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Study: Men Twice As Likely to Start Businesses

Although companies run by men and women succeed at equal rates, a startup gender gap persists.
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While businesses run by women succeed as often as those run by their male counterparts, a gender gap remains when it comes to startup rates, according to a study conducted by the Center for Women’s Leadership at Babson College.

The 2005 Global Entrepreneurship Monitor Report on Women and Entrepreneurship surveyed more than 107,000 people in 35 countries and found that while the success rate for men’s and women’s businesses are equal in such high-income countries as the U.S. and Japan, men remain nearly twice as likely as women to start a new businesses.

The reason? “We don’t know, said Maria Minniti, associate professor of economics and entrepreneurship at Babson and lead researcher for GEM Women. “We do know that although men and women respond to the same kinds of business factors, their intensities are different. Men tend to be more optimistic [about entrepreneurship] -- we don’t know why.

The GEM Women study split the 35 participating countries into two groups based on their per capita GDP -- middle-income countries (including Argentina, Mexico, and Thailand) and high-income countries (including the United Kingdom, Canada, and Australia). In high-income countries, a significant gender gap was found in the following:

  • The overall entrepreneurial activity of entrepreneurs and business owners
  • Early-stage entrepreneurial participation
  • Established business ownership
  • Prevalence of entrepreneurs driven by opportunity

“In my own personal experience, instinctively, I would have said the exact opposite, said Donna Good, CEO of the Boston-based Center for Women and Enterprise. “We know that this is not true in America.

A GEM study that focuses solely on findings in the U.S. is now in the works, but will not be released until June 2006.

However, Gwen Richtermeyer, director of research at the Washington, D.C.-based Center for Women’s Business Research said she expects the U.S. study’s results to point to a similar divide. “In general terms, women still make 76 cents to every man’s dollar, she said. “The gender gap still exists. There are different expectations for women as far as their role. The balance between work and family is a woman’s question -- it’s not a man’s question.

The strides women entrepreneurs have made in recent years have moved the discussion to the background, Richtermeyer said, but issues still remain. “We don’t talk about the gender gap anymore, she said. “We’re a bit passive about it.

Last updated: Mar 29, 2006




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