Women’s Entrepreneurial Activity Up 10 Percent, Closing the Gender Gap by 5 Percent Since 2014
Over the past year, 163 million women started businesses across 74 economies worldwide—this according to the Global Entrepreneurship Monitor (GEM) 2016/17 Women’s Report, released in conjunction with sponsors Babson College, Smith College, Korea Entrepreneurship Foundation, Tecnológico de Monterrey, Universidad Del Desarrollo, and Universiti Tun Abdul Razak.
“This not only shows the magnitude of impact women entrepreneurs have across the globe, but highlights the contribution they make toward the growth and well-being of their societies,” said Babson College Professor and report co-author Donna Kelley. “Women entrepreneurs provide incomes for their families, employment for those in their communities, and products and services that bring new value to the world around them.”
Among the 63 economies surveyed in both this and the last report, GEM found that Total Entrepreneurial Activity (TEA) among women increased by 10 percent, and the gender gap (ratio of women to men participating in entrepreneurship) narrowed by 5 percent.
These same economies show an 8 percent increase in women’s ownership of established businesses, and a near 10 percent increase in women’s opportunity perceptions across Europe, North America, and Asia.
The 2016/17 GEM Women’s Report also adds a new consideration—that of women as entrepreneurial investors. While participation rates vary, the participation of women as investors suggests a strong resource foundation from which business owners may build.
GEM economies in the 2016/17 survey cover 69 percent of the world’s population and 85 percent of the world’s GDP. In its 18th consecutive year, GEM continues to serve as the largest and most comprehensive single study of entrepreneurship in the world.
According to the Global Entrepreneurship Monitor (GEM) 2016/17 Women’s Report:
Entrepreneurial intentions increased among women by 16 percent from 2014 to 2016 across all economies that participated in both this report and the previous one.
Although intentions increased globally, self-perceptions around opportunity and capability vary significantly between development levels.
- 57 percent of women in factor-driven economies believe there are good opportunities around them for starting a business, while only 39 percent of women in innovation-driven economies hold these same beliefs.
- 67 percent of women in the factor-driven group believe they have the capabilities to start a new venture. Under 35 percent of women in the innovation-driven group feel the same.
- On average, women exhibit a 20 percent or greater likelihood of citing necessity as a motive for starting a new business when compared to men. However, opportunity still accounts for the majority of entrepreneurial motives.
- In the innovation-driven group of economies, women are over three and a half times as likely to cite opportunity versus necessity motives.
Interestingly, GEM found that women entrepreneurs have a 5 percent greater likelihood of innovativeness compared to men. The highest level of innovation occurs in North America, where 38 percent of women report having innovative products and services.
Women in sub-Saharan Africa and Latin America are more likely than men to state they had exited a business in the past year, and around 56 percent cite either unprofitability or lack of finance as a reason. Discontinuance levels among women are lower than men in Asia, Europe, the Middle East, and North America—this is consistent with lower startup levels compared to men in these regions.
Ten percent of all women entrepreneurs operate their businesses solely and have no intentions to add any employees in the next five years. Europe has the highest frequency of one-person female business activity, while North America has the lowest.
Sub-Saharan Africa maintains the highest regional average TEA rate and strong average growth expectations, which translates into a lot of employment by women entrepreneurs in this region.
The MENA region reports the highest average female growth expectations at 37 percent. Over half of the women entrepreneurs in UAE, Qatar, and Tunisia expect to hire six or more employees in the next five years. Moreover, women in Saudi Arabia and Morocco are more likely than men to have these ambitions.
North America shows the highest education rates among women entrepreneurs, with 84 percent having earned a post-secondary or higher education qualification. Europe is notable for having more highly educated women than men entrepreneurs: 22 percent more, on average.
“Although the gender gap in education and labor force participation decreases at higher stages of economic development, we find that the entrepreneurial gender gap not only persists but increases,” says Smith Economics Professor and report co-author, Mahnaz Mahdavi. “By providing entrepreneurial education, colleges and universities can improve women’s competencies and increase their rate of business startup to more closely match that of men.”
Women participate in entrepreneurship at equal or higher levels than men in Indonesia, Philippines, Vietnam, Mexico, and Brazil.