Woman-Owned Firms: A Force in the Economy

Arizona ranks 10th in growth of women-owned firms over 20 years
by Geri Stengel

The seventh annual “State of Women-Owned Businesses Report,” commissioned by American Express OPEN, analyzes growth trends over the past 20 years among the nation’s 11.6 million women-owned enterprises, which employ nearly 9 million people and generate more than $1.7 trillion in revenues.

As of 2017, there are 138,300 woman-owned business in Phoenix. These firms employ 105,700 people and generate $18 billion in revenues per year. Over the past 20 years, Phoenix has experienced growth rates lower than both the national average and Arizona for the number of woman-owned businesses, total employment and total revenues. Over the past year, however, Phoenix woman-owned businesses have performed better than Arizona, although still not as good as their counterparts nationally.

Much of the growth in women’s entrepreneurship in the United States over the past 20 years has been driven by women of color. But over this span of time, Arizona’s growth rate for Latina-owned businesses in terms of number of firms, total employment and total revenues was below the national average — although, interestingly, over the past year, the growth rate for the number of woman-owned firms and total revenues was much stronger than the national average. Among Arizona Native American/Alaska Native woman-owned businesses, the reverse has been true: Over these 20 years, growth rates were above average and overall revenues dramatically higher, but over the past year, the growth rate in terms of the number of firms, total employment and total revenues was lower than the national average.

For woman-owned businesses generally in Arizona, the growth rate in terms of the number of firms and total employment over the past 20 years was stronger than for all business, and nearly the same for Arizona woman-owned businesses revenues. And compared to all woman-owned businesses in the U.S., Arizona woman-owned businesses experienced above-average growth rates in terms of the number of firms, overall employment and overall revenues.

But, over the past year, Arizona’s woman-owned businesses’ growth rates have lagged the national average. This is also true of Arizona woman-owned businesses compared to all businesses in the U.S. If revenues generated by Arizona woman-owned firms matched those currently generated by woman-owned businesses nationally, they would add $5 billion in revenues and 9,000 new jobs to the Arizona economy.

The report — which is based on data from the U.S. Census Bureau’s Survey of Business Owners and factors in relative changes in Gross Domestic Product — uses two types of rankings to evaluate economic vibrancy of woman-owned businesses by geography. The first metric — economic clout — ranks all 50 states (and the District of Columbia) and top metropolitan areas by the combined growth rates of woman-owned businesses for number of firms, employment and revenues. For economic clout, Arizona ranked No. 10 and Phoenix No. 36 in 2017.

The second ranking is based on “employment vitality,” which is a combined measurement by geography of the employment growth rate of woman-owned businesses over the past 20 years and the average number of employees per woman-owned business in 2017. For employment vitality, Arizona ranks No. 26 and Phoenix No. 40.

Growth of Woman-Owned Firms 1997-2017

Comparison of Arizona and Phoenix’s woman-owned firms data to the national numbers

Total US 1997 2007 2016 (est.) 2017 (est.) % Change,
1997-2017
Number of Firms 5,417,034 7,793,139 11,313,900 11,615,600 114.4%
Employment 7,076,081 7,579,876 8,976,100 8,985,200 27%
Sales ($000) $818,669,084 $1,202,115,758 $1,622,763,800 $1,663,991,700 103.3%
Arizona 1997 2007 2016 (est.) 2017 (est.) % Change,
1997-2017
Number of Firms 88,780 138,080 203,200 202,900 128.5%
Employment 101,601 147,392 149,500 147,900 45.6%
Sales ($000) $11,304,658 $21,795,502 $24,669,700 $24,035,000 112.6%
Phoenix, AZ 2002 2007 2016 (est.) 2017 (est.) % Change,
2002-2017 
Number of Firms 70,816 83,379 136,700 138,300 95.3%
Employment 89,408 102,518 106,500 105,700 18.2%
Sales ($000) $11,478,738 $15,911,873 $18,040,900 $17,750,500 54.6%

Source: American Express OPEN’s 2018 “State of Women-owned Businesses Report”

Arizona and Phoenix Rankings and Percentages

Nationally, the number of woman-owned firms increased by 114 percent from 1997 to 2017, compared to just a 44-percent increase among all businesses. Therefore, over the past 20 years, the number of woman-owned firms has grown at a rate 2.5 times faster than the national average.

Arizona is ranked 10th in growth of number of woman-owned firms over the past 20 years, with a 128.6-percent increase; 14th in growth of jobs created, with a 45.6-percent increase; and 18th in growth of firm revenues, with a 112.6-percent increase.

Phoenix is ranked 21st in growth of number of woman-owned firms among the top 50 U.S. metropolitan areas, with a 95.2-percent increase over the past 15 years; 39th in growth of jobs created, with an 18.2-percent increase; and 34th in growth of firm revenues, with a 54.6-percent increase.

Geri Stengel is an American Express OPEN research advisor.

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