Women entrepreneurs are fuelling US business growth - here’s how

Have you ever considered starting a side hustle? Or becoming your own boss?

Many of us are doing just that, enticed by the prospect of extra income and being more in control of our time, and in the United States, many women are fuelling this growth in entrepreneurship, creating around half of all new businesses in 2022.

That’s roughly the same share that they created in both 2020 and 2021, according to a survey by HR platform, Gusto, and a sharp increase compared with 2019. Women made up 47% of entrepreneurs in 2022, compared with 29% prior to the COVID-19 pandemic, the data shows.

Supporting entrepreneurship and career paths for all has long been a theme for the World Economic Forum. The Forum’s Growth Summit: Jobs and Opportunity for All, is taking place 2-3 May 2023 in Geneva, Switzerland, uniting leaders from across the world to advance future opportunities, debate the future of work and find solutions for current challenges.

Cravings for financial stability and flexibility were two of the reasons women gave for founding their own companies, the Gusto data showed. Wanting or needing to supplement household income and improving financial stability were reasons cited by 41% of the entrepreneurs surveyed, up from 24% last year.

That likely reflects the uncertain economic backdrop. Rising prices are denting household budgets, driving new business starts and side hustles, while professional burn-out is leading some mid-career workers to start their own businesses.

Factors like elevated rates of inflation and the cost-of-living crisis are pushing people to explore business ideas, Gusto said. The annual rate of consumer price index inflation in the US was 5% in March, and while that’s lower than in recent months, it is still well above the central bank’s 2% target.

The Gusto report also explored how easy it is for entrepreneurs to access finance, and concluded that minorities are often left out of capital investments, with white business owners seeing capital investment rates 2.5 times that of Black entrepreneurs.

Despite such barriers, there are many examples of female entrepreneurs starting companies, and some of these are part of UpLink, a Forum-backed innovation platform. One example is Nivedha RM, who founded TrashCon, a system that automatically sorts waste for reuse and recycling.

Prominent examples and role models are key to helping close the gender gap, as set out in the World Economic Forum’s Global Gender Gap Report. That report shows the share of women in senior and leadership roles has grown steadily over the five years to 2022. It reached 42.7% in 2022, the highest gender parity score yet, but still leaves room for improvement.