More than 126 million women entrepreneurs were starting or running new businesses in 67 economies in 2012, according to the Global Entrepreneurship Monitor (GEM) 2012 Women’s Report (pdf), the most comprehensive research ever conducted about the entrepreneurial activity of women across the globe. This unique research is sponsored by Babson College, Universidad Del Desarrollo, and the University Tun Abdul Razak.
An estimated 48 million female entrepreneurs and 64 million female established business owners currently employ one or more people in their businesses.
Seven million female entrepreneurs and five million established business owners are expected to grow their ventures by at least six employees in five years.
Still, the Report found that much needs to be done for women entrepreneurs to further boost and grow their businesses. Women entrepreneurs need more resources and better programs to:
Build new collaborations and leverage ideas
Develop entrepreneurial abilities and attitudes
Access the means necessary to expand their businesses and generate jobs
“In most economies around the world, there are fewer women than men starting and running new businesses, but there are even fewer running mature ones,” said Babson College Professor Donna J. Kelley, the Report’s lead author. “This raises a red flag about the ability of women to easily transition from starting to sustaining their businesses.”
According to the Report, women entrepreneurs are drawn more to the consumer-industry sector while men continue to dominate the capital and knowledge-based manufacturing and service sectors. In Europe and the United States, women are as highly-educated, or more so, than men. Yet, they are less likely to believe they have the capabilities for starting businesses.
“Even though women may have more years of education, it may not relate to self-perceived confidence in their entrepreneurial capabilities,” said Candida G. Brush, Report author and Distinguished Professor in Entrepreneurship, Babson College. “In developed economies, entrepreneurship is opportunity driven and women, who are well-schooled in other disciplines than entrepreneurship, may question their ability to identify, assess and act on an opportunity.”
The 2012 GEM Women’s Report, conducted in 67 economies, examines the rates and nature of female participation in entrepreneurship around the world and contrasts these findings with male rates. This unique research analyzes how many women are participating in entrepreneurship, the types of businesses they are starting or operating, their motives and aspirations for this endeavor, and their attitudes about entrepreneurship. The GEM Women’s Report is authored by Professors Donna J. Kelley, Candida G. Brush, Patricia G. Greene of Babson College and Yana Litovsky, Data Team Supervisor, The Global Entrepreneurship Monitor.
“Entrepreneurship is increasingly recognized as the driver of economic growth and societal well-being,” said Babson College President Kerry M. Healey, “The GEM research shows that women’s participation in entrepreneurship differs around the world, as does their impact on job creation and innovation. The report’s findings suggest new ways to enable aspiring women entrepreneurs to overcome the unique challenges they face and, in the process, contribute significantly to economic development.”
Full 2012 Global Women’s Report (pdf) »
Among the report’s key findings:
Activity and Profile of Women Entrepreneurs
Women’s participation in entrepreneurship varies markedly around the world. In Pakistan, women entrepreneurs represent only 1 percent of this gender’s population, while 40 percent of women in Zambia are engaged in this activity.
The highest regional female Total Entrepreneurial Activity (TEA) levels are found in Sub-Saharan Africa, where 27 percent of the female population on average is engaged in entrepreneurship. Latin American and Caribbean economies show comparatively high levels as well (15 percent).
The MENA/Mid-Asia region (Algeria, Egypt, Iran, Pakistan, Palestine, Tunisia) reports the lowest average TEA levels among women (4 percent). Developed Europe and Asia, and Israel also show low rates (5 percent).
In just seven economies (Panama, Thailand, Ghana, Ecuador, Nigeria, Mexico, and Uganda), women had equal or slightly higher levels of entrepreneurship than men. For the rest, women represented a smaller share of the entrepreneur population.
TEA rates tend to be higher than established business activity. In Sub-Saharan Africa and Latin America and Caribbean, female TEA rates are high; however, there are less than half as many women established business owners on average in each region. For the MENA/Mid-Asia region, women’s TEA rates are already low, but established business ownership is only one-fourth the level of female TEA.
Sub-Saharan Africa has a high TEA rate for both women and men, but also registers many business stops among women, and at a higher level than for men. . In contrast, the MENA/Mid-Asia region also has a high number of stops, but there were fewer starts (TEA). In the United States and developing Asia, relatively few women are stopping, and this reality is accompanied by high TEA rates.
