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Steering Our Economy to Health
Perspectives of Women Business Owners

 Mexico City 2010   

Shaila Rao Mistry


Perspectives and Parameters  

Our discussions on current economic status under this present economic crisis instantly elicit tremendous reactions from all sectors and from all parts of the globe. In order to make a manageable presentation of data, analysis and key trends we have approached the subject by delineating two phases of discussion. First the macro view which looks at the state of the US economy, present a profile of small business, and then look at perspectives of real entrepreneurs who contribute to the GNP. The second phase is to examine women owned businesses perspectives and provide a profile, contributions and success of women in business, discuss their role as decision makers. Finally conclude with the question is there parity for women entrepreneurs?

This paper is presenting these issues through the lens of entrepreneurship in the US and focusing on small business and particularly women business owners.  We acknowledge, of course, the global audience with a diverse set of experiences and accord due respect to all. Having stated this we turn to some rhetoric but obvious questions, such as the one that asks � if indeed things as bad as we are hearing �. Yes, indeed they are! Our leaders in finance, banking and politics have indeed messed up big time. Their decisions have affected every economy, industry, every company and every individual. We have many questions for President Obama, and indeed it would be interesting to have a lively discussion on this alone. Finally, we do not intend this to be a purely economics paper but an overview of the contributions of women to the economy. I will be doing this in two phases.

Small Businesses Is Big Business

All businesses are not the same. Unfortunately when we speak of business we immediately conjure up the large face less corporations and image the bad things that have occurred. We seldom think of the small business.

Small Business is not faceless: they are mom and pop outfits, families and husband and wife teams. They are real people who have invested all they have to work hard and long hours: doing extraordinary things for the economy. They believe in what they are doing. They are not about profit mongering. Although profit is essential because it leads to more investment in the business which then creates more jobs!

Small businesses revitalize neighborhoods, create jobs, and encourage economic growth. They contribute in many ways to schools, to girl scouts and fundraise for cancer research and support sports and music and other community events, to name a few . They are the quiet stalwarts that are the backbone of the economy. But even more important, they are special avenues for women like you and I to fulfill our dreams and follow our passions.

Definition of a Small Business: Majority of small business have less than 10 employees with a significant number under 50 employees. Yet small businesses are big businesses with a combined contribution that represents half the GDP.  

Profile of Small business in US 2008: 29.6 million small firms

�    Employed over 50 % of all private sector employees.
�    Paid 44 % of total U.S. private payroll.
�    Create over 50 % of the non farm GDP.
�    Hired 40 % of scientists, engineers, IT
�    Made up 97.3 % of all identified exporters
�    Produce 13 times more patents per employee than large patenting firms; these patents are twice as likely to be cited among top1 %

Creating new jobs

Of the 119.9 mill jobs in private sector in 2006

60. 2 mill employed by small firms

59.7 mill employed by large firms

20.6 mill employed by firms with fewer than 20 employees

         64 % of net jobs were created by small businesses = 14.5 m of  22.5 m.

Small the businesses are indeed half the economy.

 Significance of Women Entrepreneurs

Within this context women have some very impressive numbers    

10.1 million Firms are woman owned representing 34 % of all firms

13 million people are employed by women representing 21 % of jobs

$1.9 trillion sales generated by women entrepreneurs representing 14 % of all sales

Of all women owned businesses

75 % of women-owned businesses are majority 51 % or more

7.2 million Firms generate $1.1 trillion in sales. 

Women-owned firms account for 40% of all privately held firms.

Businesses Owned by Women of Color

1.9 million Firms are majority-owned by women of color . 

Employ 1.2 million people and generate $165 billion in revenues annually.

Between 2002 and 2008, these firms grew faster than all privately held firms. 

Million Dollar Businesses

One in five firms with revenue of $1 million or more is woman-owned.

3% of women-owned firms have revenues of $1 M+ compared with 6% of men-owned firms.

 These are numbers to be proud of and a good healthy step in the right direction.

Hit by the Recession: The Learning Curve

This recession has been the worst since the depression on the 1930�s. The global nature means that it will take some time for us to find our way out.

