to advance in management, professional specialties and business occupations. These environmental changes are preparing future generations of young women to follow professional careers in biological sciences, business and engineering. (Table 5) These factors, combined with increased opportunities for women, have created a work force with expanded female skills for traditionally male-dominated occupations. (Brush, 1994) (4) Table 5 =========================================================================== Degrees Awarded to Women as a Percentage of All Degrees Awarded ___________________________________________________________________________ Field 1959/60 1969/70 1979/80 1989/90 1992/93 --------------------------------------------------------------------------Biological Sciences 25.2 27.8 42.1 50.7 50.5 Business
.4
8.7
33.7
46.7
44.2
Computer & Info Science [1]
--
13.6
30.2
30.1
27.5
71.1
75.0
73.8
78.1
77.1
Education
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Engineering
0.4
0.8
9.3
13.8
14.2
62.3
66.9
66.1
67.9
65.6
--
77.1
82.2
84.3
81.7
Mathematics
27.2
37.4
42.3
46.5
44.2
Physical Sciences
12.5
13.6
23.7
31.2
29.1
Psychology
40.8
43.3
63.3
71.5
72.5
--
36.8
43.6
44.2
46.0
English Health Professions [1]
Social Science [1]
Visual & performing Arts [1] -59.7 63.2 61.4 60.1 =========================================================================== [1] Data are for 1970/71 rather than 1969/70 Source: National Center for Education Statistics, 1994 Over the 1974-94 period, overall job growth was fastest among managers and professionals. Women moved into these specialty occupations in great numbers. In the 20-year period between 1974 and 1994, the share of women that held managerial occupations had doubled to seven million. Women, in 1994, accounted for between 40 and 60 percent of employees in nearly every managerial job. Table 6 =========================================================================== Employed person by Occupation and sex, 1974 and 1994 Annual Averages ___________________________________________________________________________ Occupation Men Women --------------------------------------------------------------------------1974 1994 | 1974 1994 --------------------------------------------------------------------------Total Employed (thousands) 53,024 66,050 | 33,769 56,610 | Percent 100.0 100.0 | 100.0 100.0 | Managerial and professional | specialty 22.0 26.5 | 17.6 28.7 | Executive, Admin., and managerial 12.0 14.0 | 5.0 12.4 | Professional specialty 9.9 12.5 | 12.6 16.3 | Technical, sales and Admin. | Support 18.5 20.0 | 45.1 42.4 | Technicians and related support 2.4 2.8 | 2.5 3.6 | Sales occupations 10.1 11.4 | 11.0 12.8 | Administrative support, including | clerical 6.0 5.9 | 31.6 26.0 | Service Occupations 8.1 10.3 | 20.6 17.8 | Private household .1 (.05) | 3.6 1.4
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| | .3 .7 | Service, except private | household & protection 5.8 7.4 | 16.8 15.7 | Precision production, craft and | repair 19.7 18.4 | 1.8 2.2 | Operators, fabricators and | laborers 25.4 20.4 | 13.3 7.7 | Machine operators, assemblers & | inspectors 10.4 7.2 | 10.3 5.2 | Transportation and material | moving 7.6 7.0 | .6 .9 | Handlers, equipment cleaners, | helpers, laborers 7.4 6.1 | 2.4 1.6 | Farming, forestry and fishing 6.2 4.4 | 1.6 1.2 | =========================================================================== Source: U.S. Dept. Of Labor, Bureau of Labor Statistics, 1996 Protective service
2.3
2.5
Although movement by women into higher-paying occupations and increases in educational attainment and work experience contributed to the lessening of the earnings gap, women's wages did not keep pace with comparable male rates. Although the earnings gap between women and men declined substantially over the 1979 to 1994 period, women who worked full time earned only seventy-six percent as much as men. Since colonial times, women have often pursued a variety of business activities. During the 1660s, Margaret Philipse of New York was an exporter and shipper of furs; Alice Thomas was known for operating a profitable brew house in Boston. Quaker women on Nantucket Island were known to be shrewd traders, and it was predicted that between 1720 and 1770, women ran 10 percent of the businesses in New England (Riley, 1995). (25) Many women in this decade also have chosen self-employment. Between 1974 and 1994, self-employment among women expanded from 1.6 to 3.9 million. While most women worked in personal service occupations, self-employed men were more concentrated in craft occupations. An examination of earnings data from March, 1994 found that men who were self-employed earned as much or more than those who worked in wage and salary jobs, while self-employed women earned much less than their wage and salary counterparts (Devine, 1994). (8) Further studies commissioned by the Small Business Administration's Office of Advocacy concluded that, on average, self-employed women earn 47.9 percent less than selfemployed men (Lusgarten, 1994). (21) Along with changes in workforce participation and selfemployment, the role of women in society also changed. Prior to the large-scale entry of women into the market labor force and into more competitive jobs, it was the role of women to support men's economic efforts and not compete with them. The 1963
