Where Are The Women Entrepreneurs?
Wednesday we released the Global Entrepreneurship Monitor (GEM) Women’s Report on Capitol Hill in Washington D.C.
This report is the most comprehensive research on attitudes and behaviors of men and women entrepreneurs in the world.
Prof. Donna Kelley of Babson College presented a summary of the report which notes that there are 104 million early stage businesses and 83 million established businesses in the 59 economies studied. This is about 187 million entrepreneurs, approximating the population of Brazil.
Despite this significant contribution of entrepreneurs, there is only one of the 59 economies where the rate of women’s entrepreneurship exceeds that of men’s – Ghana. In every other country, men outnumber women in start up from 2-1 and as high as 8-1 in Korea. Even in the United States, the rate of women’s entry into entrepreneurship is ½ the rate of their male counterparts.
When we look at the industry sectors where women entrepreneurs participate, around the world we find that:
- 2/3 of women are in consumer and services while fewer than ½ of the men are in these sectors.
- Men are more often found in transforming and business sectors.
- Women entrepreneurs are slightly older, more likely to exit due to personal reasons and lack of financing and they are less likely to have high growth aspirations.
Why is it that women tend to found smaller, consumer/service based businesses and they are less likely to grow?
It is often said by policy-makers that given equal education, men and women have equal access to opportunities, and therefore, we just need to train women to be entrepreneurial. However, it may be that women perceive opportunities differently than men. The GEM Women’s Report shows that women entrepreneurs propensity to identify an opportunity declines as the level of country development increases. In other words, women in less developed economies (factor and efficiency) are more likely to identify opportunities for starting businesses than women in innovation driven economies like the US and Western Europe. Similarly, women entrepreneurs’ confidence in their capabilities and likelihood of knowing an entrepreneur also declines across level of development, while their fear of failure increases.
This data suggests that training women to be entrepreneurial may not be the right solution. Instead, we might take a careful look at the institutional factors that influence economies—these include:
- government policy,
- banking and finance systems,
- research and development,
- commercial and legal infrastructure, and
- cultural and social norms.
The GEM Women’s report suggests that training women entrepreneurs may be only a partial solution—there is a case to be made for reassessing institutions to determine if they fully support women entrepreneurs, understanding that they may have different needs, aspirations and growth trajectories.
This means that training of other stakeholders may also be appropriate. According to Ambassador Verveer, “women’s entrepreneurship is not just a women’s problem- it is everyone’s problem.”
Candida G. Brush
Chair, Entrepreneurship Division
Director, Arthur M. Blank Center for Entrepreneurship
Franklin W. Olin Distinguished Professor in Entrepreneurship