There are so many intricacies and controversial factors of cause and effect .We know that a combination of poor decision making, mismanagement, irresponsibility and personal greed by our leaders contributed to the current crash. I�m sure many of you will have a lot to say about this. Every time I approached this section it I hit a wall. So I thought I we would take big picture approach. Step back a little and examine emergent trends.

The changing defines of �normal� .Today everything we learnt as macro and micro economic theory and practice has changed.  New trends are influencing the new world market place.

Today the buzz word in Industry is the �changing defines of normal�. Daily we in industry have to take account of developments and make swift adjustments. Peter Navarro�s analysis off how to evaluate trends states that we should have seen the recession coming through the housing market trends in 2006 -2007.

We ourselves started making such changes three years ago and took steps to soften the impact, through diversification of industry, product and markets streamlining operations, credit management, capital investment, production efficiencies and exports.

Reporting on rates of growth and trends of growth - Joseph Carson, an Economist of New York, was quoted in the article saying, �What�s going to change is how we generate growth, not how fast we can grow.� We are learning �Agility and responsiveness to markets is the key�

Some positive emergent trends and growth areas

Manufacturing: Is an index of how well the economy is doing. One job in manufacturing creates 4 jobs in the economy.  When manufacturing is curtailed jobs are lost, resulting in a downward spiraling effecting in the economy and community. Last year was particularly bad for manufacturers in US. Manufacturing has been pushed out of the US, with only 12 % done in the state of California which is the fifth largest economy in the world.  Now there is a sweep to build in the US. The stimulus money is supposed to help in supporting the creation of jobs. We saw small growth of 3 % in the first quarter of 2010.

Global Trade: 95 % of future markets are in another country so the growth of exports is an expansion area. Small business is harnessing this and governments are promoting this by providing opportunities and opening doors. We see this optimized very well by countries such as China and India.  I too have been active in opening up trade routes to Europe and Latin countries, including Mexico...thank you! I feel like Marco Polo!

E - Commerce:  is and has been a opportunity for growth of trade and is expanding rapidly. E commerce is particularly conducive for women, because of the ease of working from home.  Of course women of generation Y are as comfortable as men.

IT- Well known to be the current and future emollient of all commerce and communication. Here again we see men and women in this field.

Alternative Energy: Another huge growth area with the growing awareness of conserving resources.

In each of these areas women entrepreneurs playing a role in claiming market share.

Small Businesses perspective: Steering the Economy

So what are small business saying about the economy?

Recently President Obama invited key leaders from business, industry banking, education, housing and health to assemble and speak our minds and tell him our ideas and objectives for economic recovery.  We were asked how we could grow our business, create jobs and build back the community and state obstacles in our way?

Picture a room of angry entrepreneurs have invested all their assets and their lives in providing jobs and products and services to community and country. Leaders who are proud bastions of business who take serious responsibility for their employees and families, certainly the truth comes out.

Most place the responsibility for the current economic crash fairly and squarely on poor government policies and lack of foresight and inaction. All of us sent a resounding message demanding the creation of a �positive business environment �.

Message to government

  • Allow businesses to do what they do best without government interference. Free enterprise will return markets to normal.
  • Reduce red tape, legal restriction and control: costing 45 % more to small   businesses and does not apply anyway.
  • Cut payroll tax for employees and  tax incentives for small businesses so that they invest and can grow faster
  • Increase funding :Loans : make good loans available so business can invest

Industry perspective

  • Attract more people into business �manufacturing creates jobs.
  • Enable small business to do business with large companies through matchmaking.
  • Open public sector to do  business with smaller business
  • Encourage new Technology and encourage Green Jobs

Change in mind set

  • Recognize and celebrate the success of small private enterprise
  • Reinvent yourself products services markets and methods

Moving Women into Decision Making


Profile of women entrepreneurs:

Let us first acknowledge and respect the perennial model of a woman entrepreneur: She is the woman in a village in India or Africa, the micro business woman who walks in the heat of the sun to the market place carrying a basket of bananas to earn a living for her family. Complete with a child in tow!!

Many of today�s entrepreneurs are no different. We all start in a small way. I am fortunate to have an education and resources and drove to work. I too had a baby on the hip and 4 year old in tow. I remember my challenge was to get to work without any baby stains on my blouse.  I too knew little of business and learnt from the ground up in a male dominated environment.  