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publication of Betty Friedan's Feminine Mystique supported a growing feminist movement that challenged the connections between social structure and personal life. Although the first Presidential Commission on The Status of Women called by President John F. Kennedy in 1961 highlighted a women's agenda that focused on the economic life and well-being of families, the mood in America in the 1960s demanded a more focused approach to societal change. "Social movement" organizations influenced several other regulatory events. In 1964 the Civil Rights Act was passed prohibiting discrimination based on gender. The Equal Credit Opportunity Act in 1975 and the Affirmative Action Act in 1978 legislated changes that assisted women to overcome barriers they faced in business ownership. A combination of both external factors--economic expansion, increasing labor force participation, occupational diversity and educational attainment--and a maturing female population created the momentum necessary to move women into business ownership. Women were drawn to entrepreneurship when children left home, or when they identified an opportunity to turn a hobby or special talent into a viable business (Hisrich & Brush, 1986). (15) Job satisfaction, independence and a desire to accomplish something are most frequently cited motives for business ownership (Hisfich & Brush, 1986). (15) Growing dissatisfaction within the workplace combined with the slow pace of advancement seen in corporations, otherwise known as the "glass ceiling," spurred the rate of female entrepreneurship from ownership of 4.48 million firms in 1987 to 7.95 million firms in 1996 (US Bureau of the Census, 1996; NFWBO, 1995) (Table 7). (32) (28) Corresponding increases have also been seen in the provision of jobs and the gross revenues of these ventures. Women owned firms, although generally younger and smaller, are now found in all industrial categories (Table 8). Table 7 =========================================================================== Impact of Women Owned Firms ___________________________________________________________________________ Year Number of Firms Revenues Number of Employees --------------------------------------------------------------------------1982 2,612,621 98,291,513 1,354,588 1987
4,114,787
278,138,117
3,102,685
1991
5,888,883
642,484,352
6,252,029
1996 7,950,000 2,228,000,000 18,000,000 =========================================================================== Source: NFWBO and U.S. Bureau of the Census More significant to economic development and job creation than the aggregate total of firms owned by women, is the subset of firms with employees. According to the 1994 Survey of Business by Gender of Ownership, women-owned firms with employees increased from 12 percent of all employer businesses established before 1980, to 18.5 percent of firms established between 1991 and 1994. The survey showed that 78.5 percent of women owned
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firms had between one and nine employees, compared with 68.2 percent for all employer firms. This is the first time that women-owned firms have been recognized for the significant contributions they are making toward job creation. While womenowned firms "with employees" represented less than 20 percent of the total category, they still accounted for almost 90 percent of the sales and receipts by, women-owned firms. Yet, of the roughly 4.8 million employer businesses in the United States, only 15.9 percent were women-owned and an additional 18.7 percent of businesses shared ownership between women and men. Table 8 =========================================================================== Industry Distribution of Women-Owned Firms ___________________________________________________________________________ Industry Percentage of Industry 1992 Percentage of Industry 1994 --------------------------------------------------------------------------Services 51.6% 42.2% Retail Trade
18.9%
26.7%
FIRE
10.4%
7.3%
Goods-Producing
8.7%
5.1%
NEC
4.5%
1.1%
Wholesale Trade
3.3%
6.1%
TCPU 2.6% 3.2% =========================================================================== Source: NFWBO and U. S. Bureau of the Census 1996 Note:
FIRE = Finance/Insurance/Real Estate NEC = Not Elsewhere Classified TCPU = Transportation/Communications/Public Utilities ARE THERE DIFFERENCES IN HOW WOMEN ENTREPRENEURS ARE VIEWED IN ECONOMIC DEVELOPMENT?