Women in developed Europe are slightly more likely to have a higher proportion of exits due to lack of profitability than do men, with nearly half the women discontinuing for this reason. For women exiting businesses in the United States and Israel, nearly one-third and one-fourth, respectively, cite problems with finance, a much higher proportion than men.
Business Profile: Industry and Team
On average in every region, at least half the women entrepreneurs operate in the consumer sector—accounting for as much as four-fifths of the women entrepreneurs in Sub-Saharan Africa. Men often compete in the consumer sector as well, but display much more diversity in industry sector participation.
The percentage of women entrepreneurs who are sole owners of their ventures ranges from just over half in developing Europe to nearly nine-tenths in Israel. There are still many single-founder businesses at the established phase; again, Developing Europe shows the lowest level (61%) while Israel shows the highest (86%). Men are generally more likely to work with one or more co-founders.
Age and Education
In most regions of the world, entrepreneurship is as popular among young women (18-34 years) as it is for their older counterparts (35-64 years). Among women in both Developing Europe and Israel, youth rates are on average 63 percent higher than rates of older entrepreneurs.
The lowest levels of education are found in Sub-Saharan Africa, where about 15 percent of female entrepreneurs have a post-secondary degree (college) or higher. The highest levels of post-secondary-graduate entrepreneurs can be seen in the United States, where 70 percent of women entrepreneurs achieve this level of education, which is higher than for non-entrepreneurs/non-business owners and relatively similar to men.
Household Size and Income
The average household size for female entrepreneurs ranges from three people in Europe and the United States to five people in Sub-Saharan Africa and MENA/Mid-Asia.
Women entrepreneurs in Sub-Saharan Africa, MENA/Mid-Asia, and Developed Asia are more evenly distributed across household income levels. In Latin America, Developing Asia, Europe (Developing and Developed) and the United States, 43 percent or more of women entrepreneurs come from households in the highest one-third income category. In Israel, however, women are over half as likely to be in the middle one-third income group.
Attitudes About Entrepreneurship
Sub-Saharan Africa and Latin America show the highest perceptions of opportunities on average; 69% of adult women believe there exist many opportunities for entrepreneurship in their areas. The lowest average perceptions of opportunities are in Developed Asia (19 percent) and Developing Europe (26 percent). Compared to men, women have lower opportunity perceptions in all regions, with the greatest difference visible in the MENA/Mid-Asia region.
Self-assessment of Entrepreneurial Capabilities and Fear of Failure
In every economy, women have lower perceptions of their entrepreneurial capabilities than men. The region with the highest average level of perceived capabilities among women is Sub-Saharan Africa (73 percent), while Developed Asia (16 percent) shows the lowest regional average.
In every region, women have, on average, a greater level of fear of failure than men. This indicator is lowest among women in Sub-Saharan Africa (25 percent), followed by Latin America and the Caribbean (31 percent). In contrast, regions with the highest perceived fear of failure include Developed Asia (47 percent), Israel (52 percent), and Developed Europe (45 percent).
Motivation – Necessity vs. Opportunity
Opportunity motivation generally predominates in all regions, but it is most prevalent in developed economies, where it is the principal motivation for three-fourths or more of women entrepreneurs. Economies with the highest levels of opportunity motivation are found in Developed Europe, where 73 percent of women start businesses primarily to pursue an opportunity.
Sub-Saharan Africa and MENA/Mid-Asia show high levels of necessity motives among women entrepreneurs; on average, 37 percent and 36 percent, respectively, start businesses out of necessity. Sub-Saharan Africa and Latin America/Caribbean show a large gender gap, where necessity motives are higher for women entrepreneurs than for their male peers.
Across regions, Sub-Saharan Africa exhibits the highest average intentions (52 percent of women intend to start a business in the next three years). Developed Europe shows the lowest average intentions (8 percent of women). In nearly every economy, men have higher rates of entrepreneurial intentions than women.
In the United States, there is one person intending to start a business for every entrepreneur. In all other regions, there are more people with intentions than actually taking steps to start. The ratio of intentions to actual starts is similar for women and men in most regions. The greatest discrepancy is found in MENA/Mid-Asia, where for every female entrepreneur, six intend to start, but for every male entrepreneur, only two and a half express intent.
The highest percentage of women who personally know an entrepreneur can be found in Sub-Saharan Africa (59 percent). Developed Asia has, on average, the lowest percentage of female respondents who know an entrepreneur (21 percent). In no economy are women more likely than men to know entrepreneurs.
