n recent years, the discourse on women entrepreneurship has been centered on questions of bias and stereotypes. While these are critical, it is important to also delve into the myriad aspects of women’s entrepreneurship that remain overlooked. It is of utmost importance to shift the conversation toward recognizing women’s strengths and exploring ways to support their continuous efforts.
Measuring the economic impact of women entrepreneurs
Data can play a pivotal role in understanding the economic impact of women with regards to their specific motivations and aspirations. The right type of data can help policymakers and others make informed decisions related to policy, practice, and research.
The Global Entrepreneurship Monitor (GEM) 2022/23 Women’s Entrepreneurship Report: Challenging Bias and Stereotypes can serve as a reference. Based on interviews with some 175,000 individuals and covering 49 countries, the research notes that women’s entrepreneurship activities have been rapidly evolving and diversifying against all odds (global pandemic, economic downturns and the resulting supply chain and business model destruction). Amongst all entrepreneur respondents, it is notable that one in four high–growth innovation–oriented entrepreneurs are women. It has been a long time coming.
While this is progress on the women’s entrepreneurship front, there are still many areas for improvement. In terms of market focus, women are over–represented among the smallest businesses in highly competitive, low–margin markets and industries. On the other hand, they are also still facing inequality within their households. Women carry a heavier burden of family responsibilities, which contributes to increased economic dependence and decreased interpersonal power and privilege.
The GEM report has shown that, on a global level, family and personal issues continue to disproportionately cause women (18%) to leave their businesses, compared to just 12.6% for men. In fact, one in five women reported business exit due to family reasons; this is about 43% more often than men. This persistent gap underlines the importance of creating initiatives, programs, and policies that foster gender equity and support women in their parenting and professional journeys.
Women’s unique challenges
The report also identified a significant gender gap in established business ownership, defined as managing a running business for more than 42 months. Again according to GEM research, only one in three entrepreneur respondents running an established business is a woman. Additionally, women were less likely than men to know an entrepreneur (48.9% vs. 53.7%), a known factor that encourages the “staying power” of entrepreneurs. And even though half of women globally report seeing good business opportunities, far fewer women than men feel prepared to start a business in terms of skills or knowledge.
Similarly, women are less likely to report feeling undeterred by the fear of failure than men. These numbers not only confirm a gender gap in social capital but also underscore the critical need for training programs that equip women with the fundamental skills required to initiate, sustain, and scale a business. As a proactive example, the Cartier Women’s Initiative (CWI) addresses this gap by providing women entrepreneurs with financial, social, and human capital support, and helps build their leadership skills.
Women still have considerably steeper hills to climb than their male counterparts, particularly in developing countries. Greater focus needs to be directed towards women embarking on ventures that involve substantial growth, innovation, and market presence. Perpetuating stereotypes that portray women entrepreneurs as a disadvantaged cohort consolidates a misleading narrative, suggesting an unwarranted disparity in business leadership potential between men and women.
Recommendations for policymakers, educators, and researchers
The report highlights how stakeholders can cultivate an inclusive and supportive ecosystem for women entrepreneurs.
1. Empower high–potential women entrepreneurs by shifting focus to those leading high–growth ventures. Stereotypes and biases that portray women as disadvantaged in business leadership need to be challenged. Women entrepreneurs are proving their competence in building large, successful businesses, despite obstacles.
2. Recognize the importance of segmentation so that support to women entrepreneurs can be more effective. Rates and outcomes vary across sectors, growth stages, and social contexts. More analysis of gender differences within specific sectors and segments is needed to control for the inevitable influence of gendered structural differences in entrepreneurial activity rates.
3. Support digitalization access and related costs for women entrepreneurs, to overcome the current gender digital divide. The pandemic prompted widespread adoption of digital tools, benefiting sales and employment. However, challenges persist for small businesses, particularly in emerging economies and rural markets.
4. Commend the social and environmental sustainability contributions of women-led businesses. Investors and consumers increasingly prioritize companies that contribute positively to social and environmental issues. Impact investing platforms and vehicles encourage the prioritization of social and environmental sustainability. Governments could further incentivize such practices by providing procurement preferences or incentives to women–led businesses that integrate sustainability into their core business strategy.
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Assessing the state of women’s entrepreneurship
Photo by Brooke Lark on Unsplash
March 8, 2024
Much remains to be done to empower women entrepreneurs. A new report by the Global Entrepreneurship Monitor (GEM) explores the current state of women’s entrepreneurship and what policymakers, educators, and researchers can do to progress further, writes Aileen Ionescu–Somers.