While the entrepreneurial movement fueled the growth and development of venture capital and supported the emergence of new industries, little attention had been focused on the expanding growth of women owned businesses as a separate industry classification. That situation changed in 1988 when the United States Congress passed the Women's Business Ownership Act which provided as follows: ... women, as a group, are subjected to discrimination in entrepreneurial ventures due to their gender...such discrimination takes many overt and subtle forms adversely impacting the ability to raise or secure capital...and to capture market opportunities. It is in the national interest to expeditiously remove discriminatory barriers to the creation and development of small business concerns owned and controlled by women. The removal of such barriers is essential to provide a fair opportunity for full participation in the free enterprise system by women and to further increase
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the economic vitality of the Nation (United States House of Representatives Committee on Small Business Report, 1988). While the act acknowledges the importance of women-owned businesses in the national economy, it falls short on substantive results. Although the Act's purpose was to stimulate the United States economy by aiding and encouraging the growth and development of small business concerns owned and controlled by women, the model used to deliver services was a standard business formation model (1) with minimal provisions for technical assistance (2) no recognition of the structural needs of work and family and (3) little emphasis on the development of community understanding for the underpinnings of future economic vitality. Despite the passage of the Women's Business Ownership Act, the primary focus of the Small Business Administration has continued to be the operation of a wide variety of loan guarantee programs. A recent pilot study to examine one such program--the 7 (a) Loan Fund--found that, on average, women-owned businesses were paying more for comparable loans (up to an 80 basis point differential) than male owned businesses in similar industry clusters (Good, 1997). (13) Disparate loan rates are a clear signal that provisions for technical assistance must be included in a women's business model. Within the past decade, women have steadfastly identified three factors as influencing the creation or acting as barriers to their businesses. The first factor is the perception that ventures started by women are not taken seriously in terms of community impact. This perception was supported by studies commissioned by the Small Business Administration Office of Advocacy which found that women's firms reported earnings that were 47.9 percent less than men's earnings (Lusgarten, 1994). (21) Citing these results, government policy experts offered a view of women-owned business as part-time ventures that intentionally limited growth. The implied suggestion is that women have not entered into the venture expecting to grow and expand the venture and therefore will not contribute to job creation and revenue generation in an economic marketplace that counts these numbers on a monthly basis. Popular media sources continue to suggest that one of the primary routes women travel to assume control of large corporations continues to be the death of a spouse or a father, when no male siblings are present (Working Women, 1995). (2) However, the 1994 Survey by Gender of Ownership, based on the 1992 United States Census gave us a different view when women-owned firms with employees were separated--out not only did they perform better than male-owned businesses, they also bad higher employment rates and lower failure rates. All of this has occurred against a backdrop in which females are given little opportunity to take risks (Cockburn, 1987) (7) and, in fact, are usually taught to be dependent on the father (Lipman, 1984). (20) Males, in contrast, are taught to be self-reliant and self-assertive (Lipman, 1984). (20) The second and most visible economic development issue raised by women was access to capital. While much of the focus of effort in the 1990s has called for greater access to capital for womenowned businesses, recent results in studies conducted by Dun & Bradstreet Information Services, The National Foundation for
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Women Business Owners and the United States Department of Commerce suggest that access to capital is now as available to women as it is to men. The findings of these surveys has been further supported by "access to credit" surveys that have found that gender is not a factor in credit repayment rates and confirms that women-owned business are as fiscally sound and credit worthy as other businesses (NECWB & DBIS and NFWBO, 1995). (27) Further discounting access to credit barriers were two recent examples: Wells Fargo Bank unveiled a $1 billion women's loan program in alliance with The National Association of Women Business Owners and the Bank of America unofficially earmarked one-third of a $10 billion loan commitment for women-owned businesses in ten western states. In light of