Entrepreneurship is a universal human trait. People have established enterprises all throughout the world and throughout history. Despite the fact that women make up more than half of the world’s population, they own and run far fewer businesses than males. Venture types and management approaches differ between genders. Women’s entrepreneurship has various distinguishing traits that set it apart from men’s entrepreneurship.
However, differences exist between women entrepreneurs in different nations, as well as between women who are and are not involved in entrepreneurship. Overall, the reason for the behavior and individuality of female entrepreneurs is nuanced and multifaceted. So far, evidence suggests that demographic and socioeconomic determinants, subjective views, and cultural elements and institutions all contribute to understanding these differences and that such variances have major macroeconomic repercussions.
Researchers can ask questions about the links between entrepreneurship and wealth creation, employment choices and cognition, human capital accumulation and labor market structure, employment choice and family dynamics, business creation and peace, and many other topics by studying female entrepreneurship. From a scientific standpoint, the study of female entrepreneurship as a distinct topic of inquiry tells us not only about the behavior of women but also about entrepreneurial and human behaviors in general.
Female entrepreneurship has become an essential component of academic and policy discussions about entrepreneurship all across the world. Even so, there is still plenty we don’t know. The goals of this effort are to take stock of what has been learned thus far, identify the major gaps, and encourage scholars to push the frontier of knowledge in this field even farther.
According to Dr. Dana Kanze, Assistant Professor of Organizational Behavior at London Business School, Only 6% of the S&P 500 firms have a female CEO, while females earn around 80% of the workforce. In male-dominated industries, most of the labor market, support, and possibilities for women’s progress are extremely limited.
Dr. Kanze admits that many females in male-dominated industries want to gain momentum by starting their own companies in the face of a continuous income shortage and growth possibilities.
1. Men and women have various motives for becoming entrepreneurs.
Women and men, entrepreneurs have different motivations for starting their businesses. The key takeaway is that the incentives for starting a business differ depending on the entrepreneur’s gender. There are two key differences:
Females’ primary motivator is the need for autonomy and freedom. This motivation is about three times that of the second and third-place finishers. The identification of a market opportunity motivates females less than it encourages men. There is a difference of more than 12 points between males and females.
2. Support: a systemic deficit that accompanies entrepreneurs regardless of gender.
Both sexes are affected by the lack of assistance. The vast majority of men and females are not starting their businesses. The support for female entrepreneurship is even weaker. Females utilize accountants (34.9 percent vs. 38.7% for males) and external consultants even less than men (14.5 percent compared to 19.2 percent for men).
3. Women are more likely than men to train in tasks carried out by entrepreneurs before starting a business.
It is common knowledge that you must prepare yourself before establishing a business. According to our findings, male and female entrepreneurs do not qualify in the same way. Females are training while guys are seeking possible clientele.
For example, 43.3 percent pursue specialized training in their intended field, whereas 21.2 percent pursue managerial training. Only 31.9 percent of males, on the other hand, participate in specific businesses likely to do all different sorts of planning, such as developing a business plan, conducting market research, seeking public funding, and locating a partner.
4. Women are less self-assured than men.
Research has also revealed another surprise. Females are unquestionably less self-assured than men.
Is it impostor syndrome or just a natural apprehension? When asked about their possibilities of success, females are more restrained than men. Men are 72.4 percent confident in their ability to succeed, while females are 65.3 percent sure.
When you ask females about their future confidence, the results are similar. Compared to 48.2 percent of females, 64.7 percent of males feel very confident or confident in the future.
This lack of confidence could explain why extra training is required.
5. Women have less experience than men when starting a business.
The third explanatory component we propose is work experience. The graph below shows that females who start their businesses have less professional knowledge than male colleagues. Compared to 47.1 percent of men, 34.1 percent of females have more than ten years of experience.
We should also mention that the percentage of females with less than three years of professional experience is over 12 points higher than that of males with less than three years of professional experience (37.5 percent versus 25.7 percent).
Females, on the whole, have less entrepreneurial experience than men. Compared to 81.6 percent of males, nearly 95 percent of them establish a business for the first time.
Their lack of experience may exacerbate females’ need for additional training.
6. Women entrepreneurs rely on no one but themselves.
Females are more likely than men to be self-employed. Females make up 82.5 percent of lone entrepreneurs (compared to 69.8% of males), and they are almost half as likely as men to have a partner (12.4 percent compared to 22.9 percent). They may sense a more vital need for ad hoc training because they can only rely on themselves.
7. Women consider themselves to be less “entrepreneurial” than men.
Finally, females’ perceptions of their “entrepreneurial fiber” could be a factor. When asked about their entrepreneurial spirit, female entrepreneurs believe it is less than men’s. It is perplexing, given all of the respondents polled had eventually started their firm.
Everything goes back to training. We need to build and motivate girls (and boys) to engage in more entrepreneurship programs. Many groups around the country currently meet this need, but more is needed. We ensure that females, in particular, are regarded as growth-oriented entrepreneurs with no boundaries. Females deserve to be there, and they can go farther. We must enable children to be specific about this early in life via education.
What Challenges do Female Entrepreneurs Face?
