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Revisiting The Gender GAP In Women's Entrepreneurship: What Holds Women Back?

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Last week we released the Global Entrepreneurship Monitor (GEM) Women’s Report which describes the activity and contributions of women entrepreneurs across 67 economies around the world.

We find that an estimated 126 million women are running new businesses and an additional 98 million are running established businesses. Not only are these women creating jobs for themselves, but also they employ others, plan to grow and are actively innovating new products and services. Besides this good news, for the first time there are seven economies (Panama, Thailand, Ghana, Ecuador, Nigeria, Mexico and Uganda) in which the rate of women’s start-up was slightly higher or equal to that of men. And, there is more good news! We find stable patterns of women’s venture creation in most economies, participation across all industry sectors and in many countries, rising entrepreneurial intentions among women.

Even though there is much good news about the contributions and participation of women entrepreneurs around the world, there are some findings that suggest policymakers and educators still have work to do to level the playing field, so that all entrepreneurs (not just men) can participate in the development of robust economies.  We found that women tend to be more often motivated by necessity than opportunity, have less confidence in perceptions of their capabilities to start a venture and have a higher fear of failure.  While these suggest challenges for women, we need to put these findings in context.

Notably, there is evidence that necessity motivated ventures may be more likely to survive and can be just as profitable as opportunity motivated ventures (Carsrud & Brannbac, 2011, Entrepreneurial Motivations, Journal of Small Business Management, 49:1, 9-26; Robb & Watson, 2012, Journal of Business Venturing, 27: 544-558; or Coleman & Robb, 2012, Rising Tide: Financing Strategies for Women-owned Businesses, Elgar Publishing).  On the other hand, lower perceptions of capabilities to start a business and fear of failure may be culturally or institutionally explained if we consider that entrepreneurship in many countries and industry sectors is male-dominated and there are fewer role models.  This parallels other environments like politics, or investment banking where women lack role models and are breaking a gender barrier, so it is not surprising that we find lower capabilities perceptions and more cautious approaches.

More important, while the participation and contributions are significant, and progress of women’s entrepreneurship is substantial over the past 15 years of the GEM studies, many of the media got it right and focused on the expansion of women’s entrepreneurship world-wide, the challenges and contributions. But on the other hand, it is really shocking to see that other major media chose to frame this report in the negative—for example, headlines with phrases like “Women Lack of Confidence”  “Women Entrepreneurs have Fear of Failure”.

I have two reactions- first, it is well known that the media can shape perceptions and influence how people think. Most people will not read the article but when they see the words “women entrepreneurs and failure” they will draw a conclusion- “women fail at entrepreneurship”.  For companies who may consider doing business with women entrepreneurs this headline would be a deterrent-why do business with a woman-owned firm?  For policy makers who might be thinking about programs, this headline would suggest that a focus only on male entrepreneurs is appropriate.  Then what about aspiring women entrepreneurs? These headlines are especially discouraging because they reinforce gender stereotypes and erect subtle gender barriers that prevent women from considering entrepreneurship as a viable career opportunity.

Second, if the data was about male entrepreneurs, would the same headlines be published? I seriously doubt it because it would not be politically correct and would contradict the predominate image of the successful heroic {male} entrepreneur --Rockefeller, Carnegie, Gates, Bezos and Jobs.  The male-gendering of entrepreneurship has been portrayed in the popular media for decades and even in academic case materials, where the protagonists of entrepreneurship cases are almost always male (see for instance, Baker, Aldrich & Liou, 1997, “Invisible Women Entrepreneurs”, Entrepreneurship and Regional Development, 9: 221-238;  Achtenhagen & Welter, 2011, “Surfing on the Ironing Board”  Entrepreneurship and Regional Development, 23: 763-786). The perpetuation of this gender stereotype means that because women do not fit the gender stereotype for “entrepreneur” they face higher hurdles in starting, growing and sustaining their ventures, as we noted in our 2004 book, Clearing the Hurdles (Prentice Hall).

I have studied women’s entrepreneurship for more than 35 years, and published more than 60 academic books and articles. For years, I and my colleagues in the Diana Project and Diana International have conducted significant scholarly research on women’s entrepreneurship.

One of the most important things we have learned over the years is that societal perceptions which are often created by the media make a difference for all entrepreneurs encouraging or discouraging entrepreneurial behavior, and more importantly, influence bankers, venture capitalists, policy-makers, service providers and others who interact with entrepreneurs.  It is time that the media focuses less on sensational headlines, and instead considers the impact of their work on the perceptions about women entrepreneurs.  So what holds women back? I would say, in some cases, it is the media.