the market competitiveness of these products, women-owned businesses have subscribed in record numbers. Nevertheless, women entrepreneurs still face difficulties in accessing growth capital, gaining high levels of management experience and entering non-traditional sectors. Since studies confirm that women business owners are traditionally undercapitalized and more risk-adverse than their male counterparts, it would suggest that educational and technical assistance programs, as a pre-requisite to lending, would enable women to more accurately predict appropriate loan levels. The third factor identified by women is a need for recognition of the role that work and family hold in their lives. Women view their entrepreneurial ventures in a broader community context. In order for women to juggle the many roles they maintain in society, they must have flexibility in their lives. Studies examining business performance, financial assistance and individual characteristics of women business owners have all agreed that women are similar to men across many psychological and demographic characteristics that drive business creation. Examples are the need for independence and the desire for job satisfaction(Hisrich & Brush,1983). (16) Still, socioeconomic factors that support work and family issues--such as validation for non-traditional female roles and how support within family, school and society affects women--have not been fully examined. Additionally, the manner in which economic development practitioners formalize the encouragement of entrepreneurial traits impacts public acceptance of women entrepreneurs as successful role models. This seems to be inhibiting the development of support networks for women. Most studies in this area have been preliminary in scope, only developing theory and not substantiating actual practice. The overall representation in the community for women continues to be that they are not involved in policy development, not credited for initiation of the venture and not taken seriously. WHAT FACTORS CONTRIBUTE TO CREATING A FAVORABLE ENTREPRENEURIAL CLIMATE FOR WOMEN? Using a definition of "socioeconomic" as differentiated from neoclassical economics-that a woman's decision to become an entrepreneur is less individually-based and more dependent on decisions and actions embedded in the societal system surrounding her-would account for the need for validation from the community (Granovetter, 1985). (14) Inclusion in the planning process leads
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to a perception of the seriousness of the venture which leads to the support and mentorship which leads to success for women-owned businesses. Inclusion and mentorship should naturally follow the chances in societal factors that have also created wider acceptance of the proposition that women will have careers as business owners (Brush, 1994). (4) Since a woman's definition of success is to define herself in terms of her relationship toward others (Kohlberg, 1981; Gilligan, 1982), (18) (10) the perception within the firm is as important as the perception outside the firm. Some firms spend excess time on employee surveys--wanting all employees to be satisfied. They have difficulty accepting any imbalance within the organization. This definition of "self" affirms the female role of nurturer and peacemaker (Salganicoff, 1990; Powell, 1988; Lipman,1984; Chodorow, 1978; and Miller, 1976). (26) (24) (20) (6) (22) When women define themselves in this manner, along with the social expectation that they provide care for their families, a socioeconomic aura envelops their economic environment. This role is initially created by family socialization and then fostered in the school environment. The family role results from the choices made by women as a result of their gender socialization. Such socialization is the result of a lifelong development of attitudes, skills, behaviors and values (Lipman, 19 84). (20) This may be why women rated themselves higher than men on dealing with people (Hisrich, Brush and Good 1997). (17) Furthermore, while goals in business ownership were similar in terms of achievement and independence, women rated economic necessity and recognition significantly more important than their male counterparts (Hisrich, Brush and Good, 1997). (17) AN ALTERNATIVE MODEL FOR WOMEN'S ECONOMIC DEVELOPMENT Before the industrial revolution in the United States in the 1800s, work and family happened under the same roof. People did not go to work and then come home, but instead worked and had home fife all together. With industrialization, the work element was removed from the home, thereby separating the work and the family unit into two distinct realms. Current deindustrialization has put the focus on a service-based economy. The resulting paradigm shift has created workforce participation rates for women that are as high as 60 percent. Women have also turned to entrepreneurship in record numbers. Women have increased their percentage share of business ownership from 12 percent of all businesses started before 1980, to 18.5 percent of those started since 1990. With their expanding role, questions concerning the life span of women-owned businesses have arisen. However, 75 percent remain in business after three years. Furthermore, the percentage of women-owned firms that will expand between 1995 and 1998 is projected to be 43.2 percent, which is consistent with male-owned firms (Survey by Gender of Ownership, 1994). (30) Also, recent child care studies have removed many of the concerns surrounding the socialization of children, thus supporting the expanded role