Impact and Future Expectations
Innovation levels are highest among women entrepreneurs in the United States; 36 percent report their products or services are new to some or all customers with few competitors. Innovation levels for U.S. women are slightly higher than those for men. Developed Europe also reports high innovation levels for women entrepreneurs (32 percent), equal to those of men. Developing Asia reports the lowest level of innovation among women entrepreneurs (17 percent), lower than the innovation level among men.
Number of Employees
In most regions, women are more likely to operate without employees than are men. The highest rates of single person businesses, especially among women, are seen in the Latin American and Caribbean region, where half or more of new and established business owners operate without employees. In Developing Europe, 80 percent or more of women business owners operate with employees.
The largest gender differences for single-person operations in both new and established businesses exist in MENA/Mid-Asia and Israel. Female business owners are 60 percent more likely than their male peers to operate without employees in MENA/Mid-Asia. In Israel, women business owners are more than twice as likely to do so.
Growth projections are consistently lower for female vs. male entrepreneurs. A little more than one-tenth of women entrepreneurs in Developing Asia and Sub-Saharan Africa expect to have more than five additional employees in five years. One-fourth of women entrepreneurs in Developed Asia and Developing Europe also project this level of growth. For both women and men in each region, fewer established business owners anticipate growth of more than five employees over the next five years; only 2 percent of women established business owners in Developed Europe project this level of growth.
Female entrepreneurs in most developing regions report lower levels of internationalization than male entrepreneurs. Developing Europe (24 percent) and Israel (27 percent) show the highest level of internationalization among women entrepreneurs. The United States and Latin America and Caribbean, have the second lowest among the regions (7 percent).
Developing regions show smaller average differences between female and male business owners in the percentage who sell at least 25 percent of their products or services outside their national borders. Developed economies show greater gaps, with more men engaged in international trade than women. Israel presents an exception, with men less likely to sell outside their national borders.
Full 2012 Global Women’s Report (pdf) »
Donna J. Kelley, Associate Professor of Entrepreneurship. Frederic C. Hamilton Chair of Free Enterprise, Babson College
Candida G. Brush, Chair, Entrepreneurship Division, Director, Arthur M. Blank Center for Entrepreneurship and Franklin W. Olin Distinguished Professor in Entrepreneurship, Babson College
Patricia G. Greene, Paul T. Babson Chair in Entrepreneurial Studies, Babson College
Yana Litovsky, Data Team Supervisor, Global Entrepreneurship Monitor
The Global Entrepreneurship Monitor (GEM) is a not-for-profit academic research consortium that has as its goal making high quality information on global entrepreneurship activity readily available to as wide an audience as possible. GEM is the largest single study of entrepreneurial activity in the world. Initiated in 1999 with 10 countries, GEM 2012 conducted research in 69 economies all over the world.
About Babson College
Babson College is the educator, convener, and thought leader for Entrepreneurship of All Kinds™. The College is a dynamic living and learning laboratory, where students, faculty, and staff work together to address the real-world problems of business and society -- while at the same time evolving our methods and advancing our programs. We shape the leaders our world needs most: those with strong functional knowledge and the skills and vision to navigate change, accommodate ambiguity, surmount complexity, and motivate teams in a common purpose to create economic and social value. As we have for nearly a half-century, Babson continues to advance Entrepreneurial Thought and Action® as the most positive force on the planet for generating sustainable economic and social value.
About Universidad del Desarrollo
Universidad del Desarrollo is known not only for its academic excellence, but also for its entrepreneurial hallmark. This feature has earned it a place of privilege in higher education in Chile and Latin America a mere 20 years since it was founded.
Entrepreneurship is a characteristic that distinguishes its students and professors. It creates an interactive and dynamic environment on campus where innovation and new ideas are constant. Ethics and public responsibility, the hallmark values of UDD, are encouraged not only in the classroom, but are also put into practice in each of the activities conducted at UDD.
About Universiti Tun Abdul Razak
Universiti Tun Abdul Razak (UNIRAZAK) was established on 18 December 1997 as one of the first private universities in Malaysia. Since its inception, UNIRAZAK was among the first few private learning institutions in Malaysia to receive the SIRIM certification of ISO 9001:2000. Additionally, the University has been awarded the prestigious Multimedia Super Corridor (MSC) status, which is a testament to the University's commitment to integrating technology and innovation in its teaching and learning techniques. UNIRAZAK has rapidly established itself as a premier centre for education in its efforts to produce competitive and capable graduates.