07/10/2007 02:43 pm ET | Updated May 25, 2011

The New Protectionism

Forget fair trade with Africa. We don't even have fair trade at home.

There are nearly ten million women-owned businesses in the US -- that's nearly half the private companies in the country. They employ more people than the Fortune 500 globally and they're creating new jobs faster than businesses overall. They're highly profitable and are developing an unparalleled reputation for customer service. They are, in fact, the biggest success story in the US economy over the past ten years. That's just one reason why George Bush has been so consistent in cozying up to leading female entrepreneurs. Their growth is what kept us from recession in 2002.

They did this by themselves. Because although the federal government, after seven years of toing and froing, is edging cautiously towards a five percent "set aside" for women-owned businesses, that hasn't been agreed yet. And let's be honest: five percent to women still means that 95 percent of federal dollars still goes to the guys.

And lest the commercial sector start feeling smug, get this. Only about the same five percent of spending by the Fortune 500 goes to women-owned businesses. Sure, companies like Disney and Amex and Dell will boast loud and clear about "supplier diversity" and, to be honest, they do try. But the bottom line is still the same. Most companies buy from men, from companies owned and run by men. Not because there aren't any alternatives. But because they want to.

Oh and while we're at it, yes there is a similar provision for minority-owned business. Another wildly generous five percent. There's nothing for companies owned and run by the disabled or by veterans.

The old boys' network is still alive and well and keeping new business inside the fold. Throwing a five percent bone out to women and minorities looks good but five percent is nowhere near enough. The free marketers among us (and I count myself as one) will say: these companies should earn the business. Yes, they should. But I have now talked to too many female CEOs who tell me the same story: the buyers don't return their calls, won't meet with them, aren't interested. It is very, very hard to prove yourself to someone who studiously ignores you.

You could call it the new protectionism. Forget fair trade with Africa. We don't even have fair trade at home.

Taxpayers may wish to take note. If you were deciding where to place those dollars, what would you rather do? Spend it on the fastest growing sector of the economy, dominated by passionate entrepreneurs who are determined to prove themselves and who consider their customers as part of their family? Or spend it on the same old guys you've always spent it on, the ones who take it for granted?

Shareholders may wish to take note too.

It is your money they're spending.