New York City ranks first overall among the top 25 cities for women entrepreneurs, ahead of San Francisco, Seattle, and Austin, according to the Dell Women Entrepreneur Cities Index (WE Cities), released today at the White House’s Global Entrepreneurship Summit, and the best place for Harlem-based women entrepreneurs.
The report measures a city’s ability to attract and support high-potential women entrepreneurs who want to grow their business. Research for the report began with an April 2016 symposium chaired by David Ricketts, a fellow at the Technology and Entrepreneurship Center at Harvard. The symposium brought together 40 global thought leaders, women entrepreneurs, academics, and media to discuss whether access to markets, capital, talent, and technology are the four major factors affecting the ability for women-owned businesses to grow, Ricketts says. During the symposium, he says, the group decided to add a fifth factor—culture—which measures the prevalence of mentors, networks, and role models as well as public polices that enable women to assume leadership positions and achieve success.
Based on the research symposium, IHS, an economic forecasting and consulting firm, developed the metrics that produced the final rankings.
“This is not something that has been done before,” says Jim Diffley, a senior director at IHS economic. “There is no simple metric that can tell you the answer.” The trick, he says, was finding factors that are measurable and could be tracked over time. IHS came up with 77 indicators across the five categories of markets, talent, capital, technology, and culture.
Examples of indicators in each category are:
- Markets: The percentage of women on corporate boards, the percentage of city startups run by women, and transportation costs.
- Talent: Female labor force participation rate, the percentage of female enrollment in business schools, and the percentage of women with tertiary education.
- Capital: The number of women in a second round or higher investment cycle, the number of high-potential, net-worth investors, and the percentage of investment firms with at least one female executive.
- Technology: Percentage of women who use the Internet, the percentage of women with smartphones, and ratio of male/female use of smartphones for transactions.
- Culture: Presence of female entrepreneurs, networking groups for women entrepreneurs and businesswomen, policies around equal pay and hiring, and prevalence of paid maternity and paternity leave.
“Cities that were really good in one or two things didn’t come out on top,” Dr. Ricketts says. “But cities good at many things tended to rise a little higher.”
New York City ended up ahead of San Francisco because women entrepreneurs in New York City have more access to capital through women-to-women funding groups, and access to city policies that provide an equal playing field for women, says Elizabeth Gore, Dell’s entrepreneur-in-residence. Entrepreneurs don’t often think about the importance of public policy, she says, but policies that level the playing field for women entrepreneurs are essential in helping women to grow their businesses.
“Your profit margin might be very different in New York than it is in Austin,” Gore says. “Women in particular also have to factor in additional costs such as childcare and elderly care expenses, which disproportionately fall to women to take care of, and eat into their bottom line—every hour spent paying for daycare while working on your business is chipping away at your net revenue.”
New York is also slowly phasing in a paid leave policy over the next five years, while San Francisco already offers six weeks paid leave and many cities in other parts of the world offer their own paid parental leave policies.
Access to capital for women entrepreneurs also influenced the scores, Diffley says. In New York City, there are more accelerators for women, more women-led firms, and more women-to-women funding opportunities, he says.
New York City has a goal of awarding $16 billion in minority and women-owned business enterprise contracts across agencies over the next 10 years. New York City awarded more than $1.6 billion in contracts to minority and women-owned business enterprises last fiscal year.
Yet, despite New York City’s top ranking, it still scored only 58.6 out of a potential 100, demonstrating that even the top cities have room for improvement. “This tells us that cities should adopt a broad strategy that addresses the issue across multiple fronts because there is no ‘silver bullet,’ ” says Karen Quintos, Dell’s senior vice president and chief marketing officer. “However, there is evidence that by tackling the top challenges women founders face—cultural biases and access to capital, markets, talent, and technology—cities can significantly improve their own economic futures and empower women to not just start businesses but to grow them.”
IHS and Dell hope that cities will look at their scores and see what they can do differently to support high-potential women entrepreneurs, Diffley says.
This is the first year Dell released a report that drilled down to the city level. For the past four years, Dell has released an annual report on the best countries for women entrepreneurs.
Via source. Photo credit Harlem business owners.