Why do we go into business?

Women are naturally creative and innovative. Right from get go we have to make things work. We make something out of nothing and keep everyone happy while we do so. We have tireless energy to do what ever is needed and more.  So why do individuals go into business? The foremost reason remains the desire to follow their passion and be in charge of their destiny It ia also a pioneering spirit. Others may have hit the glass ceiling in the corporate world - although there is a glass ceiling in business as well. For some it is a wish to combine work- family and home balance �the technology today makes this possible. Notably more and more of the Gen X and Gen Y see this as the only way to go,

Obstacles to entering the world of business

  • Access to funding/ capital: stereo typing on whether women are good investment risks.
  • Knowledge and savvy in business
  • Use of technology barriers: Applies more to women of my generation not so much to . Gen X and Y who are way ahead in use of social media technology.
  • Networking in a mans world � in a mans way of doing business.
  • Credibility and issues of confidence � a gender bias on whether women can produce results when it comes to competing for contracts.
  • Time commitment is enormous-   working 24-7 at least in the early years.
  • Family opposition- because it is a non traditional field and the risk involved
  • Financial uncertainty - steady paycheck v unknown income

Women Entrepreneurs as Decision Makers

Women are good decision makers. The world of business and entrepreneurship requires making decisions on a macro and micro level right from the get go.

Sink or swim: Decision making and leadership is based on a swim or sink model there is no wiggle room. Wrong decisions lead to sudden death with instant loss of all assets and credibility.  10% of firms with employees and 30 % of single proprietorships fail in first year and about half survive five years.

Learning curve: there really isn�t one because you have to act as though from knowledge. Customer�s vendors and employees rely on you to make good decisions.

The buck stops with you:  you are ultimately responsible for employees, accountable to customer�s vendors, investors, bank, the legal compliance marketing, sales and human resources and the community and government. It is the all encompassing solemn role that most small business takes seriously. 

Direct and personal:  Our decisions are direct and personal so there is no safety of corporate anonymity. We affect our employees and their families, whom we see daily.

The Models of leadership: In recent decades women were leading on a male model of leadership. But in recent years women have become more comfortable in developing their own styles which is more intuitive and harmonious. It is interesting to note that Generation Y is particularly comfortable with their own style and men of this generation are much more accepting of female leadership.

 Women�s Contributions to Rebuilding the Economy  

Women in business are significant contributors to the GNP�s of their nations. They are key influencers and decision makers in their own right. Their potential is far greater than currently recognized.

They are working along side with men taking a shared responsibility � creating a shift in business culture.  We now expected to see women in leadership as CEO�s and as senior management in private public companies. They are an indelible part of the GNP. So again-

  • 10.1 M firms are women owned representing 34 % of all firms

  • 13 M people are employed by women representing 21 % of jobs

  • $1.9 trillion sales generated by women entrepreneurs� represent14 % of all sales

As more recent entrants into the business world woman have to be more strategic in their advancement. They have catch up and then surge forward. So we see women doing a number of things to strengthening the economy and help each other.

Firstly, women are no longer content with working for someone, they are aggressively opening their own businesses in all fields including manufacturing, consulting marketing medicine law and finance and accounting. Coupled with this we are seeing that women entrepreneurs are providing jobs for women � they are creating pathways and models of success and enabling economic independence for other women and men.

Secondly, women have understood the need to redefine core architecture of doing business. Hence, they have become very active in public policy and advocacy legislative process and politics. For example in California I have recently worked legislation that requires governments to consult small business all matters that pertain to them. Currently we are pushing for a universal woman owned business certification in the state of California. I was part of the Testimonial hearings in Sacramento, California.  

Thirdly, women are strengthening their negotiating power and influence by forming strong organizations such as NAWBO and WBO � strong business based groups that are now powerful enough that we are being heard when we speak with one voice. So we have a platform to negotiating from strength and thus gain more visibility and open doors.

Fourthly, Owner to owner: women mentoring women on a formal program. As Madeline Albright once said �there is a special place in hell for women who don�t help each other �

They are opening new Global opportunities �women are now going on Trade missions such as the first all women trade mission to Brussels and Netherlands in 2007.