I
n recent years, the discourse on women entrepreneurship has been centered on questions of bias and stereotypes. While these are critical, it is important to also delve into the myriad aspects of women’s entrepreneurship that remain overlooked. It is of utmost importance to shift the conversation toward recognizing women’s strengths and exploring ways to support their continuous efforts.
Measuring the economic impact of women entrepreneurs
Data can play a pivotal role in understanding the economic impact of women with regards to their specific motivations and aspirations. The right type of data can help policymakers and others make informed decisions related to policy, practice, and research.
The Global Entrepreneurship Monitor (GEM) 2022/23 Women’s Entrepreneurship Report: Challenging Bias and Stereotypes can serve as a reference. Based on interviews with some 175,000 individuals and covering 49 countries, the research notes that women’s entrepreneurship activities have been rapidly evolving and diversifying against all odds (global pandemic, economic downturns and the resulting supply chain and business model destruction). Amongst all entrepreneur respondents, it is notable that one in four high–growth innovation–oriented entrepreneurs are women. It has been a long time coming.
While this is progress on the women’s entrepreneurship front, there are still many areas for improvement. In terms of market focus, women are over–represented among the smallest businesses in highly competitive, low–margin markets and industries. On the other hand, they are also still facing inequality within their households. Women carry a heavier burden of family responsibilities, which contributes to increased economic dependence and decreased interpersonal power and privilege.
The GEM report has shown that, on a global level, family and personal issues continue to disproportionately cause women (18%) to leave their businesses, compared to just 12.6% for men. In fact, one in five women reported business exit due to family reasons; this is about 43% more often than men. This persistent gap underlines the importance of creating initiatives, programs, and policies that foster gender equity and support women in their parenting and professional journeys.
Women’s unique challenges
The report also identified a significant gender gap in established business ownership, defined as managing a running business for more than 42 months. Again according to GEM research, only one in three entrepreneur respondents running an established business is a woman. Additionally, women were less likely than men to know an entrepreneur (48.9% vs. 53.7%), a known factor that encourages the “staying power” of entrepreneurs. And even though half of women globally report seeing good business opportunities, far fewer women than men feel prepared to start a business in terms of skills or knowledge.
Similarly, women are less likely to report feeling undeterred by the fear of failure than men. These numbers not only confirm a gender gap in social capital but also underscore the critical need for training programs that equip women with the fundamental skills required to initiate, sustain, and scale a business. As a proactive example, the Cartier Women’s Initiative (CWI) addresses this gap by providing women entrepreneurs with financial, social, and human capital support, and helps build their leadership skills.
Women still have considerably steeper hills to climb than their male counterparts, particularly in developing countries. Greater focus needs to be directed towards women embarking on ventures that involve substantial growth, innovation, and market presence. Perpetuating stereotypes that portray women entrepreneurs as a disadvantaged cohort consolidates a misleading narrative, suggesting an unwarranted disparity in business leadership potential between men and women.
Recommendations for policymakers, educators, and researchers
The report highlights how stakeholders can cultivate an inclusive and supportive ecosystem for women entrepreneurs.
1. Empower high–potential women entrepreneurs by shifting focus to those leading high–growth ventures. Stereotypes and biases that portray women as disadvantaged in business leadership need to be challenged. Women entrepreneurs are proving their competence in building large, successful businesses, despite obstacles.
2. Recognize the importance of segmentation so that support to women entrepreneurs can be more effective. Rates and outcomes vary across sectors, growth stages, and social contexts. More analysis of gender differences within specific sectors and segments is needed to control for the inevitable influence of gendered structural differences in entrepreneurial activity rates.
3. Support digitalization access and related costs for women entrepreneurs, to overcome the current gender digital divide. The pandemic prompted widespread adoption of digital tools, benefiting sales and employment. However, challenges persist for small businesses, particularly in emerging economies and rural markets.
4. Commend the social and environmental sustainability contributions of women-led businesses. Investors and consumers increasingly prioritize companies that contribute positively to social and environmental issues. Impact investing platforms and vehicles encourage the prioritization of social and environmental sustainability. Governments could further incentivize such practices by providing procurement preferences or incentives to women–led businesses that integrate sustainability into their core business strategy.