Although we cannot dispute that females have begun establishing enterprises over the last decade, they still face some challenges. Even though over 252 million female entrepreneurs worldwide continue to struggle to overcome the daily hurdles they confront.
Here are a few examples of the many inequities that female entrepreneurs encounter worldwide:
- Social expectations: In a society where everyone takes females as those who should stay at home and spend most of their time with their families, it is generally frowned upon to leave the house and pursue a job. Not only that, but they typically take longer than their male colleagues to achieve public trust and recognition after starting a business.
- Lack of capital: “Money is to a business what nourishment is to the human body, and is necessary for any business, big or little,” as the saying goes. Unfortunately, even after women have demonstrated time and time again that they are more than capable, people still find it difficult to believe and are hesitant to engage in a business endeavor founded by a woman entrepreneur.
- Lack of support: Another big stumbling block for female entrepreneurs is a lack of mentors and advisors. According to a survey, 48 percent of female entrepreneurs lack mentors and advisors, which hampers their professional advancement. In a world where men control high-level business, it might be difficult for females to flourish in their fields unless they have someone to teach them the way.
- Women do not belong to business networks: According to a survey, females do not belong to business networks that would assist them in developing a network to help them grow their business, locate clients, partners, suppliers, and build relationships, among other things that come naturally to male entrepreneurs.
- Lack of confidence: Many females lack confidence and require assistance appreciating their abilities and value to businesses and organizations. Women frequently underestimate their skills and need a great deal of help to build trust and recognize their worth.
- Personal and professional life balance: It’s an unspoken law that we expect females everywhere to care for their homes while also running a successful business. Finding the perfect balance between them is critical, but sadly, we expect females to prioritize their families over their careers in our society.
In the field of entrepreneurship, women are underrepresented. In the EU in 2018, women were almost 60% more likely than males to be self-employed, and this gender difference begins at a young age.
Young women (20-29 years old) were roughly 60% more likely than young men to be self-employed. While the gender gap has narrowed marginally across all age groups, this is mainly due to a decrease in male self-employment rather than an increase in female self-employment.
Various variables contribute to the gender gap in entrepreneurship, including social views regarding women in the workplace, distinct motivations and goals in entrepreneurship, and different and more significant impediments to business development (e.g., a lack of entrepreneurship skills, failures in financial markets).
Among racial and ethnic groups, Asian workers led the way in hiring. In 2014, nearly one-third of self-employed Asians (31%) had paid workers. In comparison, 25% of self-employed whites, 18% of Hispanics, and 15% of blacks are self-employed. By nativity, Americans born in the United States were slightly more likely than immigrants to have employees, with 24 percent vs. 22 percent.
There is a significant difference in hiring self-employed workers in incorporated and unincorporated enterprises. In 2014, nearly four out of ten self-employed employees (41%) with incorporated businesses had at least one paid employee, compared to 13% of those with unincorporated businesses.
Variances influence the number of jobs created by different self-employed employees in hiring rates. The average number of personnel employed is also a factor. Those who are more inclined to hire are likewise more likely to have more employees on average.
Policymakers routinely encourage and support women’s entrepreneurship through specific policies and programs. Promotion of female entrepreneurs as role models, entrepreneurial training, coaching and mentorship, and specialized finance programs are all standard techniques (e.g., grants, microcredit).
Many countries are working on new policies to provide more personalized assistance for growth-oriented female businesses. Dedicated business incubators and accelerator programs for women entrepreneurs and the development of reliable risk capital infrastructure are among these initiatives.
There are many ways that girls’ education benefits economies and societies. Yet an estimated 130 million girls will never set foot inside a classroom. This not only means that they’ll lose out on opportunities for better futures, but that the same will happen to their own children.
Children of mothers who complete basic primary education, generally have better access to quality education and healthcare themselves. These are two of the basic building blocks of an empowered community. Child marriage, lack of adequate sanitation (especially for girls who are of menstruating age), and gendered violence in the classroom are some of the obstacles specific to girls when it comes to this very basic human right.
A 2020 World Economic Forum (WEF) report suggests that, if we keep at our current pace of correcting this imbalance, it will be another 100 years until women receive equal pay for equal work.
This isn’t necessarily an issue that’s divided between high-income and low-income countries, either. While that same WEF report ranks Burundi and Austria at approximately the same level of progress to closing their overall gender gap, Burundi is actually ahead of Austria in closing the gender wage gap by nearly 30 percentage points. Rwanda, which is one of the top 10 countries making progress towards closing the gender gap, still has work to do on closing the pay gap, and outranks the United States in both overall and wage gap-specific progress.
Ensuring that women not only earn the same salaries as their male counterparts but also get the same access to economic independence boosts economies. It also means that other basic needs, like healthcare, education, and adequate food and water, are more likely to be available for the whole family.
We can’t wait for gender equality in business for yet another 170 years. We hope we can move our gender equality clock ahead soon, not backward, but just one tiny step at a time.
Male and female entrepreneurs pursue entrepreneurship for more or less similar reasons. As a result, governments must give each equal opportunity to pursue an entrepreneurial route to contribute to economic and social progress.