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of women in the economy. The New Model described herein is a specific application for economic development and suggests that the practices employed in economic development have not taken into account the social structures that have injected women into entrepreneurship. Social structures, as defined within Asocial feminism, support the proposition that neglecting the "work and family" issue will limit the socialization of women (Fisher, Reuber & Dyke, 1993). (9) When referred to as the "dispositional perspective" (Liou & Aldrich. 1995), (19) it argues that the socialization experiences of men and women result in different self-perceptions, motivations, and belief structures. Women think about moral issues in terms of how they affect the relationships involved; men watch the bottom line (Gilligan, 1982). (10) Men are more concerned with making money; women are more concerned with having harmonious relationships. This application applies not just to work and family but, also, to how women operate and grow their businesses. This indicates that, without recognition of the socioeconomic factors affecting women business owners, women may be constrained in their capabilities to grow businesses and fully participate in job creation. Women are proving themselves as a skilled, flexible workforce-creating tremendous value in a changing marketplace. If the social structure concerns of women are addressed, an environment of empowerment would be encouraged. Women who feel empowered would then be more likely to become leaders in their social and economic communities. The differential between business creation and job creation will be nurtured. Since beliefs and attitudes held about the appropriate roles and job assignments perpetuate gender stratification in the workplace, we must look beyond that to meet the economic needs of women. These kinds of changes are systemic and require the passage of many generations. If women are to enjoy more economic options, society must meet the opportunity straight on and consider "social structure" issues, like work & family, in the model for venture expansion. CONCLUSIONS AND IMPLICATIONS Most of the models for "new venture" creation and support have been based on the needs as identified for male entrepreneurs. The theory offered in this paper suggests that a model to encourage women's entrepreneurship needs to consider the social structures that define women's lives. Socioeconomic conditions are encompassed in all aspects of the "new venture" growth and expansion. Surveys of businesses by gender indicate that while difference in access to credit and performance of businesses is relatively similar between genders, women are more likely to consider socioeconomic conditions in the planning process. Women's entrepreneurship is expected to increase with projections that women-owned businesses will comprise 40 percent of all small businesses in the near future (Small Business in the Year 2005. 1993). (23) Future projections suggest that three of every five women entering the workforce will start and own a company. Furthermore, the evolution from business ownership without employees to business ownership with employees suggests that
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tremendous potential exist for further growth and expansion by existing women-owned firms. If properly nurtured this trend will have a significant impact on business, the family and society. However, as we see, there are still serious deficits in our knowledge of women entrepreneurs and the manner in which the socioeconomic structure affects the way they operate their businesses. Research, to date, has been disproportional to women's participation in the economy and has limited our ability to understand fully the factors that influence women entrepreneurs to expand their businesses. By studying women entrepreneurs separately, we can more fully understand particular socioeconomic factors that facilitate or inhibit growth and performance. We must identify the areas in which inequalities and obstacles to growth are unique to women-owned businesses, and where they are not. Using the following model as a guide, economic development practitioners can focus on women's entrepreneurship issues from a perspective that respects women's unique approach, ultimately, this will enhance the success of women entrepreneurs. This material is based upon work funded by the U. S. Small Business Administration under Grant Number SBAHQ-97-0001. Any opinions or findings and conclusions or recommendations expressed in this publication are those of the author and do not necessarily reflect the views of the U. S. Small Business Administration. FOOTNOTES The Establishment of Women's Economic Participation 1. U.S. Bureau