Women’s Role in Business Key to L.A. Economy

Women-owned businesses are having a greater economic impact in the Los Angeles area than in any metropolitan area in the country, based on size, sales and number of firms, according to a study to be released today .

New York leads the nation in the number of women-owned firms--with a projected 230,765 firms by 2002, according to the Center for Women’s Business Research. Los Angeles is No. 2, with 213,759 women-owned firms estimated in Los Angeles County by 2002, the report said.

But even though New York has more women-owned businesses, the Los Angeles area’s women-owned businesses contributed more to the economy because of greater overall sales and size of the companies involved, the research group said.

The study, based on Census Bureau data, projects that sales next year at women-owned firms nationwide will be up 40% over 1997 levels, when the last economic Census was conducted.

Sales at women-owned business in the Los Angeles area, however, are expected to climb by 62%. And although employment nationwide at women-owned firms is expected to climb by 30%, local employment is forecast to jump by 50%.

“These growth figures are an indication that the woman business-owner population in L.A. is an established one and is now at the point where employment and revenues are really starting to grow in a significant way,” said Julie Weeks, director of research for the center.

Economists and researchers offered several theories for the employment and sales growth in Los Angeles.

For one, larger communities tend to have more women-owned businesses. But in sales and employment, Los Angeles beat out New York, the nation’s largest city.

Ted Gibson, chief economist for the California Department of Finance, said for the last four years, the Los Angeles economy has outpaced that of New York. And attitudes may play a role too.

“The West generally speaking is more hospitable to entrepreneurship than the East,” he said. “I think that probably would be a driving force behind the relatively rapid growth of women-owned businesses in L.A.” The report found that the 10 fastest-growing areas for women-owned business were largely in the West and Southwest.

The study estimates that by next year, there will be a record 112,700 women-owned firms with annual revenue of more than $1 million nationwide.