More support needed for women entrepreneurs
AS WE celebrated International Women’s Day, it remains a major disappointment that despite recent developments, it is fair to say that female entrepreneurs are still not fully supported to make a real difference to the economy.
As a report from the Global Entrepreneurship Monitor into women’s entrepreneurship shows, there is a complex narrative of gender differences which not only sheds light on the challenges and opportunities faced by women entrepreneurs, but also highlights the critical role of support systems in nurturing their success.
According to this study of female entrepreneurship in 49 countries across the world, about one in six women aspire to start their own business, a figure that is slightly lower than the one in five men with similar intentions. This gender gap widens when individuals take the step towards becoming an entrepreneur, and across the world one in ten women are in the early stages of starting a business, again lagging the one in eight men who are starting a business. This suggests that there not only needs to be a more concerted effort to get women to start a new business but that there should be greater efforts to transform this initial interest into the actual creation of new female-led firms.
When it comes to new ventures going beyond the initial start-up phase and surviving to become more established businesses, the gender gap becomes even more pronounced, suggesting that women face more significant challenges in sustaining businesses beyond the initial start-up phase. In addition, women entrepreneurs are more likely to be operating on their own rather than in an entrepreneurial team, which might reflect both a choice and a challenge in growing their businesses.
The types of businesses women are involved in and the impact they have also vary widely. This is especially the case in new sectors such as information technologies, where their presence is less pronounced, and which suggests a potential area for growth and support given the global shift towards digitalisation. On the other hand, the study shows that women are more conscious than men of social and environmental sustainability in their business decisions, both of which are increasingly important in the development of many new sectors across the world.
The demographic and motivational factors of women entrepreneurs also reveal interesting findings, with younger women showing a higher propensity towards entrepreneurship, especially in low-income countries. Education and household income levels also play a crucial role, with women entrepreneurs tending to be more educated but more likely to come from households with lower incomes. As a result, their motivations for starting a business often stem from job scarcity and a desire to make a difference, underlining the socio-economic drivers behind women’s entrepreneurship.
While women are starting and growing businesses, the difference with male entrepreneurs suggests that they continue to face systemic barriers and stereotypes that undermine their efforts. As this column has noted many times, addressing these challenges requires a concerted effort from politicians, businesses, policy-makers and educators to change the narrative on women entrepreneurs and to create an ecosystem that fosters their growth and success.
So what should be done to address this? As another report from the Women’s High Growth Taskforce chaired by Anne Boden noted last week, supporting high-potential women entrepreneurs is crucial for fostering growth and innovation in the business world. Stereotypes that paint women entrepreneurs as less competent than men are not only unfair but also inaccurate, with many women showing a remarkable ability to grow substantial and successful businesses despite these challenges.
Additionally, understanding the diversity among women entrepreneurs is essential for providing effective support, especially in considering how factors such as industry sector, business growth stage, and socio-economic context can significantly impact the entrepreneurial journey. Indeed, developing tailored support programmes that acknowledge these differences can lead to more equitable opportunities and outcomes for women in various business environments.
The role of digitalisation and sustainability in modern entrepreneurship cannot be overstated, particularly for women-led businesses. The shift towards digital tools, accelerated by the pandemic, has offered significant advantages in terms of reaching customers and scaling operations. However, this transition also presents challenges, especially for those small businesses grappling with costs and access issues, and addressing these challenges is key to levelling the playing field.
Similarly, the emphasis on social and environmental sustainability is growing, with women entrepreneurs often at the forefront of this movement despite the higher costs and regulatory hurdles. Encouraging and celebrating these efforts through impact investing and supportive governmental policies can amplify the impact of women-led businesses on society and the environment.
Therefore, the latest GEM Women’s Entrepreneurship Report offers invaluable insights into the state of female entrepreneurship, challenging biases and stereotypes that have long hindered women’s progress in this field. Simply put, it shows yet again that women are starting a wide range of businesses, leading the way in sustainability, and overcoming many obstacles to do so.
And on International Women’s Day, it is important to not only focus on the unique needs and challenges of women-owned firms but to celebrate their successes and help more female entrepreneurs thrive. In doing so, this isn’t just good news for women, but for everyone, because when women succeed in business, they bring new ideas, create new jobs, and generate new solutions to some of the world’s biggest problems.