Arkansas ranks near the bottom of the country on a national list related to opportunity for women and members of minority groups.
Even if you think you’ve heard this one before, don’t stop reading. There is some positive news ahead for the state and nation gleaned from ” The Middle Market Power Index: The Growing Economic Clout of Diverse Middle Market Firms,” a study conducted by American Express and Dun & Bradstreet.
For the purposes of this study, “midmarket” businesses are those generating between $10 million and $1 billion in revenue annually. The study reviewed ownership data for 19 million businesses across the United States from 2008 through 2014, focusing on ownership and leadership among women and minority groups.
Nationally the number of middle market firms is about 6 percent, or 136,603 businesses, with about 8,200 owned by women. Midsize businesses owned by women and members of minority groups in the U.S. are rapidly growing and have been since 2008.
Between 2008 and 2014 the number of women-owned businesses in the U.S. rose by 24 percent. For minority groups that number was 22 percent.
Both rates are about five times the national average. Midmarket businesses grew employment about 4 percent during that time, compared with 39 percent among minority-owned businesses and 38 percent for women-owned business.
These numbers are encouraging to Julie Weeks, author of the study and president and CEO of Womenable, a consulting firm aimed at improving the environment for women-owned businesses.
Of course, those businesses had the longest way to go. Nationally women-owned businesses make up only about 6 percent while what the study terms multicultural ownership pertains to about 5 percent.
Arkansas is home to 1,047 middle-market businesses, according to the report. Women-owned firms account for 46 of those, about 4 percent. For minority groups the number is 29 businesses owned, or about 3 percent.
We’re about 3 percentage points behind the rest of the country when it comes to women-owned. Arkansas ranks alongside Mississippi, Pennsylvania, South Carolina, South Dakota Wisconsin and Wyoming.
We are, it should be noted, not last. That is reserved for five other states, including Iowa and Maine at 3 percent.
Minority-group ownership of midsize companies in Arkansas is at 3 percent. That isn’t as bad as Maine or Nebraska at 1 percent, but certainly a number we’d like to see improve.
Weeks does point out that the numbers for minority-group ownership are often higher in states with more diverse populations. Makes sense.
There is some encouraging news in the study pertaining to Arkansas. About 14 percent of the state’s midmarket companies — these are largely privately held and not publicly traded — have female CEOs. This doesn’t include folks like Rosalind Brewer at Sam’s Club or Judy McReynolds at ArcBest because their companies are far too big to qualify for the list.
Nationally that number is 13 percent, so it is encouraging to see Arkansas ahead — ever so slightly — of the norms. We’re leading neighbors like Tennessee (12 percent), Missouri (13 percent), Oklahoma (13 percent) and Texas (13 percent).
Of course, there is plenty of room for improvement in Arkansas. Weeks offers the same advice to our companies that she would those women- and minority-owned businesses in other states. There are three growth areas that these companies should seek out when looking for increased revenue.
Weeks encourages businesses to look for corporations, such as large retailers, that have programs designed to help women. Wal-Mart, for example, highlights products supplied by women-owned businesses on its website.
Government contracts are a good source of revenue growth, Weeks said. She points out that some of the highest numbers for women- and minority-owned businesses are in the states nearest Washington, D.C. Those companies are taking advantage of proximity to decision-makers handing out government contracts.
Additionally, Weeks encourages businesses to look for exporting opportunities. Perhaps a company doesn’t have much room for growth in its current market, but overseas there might be potential for additional revenue.
This is the first year for the parties involved to conduct a study on women and minority-owned businesses. Weeks said her hope is that the research will continue and we’ll see continued growth in those categories where business people have traditionally seen limited opportunity.
Asking this segment of midmarket businesses to maintain its current growth rates might be tough. But Weeks projects we’ll see continued growth here, which is good news for Arkansas and the U.S.
“This is a trend that is going to see some powerful impacts in a few years,” Weeks said. “There will be a steady increase of women and minority firms growing up into the middle market. It will, forgive the pun, change the complexion of the middle market. It will have a phenomenal impact in years to come.”
By Chris Bahn
Source: Arkansas Online
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