Summary

Women's entrepreneurship is thriving globally, with significant participation in business startups and management, despite facing challenges such as smaller business sizes and less access to funding compared to men.

Abstract

The article underscores the growing prominence of women in entrepreneurship, with an estimated 274 million women involved in business startups worldwide. Women entrepreneurs have proven to be resilient, adapting to crises and contributing significantly to economic growth. The Global Entrepreneurship Monitor (GEM) report indicates that women own and manage about a third of established businesses, with similar motivations to men for starting a business, often due to job scarcity. However, women tend to run smaller businesses and have less personal exposure to entrepreneurs. The gender gap in entrepreneurship is narrowing, with women responsible for half of all startups and more than half of new hires globally. Despite these advancements, women report lower confidence in their entrepreneurial capabilities and face barriers such as limited access to capital and societal expectations. Initiatives like the European Commission's WEGate and the World Bank's Women Entrepreneurs Finance Initiative (We-Fi) aim to support women entrepreneurs by providing networking opportunities, access to capital, and policy guidance.

Opinions

Women's entrepreneurship is crucial for economic growth and stability, as highlighted by Aileen Ionescu-Somers.
Role models are considered important for aspiring women entrepreneurs, yet there is a lack of widely recognized successful female entrepreneur role models.
Women entrepreneurs have been adept at turning crises into opportunities, as noted by the GEM report.
Magdalena Sepulveda points out that women are making significant strides in entrepreneurship, despite representing about 17% of the world's population.
Elena Botella represents the shift from female CEOs to female founders and emphasizes being respected as an entrepreneur regardless of gender.
The GEM report indicates that while women entrepreneurs are gaining ground, they still face challenges such as running smaller businesses and having less access to funding compared to men.
Women entrepreneurs are more likely to focus on local markets compared to their male counterparts.
European women have some of the lowest rates of entrepreneurship, with a rate of 5.7% compared to the global average of 11%.
Networking and self-organized circles have been key in empowering women entrepreneurs, especially during economic turmoil.
Despite the progress, significant barriers to business startup and growth persist, particularly in contexts of poverty and traditional gender beliefs.
Initiatives like WEGate, Enterprise Europe Network, and We-Fi are working to improve access to capital and support for women entrepreneurs.
The OECD's WE Initiative aims to boost women's entrepreneurship through improved policy efforts and the creation of a multi-stakeholder platform.
Stereotypes and

Women Entrepreneurship Must Keep Thriving

274 million women globally are involved in business startups. Almost one in five women surveyed globally reported an intention to start a business within the next three years.

Examples have begun to be quite popular. We wrote an article a few months ago about the “Power of Being Normal”, where we talked about Melanie Perkins, the founder of Canva, and her ability to show the power of a cool entrepreneur who can be the third wealthiest woman in Australia while still having her feet on the ground. Women’s entrepreneurship has gradually entered the hearts, minds, and everyday realities of people in almost every country across the globe.

Globally, many women believe it’s essential for aspiring entrepreneurs to have a role model to look up to. Yet, few women can name a successful female entrepreneur role model.

As the Global Entrepreneurship Monitor report highlights, women entrepreneurs have shown themselves to be strong and resilient in the face of crisis and chaos. Many women entrepreneurs managed to turn the new business context to their advantage. GEM is a collaborative, global research initiative between the Global Entrepreneurship Monitor (GEM) and World Economic Forum (WEF) that provides broad-based global insights on entrepreneurship and innovation in all its forms, launched in 2013 by an initiative of the University of Maryland along with the World Economic Forum (WEF). As Aileen Ionescu-Somers highlights, there is little doubt that women entrepreneurs are and will increasingly be an intrinsic part of the backbone of economic growth and stability for nations worldwide.

But let’s put words in numbers. Based on the GEM 2020 survey countries, an estimated 274 million women are involved in business startups and 139 million women owners/managers of established businesses, while 144 million women are informal investors globally. The global average total early-stage Entrepreneurial Activity rate (TEA, defined by GEM as adults between the ages of 18 and 64 who are either a nascent entrepreneur or owner/manager of a new business) for women entrepreneurs was 11%, representing almost half of all entrepreneurs active worldwide.