Fifthly, women are aggressively using technology to succeed-They are using social media to organize, educate themselves to market and improve public relations and gain visibility. They are using the technology of social media. They are entering markets that are now only accessible through the internet and cyberspace. If you want to do business with the conglomerates, this is the only window of access.

Lastly , Women have recognized the value of their contributions and were swift in converting  the hitherto informal business into formal ones such as child care - elder care � coaching � mentoring -catering- event planning- housekeeping etc . These are whole new industries that have sprung up in the last few decades.

4 Opportunities for Women Entrepreneurs: Measuring Equality

We cannot apply the income parity test in the same way to measure parity with male counterparts. Their contributions to the GNP are proof of strong visibility and are growing in their impact. Instead let us look at the changes and special opportunities open to women only. �Entrepreneurs are in their own category�

  1. Changes in business culture: Women entrepreneurs not only expect to be part of the programs they are expected to be present at all business and economic platforms. Regardless of whether they are bidding for contracts or at discussions on economic councils or as key managers in corporations.
  2.  Many business opportunities are being provided exclusively for women in the form of   bidding opportunity for contracts with large corporations and government. As a woman owned business we have access to special pricing as well.
  3. Legal frame work of opportunity has been structured so that large companies are required to do business with small and woman owned businesses. And through 8A , GSA, SBA Loans
  4. In terms of equal opportunity and legal framework we have clear laws against discrimination in hiring practices. We also have in place a complex legal framework in place of maternity leave and family leave and pay and accesses to higher level positions
  5. Special programs- access to Mr. Obama�s stimulus money

Does it make difference if you are a woman? Yes it does.....Sometimes for the better!

Conclusion� Moving from strength to strength  

The way forward is definitely through strong partnerships: closing the commonly miss-understood divides. These divides prevent the proper collaboration and partnering that is essential to progress both locally nationally and globally. Closing the following divides or at least narrowing them will lead us to a better future. Each of these examples in themselves merit a complete discussion in their own right.

  1. Increase women CEOs of public companies which remain at an unchanged 15.2 % -last 2 years.
  2. Public and private- working together to strengthen business environment.
  3. Inter Generational teams- working the baby boomers with Gen X and Y
  4. Special programs � Match making small companies with large companies
  5. Volunteerism � A substantial bridge to jobs of tomorrow: transferring leadership and skill learnt in volunteerism to real jobs
  6. Informal v formal economy- Straddle over from the informal to the formal.

Over recent years I am delighted to report the strengthening dialogue and partnership between the public and private sector and civil society. We are seeing large companies participating more and more in civil society and providing resources and leadership to humanitarian causes.

As a concrete example I see this developing slowly but surely even at the United Nations CSW where there was a strong representation of private industry even at high levels such as the US Governmental briefings. The dialogue of women in decision making  began at the CSW about 5 years ago and has been nurtures at the CSW by many of us here : resulting in the recent creation of the new �women�s  entity at the UN. At UN discussions on Internet and Cyberspace also we see the private sector welcomed as leaders in partnering humanitarian and advocacy work. A vision shared strongly at recent high level discussions in the UK.

Together we can create partnerships to achieve goals of gender equality- �Protecting the future is combined effort of diverse perspectives�


If you would like further information, please contact me at:   [email protected]

Shaila Rao Mistry is a Fellow of The Business Forum Institute and is currently the Chief Executive Officer of Jayco Interface Technology, Inc.  She holds a B.S. in Social Sciences from London University; a Masters in Social Policy & Administration from the London School of Economics; a Law & Social Sciences double Masters from Brunel University, London and a Masters in Clinical Psychology from London University. She is also a Fellow of the Public Policy Women's Foundation of California Policy Institute.  She has spoken on a variety of issues at United Nations Summits in Geneva, London, Ottawa, Perth, Tunisia and New York.  She has also addressed the House of Commons (Parliament) in London, United Kingdom. Recognitions include the prestigious Marco Polo Award as Entrepreneur of the Year Award by the Asian Business Association of Orange County. Top 20 Women to Watch recognition Orange County Metro; South Asian Business woman of the year award from the South Asian Business Association Network. She has also been featured in several prominent journals in America and Europe.  Shaila speaks eleven languages; she was born in India, educated in England and now resides in California in the United States.

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