GLOBAL STUDY OF WOMEN ENTREPRENEURS FINDS NEED FOR GREATER ACCESS TO CAPITAL, MORE EDUCATION AND TRAINING AND A SHIFT IN SOCIETAL ATTITUDES TO STIMULATE AND SUPPORT WOMEN STARTING AND GROWING BUSINESSES
(Washington D.C.) December 14, 2011—Babson College today released the Global Entrepreneurship Monitor (GEM) 2010 Women’s Report, the most comprehensive study ever conducted about the entrepreneurial activity of women across the globe.
Hear/See Professor Donna Kelley's presentation of the findings.
This unique research, conducted in 59 economies, surveys individuals rather than firm registrations, analyzing how many women are participating in entrepreneurship worldwide, the types of businesses they are starting or operating, their attitudes about entrepreneurship and the challenges they face in starting and growing their businesses. The GEM Women’s Report is authored by Professors Donna J. Kelley, Candida G. Brush, Patricia G. Greene of Babson College and Yana Litovsky, GEM Data Manager.
The report findings were featured today at the Spurring Global Economic Growth: Unlocking Capital for Women Entrepreneurs event hosted by the World Bank. This event included the announcement of a new access to capital public-private partnership between the Government of Denmark, Goldman Sachs 10,000 Women, and the U.S. Department of State and a moderated discussion with:
- Christian Friis Bach, Minister for Development Cooperation, Government of Denmark
- Patricia G. Greene, Paul T. Babson Chair in Entrepreneurial Studies, Babson College
- John F.W. Rogers, Chairman, Goldman Sachs Foundation
- Melanne Verveer, Ambassador-at-Large for Global Women’s Issues, U.S. Department of State
- Robert B. Zoellick, President, World Bank Group
- Moderated by Nina Easton, Washington Columnist, Senior Editor, and Co-chair Most Powerful Women Summit, Fortune.
“Women entrepreneurs are a vital source of growth that can power our economies for decades, yet they face tremendous challenges to their full economic participation. The GEM Women’s Report provides important data which is critical to our understanding of women-run SMEs,” said Melanne Verveer.
The Report found that, in 2010, more than 104 million women between 18–64 years old were actively engaged in starting and running new business ventures, contributing significantly to entrepreneurship in all 59 economies studied. Another 83 million women were running established businesses that they started over 3½ years earlier. Taken together, 187 million women were involved in creating and operating enterprises, ranging from just over 1.5 percent to 45.4 percent of the adult female population in these 59 economies. Although entrepreneurial activity among women is highest in emerging economies (45.5 percent), the proportion of all entrepreneurs who are women varies considerably among the economies: from 16 percent in the Republic of Korea to 55 percent in Ghana—the only economy with more women than men entrepreneurs. A multi-year analysis shows that this gender gap has persisted across most economies for the past nine years (2002–2010).
Among the report’s key findings:
Activity and Attitudes
- Overall, women are less likely to venture into entrepreneurship than men, and this occurs with greater magnitude in particular economies. In most economies, more women than men are motivated by necessity when starting a business but the gap may be closing with time. Necessity motives for women are highest in less-developed economies, then becomes less of a motivating influence as economies develop and grow. In the most developed economies, 72.3 percent of women start businesses because they recognize opportunities, rather than out of necessity (because they need a source of income and have no other job options).
- In emerging and developing economies, more women start new businesses than manage established ones. This reverses in developed economies where, like their male counterparts, more women are established business owners than entrepreneurs.
- Similar to men, women are just as likely to see entrepreneurship as attractive, but they are less likely to believe there are a lot of opportunities for starting businesses in their area. In fact, during a nine-year span (from 2002–2010), this report shows that these perceptions about entrepreneurial opportunities declined among women in most developed economies. Additionally, women are more likely dissuaded from entrepreneurship due to fear of failure and they are less likely than men to display intentions for starting businesses.
- In societies where women perceive they have the capabilities for entrepreneurship, there is a greater likelihood women will also perceive entrepreneurial opportunities. However, fewer women (47.7 percent) than men (62.1 percent) believe they have the capabilities to start and run businesses.
- Education levels of entrepreneurs rise in proportion to their country’s phase of economic development. In the most developed economies, women entrepreneurs outpace their male counterparts with regard to secondary-level education. Women entrepreneurs in wealthier economies tend to be older, as well educated, and just as likely to create innovative products as their male peers; yet they have half the growth expectations of men.
- Women entrepreneurs in developed economies are less likely give up their businesses, but when they do, lack of financing, unprofitable businesses, or personal reasons are the usual causes.
- Growth expectations for women entrepreneurs were lower than for men in all three economic development levels. In developed economies, twice as many men as women expected to add 20 or more employees to their companies.
- Innovation is logical. More women entrepreneurs introduce innovations (new products and services) in developed economies. And there is no gender gap here. Just as many women as men are innovative, especially in developed economies.
- Many economies have initiated programs aimed at building women’s capabilities for starting and growing businesses, highlighting their accomplishments, enhancing their networks, and providing advice and mentoring. The report highlights programs in eight countries, and also includes a description of the Goldman Sachs 10,000 Women project.
GEM researchers offer several general guidelines that may help resolve challenges facing many women entrepreneurs today, including:
- Assist women business start-ups through the availability of opportunities and resources;
- Support women’s business growth with technical assistance and education; and,
- Promote societal attitudes toward entrepreneurship, and in particular, women’s engagement in entrepreneurship.
“Most economic policies around the world are made by individuals educated primarily about the world of big business and functioning in their roles to support such businesses,” commented Professor Donna J. Kelley, Associate Professor of Entrepreneurship at Babson College and the lead author of the GEM Women’s Report. “At the same time, most of the businesses in the world are small to medium-sized firms and the majority of the world’s workforce is employed in these businesses. Therefore, blanket policies that take the perspective of large companies, or that fail to consider differences between women and men, or even among groups of women, will likely fall short in facilitating the growth of economies around the world. Policies will need to consider this diversity and its relationship to motivations, attitudes, and approaches to start-up and growth, as well as the frequency and profile of women’s entrepreneurship. As women continue to emerge as key participants in the entrepreneurial phenomenon, they will contribute increasingly to economic development, innovation and the societal value of their communities and the world.”
- 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, Global Entrepreneurship Monitor
GEM Women’s Report Sponsors
- GERA and GEM
- Babson College and the Center for Women’s Leadership at Babson College
- Center for Women’s Business Research
- Universidad Del Desarrollo
- University Tun Abdul Razak
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 2010 conducted research in 59 economies all over the world. Visit http://www.babson.edu/academics/centers/blank-center/global-research/gem/pages/home.aspx or http://www.gemconsortium.org/
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. For information, visit www.babson.edu.