The gender gap in entrepreneurship seems to be closing. Magdalena Sepulveda, a research fellow at the IESE Business School in Spain, points out that women are behind half of all startups worldwide and have made more than half of all new hires globally despite having about 17% of the world’s population.

According to the World Economic Forum, the last decade saw a shift from female CEOs to female founders. Elena Botella, the founder of Evolane and CEO of Elite Group, with more than 350 employees worldwide, is another example to look up to. She points out that she doesn’t really think about being a woman entrepreneur. “I’m an entrepreneur who happens to be a woman,” she said in one of her interviews after becoming the first Latina founder of a unicorn in Silicon Valley. “I don’t care what I’m called; I care about being respected.

GEM report shows eye-opening and outstanding facts:

Today, women own and manage about a third of established businesses, and motivations for starting a business were generally quite similar for both men and women. Unfortunately, the main factor is job scarcity.
Still, women tend to run much smaller businesses than men. About 36.6% of women entrepreneurs work as solo entrepreneurs in the early stage, operating independently without co-founders or employees, compared to 24.6% of men.
Women are less likely on average than men to know an entrepreneur personally, with the most significant gap being in low-income countries. Globally, 5.8% of women, compared to 8.2% of men, provide funding for entrepreneurial startups, representing a 30% gender gap.
Gender parity in cultural support for entrepreneurship is strong globally, with parity in rates for: ease of starting a business; the perception that entrepreneurship is a good career; that new business ownership is a high-status job; and that media coverage is favorable for new businesses. Rates for supportive culture tend to be highest in low-income countries, especially in Central & East Asia and Middle East & Africa.
However, women also reported an average 20% lower confidence than men in their capabilities to start a business. Globally, women entrepreneurs are much more likely to target their business offerings to local markets compared to men and much less likely than men entrepreneurs to pursue sales in national and international (13.8% vs. 18.9%) markets.
In Europe, we still have probably the longest way to go, as women in Europe have some of the lowest rates of entrepreneurship compared to women in other regions of the world. European women’s rate of entrepreneurial activity stands at 5.7%, compared with a world average of 11%.

As we can see, the global economic turmoil has had little or no impact on women’s engagement in entrepreneurial activity. As a matter of fact, it has even increased their capacity to seize opportunities created by this new business context. Women entrepreneurs have made up for the employment gap left by men in the workforce, have maintained their productivity levels, and have grown their businesses despite the economic crisis.

One of the major factors affecting women entrepreneurs’ resilience during that period was the empowerment that came with networking, particularly in self-organized circles.

Even with the promising numbers for entrepreneurial intentions and high-growth entrepreneurship in many countries, women entrepreneurs still face significant barriers to business startup and growth, especially in contexts of poverty, traditional gender beliefs, and restrictions on participation in public life.

In Europe, a few very interesting initiatives appeared, like the European Commission’s programs WEGate, Enterprise Europe Network (EEN) for women, or the projects to encourage the emergence of more women business angels in the EU and increase access to alternative sources of funding, by setting up a European community of women business angels and women entrepreneurs. The World Bank is also working on the Women Entrepreneurs Finance Initiative (We-Fi) at a more international level. As they explain, It is nearly impossible to sustain a business without access to capital. Also, at a global level, OECD launched the WE Initiative, aimed at boosting women’s entrepreneurship at the global, national and local scale through improved policy efforts, based on four pillars:

Provide comparable international data on women entrepreneurs’ access to finance by including gender-disaggregated data in the OECD Scoreboard on Financing SMEs and Entrepreneurs.
Identify best practices on priority topics (e.g., women tech entrepreneurs).
Provide tailored policy guidance for countries and local areas through case studies, and develop a multi-stakeholder platform bringing together the public and private sectors.

Whereas women’s success in the business world is less common than men’s, there are some notable examples. Women in business are sometimes stereotyped as not being as tough or aggressive as males, with men holding more power and control over their work assignments in the more traditional roles of a businessman. Businesswomen often describe having been asked how they could become better “managers” and having to prove themselves to the senior employees of their companies by doing things that they viewed as “unmanly.”

Despite all these initiatives, though, a lot still needs to be done, either in terms of policies and support tools or the social, business, and personal development environments.