of the Census data (Current Population Reports and unpublished data, Income Statistics) provided by Ida L. Castro, Director-designate, Office of the Secretary, Women's Bureau, U.S. Department of Labor. REFERENCES [1] Aldrich, H. And Liou, N., (1996). The Invisible (women) Entrepreneur: Lack of Attention to Women Owners in the Academic, Business and Popular Press, paper presented at the National Academy of Management Meetings, Entrepreneurship Division, Cincinnati, Ohio 1996 [2] Bamford, Janet, "The Working Woman, American Top 50 Business Owners", Working Woman, May 1995 [3] Bergman, B., The Economic Emergence of Women, Basics Books, New York [4] Brush, Candida G., (1994). Women-Owned Businesses: The State of our Knowledge and Issue for the Future, Prepared for the White House Research Study: Prospects for Small Businesses and Entrepreneurship into the Twenty-First Century, Dec, 1994 [5] Burggraf, Shirley P, The Feminine Economy & Economic Man, Addison-Wesley Publishing Company, Inc. 1997 [6] Chodorow, C. Reproduction Mothering, California, University
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of California Press, 1978 [7] Cockburn, C. Two Track Training, London, MacMillan, 1987 [8] Devine, Theresa J., "Characteristics of self-employed women in the United States, Monthly Labor Review. pp 20-34, March 1994 [9] Fisher, E., Reuber R & Dyke, L. "A Theoretical Overview and Extension of Research on Sex, Gender and Entrepreneurship," Journal of Business Venturing, 8: 2 pp 151-168, 1993 [10] Gilligan, C., In a Difference Voice: Psychological Theory and Women's Development, Cambridge, MA: Harvard University Press 1982 [11] Good, D. (1994) Women Business Owners and Their Profession Advisors: Understanding the Needs of the Marketplace, working paper, The National Education Center for Women in Business, 1994 [12] Good. D. (1996) Managerial Styles and Strategies: A Comparative Perspective, working paper, The National Education Center for Women in Business, 1996 [13] Good, D. (1997) The Nagging Issue of Accessibility to Credit: An Assessment of a Popular Small Business Loan Program, paper presented at The Babson College-Kaufmann Foundation Entrepreneurship Research Conference, Boston, 1997 [14] Granovetter, M., "Economic action and social structure: The Problem of embeddedness, " American Journal of Sociology, 91: 481510, 1985 [15] Hisrich, R. D. And Brush, C. G., The Woman Entrepreneur: Starting, Financing and Managing a Successful New Business, Boston, MA Lexington Books 1986 [16] Hisrich, R. D. And Brush, C. G., "The Woman Entrepreneur: Implications of Family, Educational and Occupational Experience", Frontiers in Entrepreneurship Research, Babson College April, pp 255-270, 1983 [17] Hisrich, R. D., Brush, C. G., and Good D. (1997) Some Preliminary Findings on Performance in Entrepreneurial Ventures: Does Gender Matter? paper presented at The Babson CollegeKaufmann Foundation Entrepreneurship Research Conference, Boston, 1997 [18] Kohlberg, L. The Philosophy of Moral Development. Harper & Row, 1981
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[19] Liou, N. And Aldrich, H., (1995) Woman Entrepreneurs: Is there a Gender-based Relational Competence?, paper presented at the American Sociological Association Meetings, Washington DC August 1995 [20] Lipman, J. Gender Roles and Power, New Jersey: Hall, 1984
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[21] Lusgarten, S., "Business Ownership as an Employment Opportunity for Women", Small Business Administration, 8035-A-93
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1994 [22] Miller, J. Toward a Psychology of Women, Boston, Beacon Press, 1976 [23] Office of Economic Research, Small Business in the Year 2005, U.S. Small Business Administration, U. S. Government Printing Office 1993 [24] Powell, G. Women and Men in Management, California, Sage, 1988 [25] Riley, Glenda, Inventing the American Woman: An Inclusive History, 2nd ed., Vol 1: to 1877, Harlin Davidson, Inc., 1995 [26] Salganicoff, M. "Women in Family Businesses: Challenges and Opportunities," Family Business Review, Volume III, Summer 1990 Jossey-Bass, Inc. [27] The National Education Center for Women in Business and The National Foundation for Women Business Owners and Dun & Bradstreet Information Services, Toward Equal Access: The Fiscal Strength and Creditworthiness of Women-Owned Enterprises, The National Education Center for Women in Business (1995) [28] The National Foundation for Women Business Owners and Dun & Bradstreet Information Services, Women-Owned Businesses: Breaking The Boundaries, April 1995 [29] The Wall Street Journal, U.S. Economy's Report Card "Not All A's", Monday, May 5, 1997 [30] United States Department of Commerce, The 1994 Survey of Business by Gender of Ownership, Bureau of Census, U.S. Government Printing Office 1994 [31] U.S. Department of Labor, Women's Bureau Bulletin #96-2, U.S. Government Printing Office Washington DC (1996) [32] U.S. Department of Labor, Women in Management, Women's Bureau, U.S. Government Printing Office, Washington DC, November 1996 [33] U.S. Government Printing Office, The State of Small Business, Washington DC, 1995
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