How Women Are Growing Small Business
Why do women become entrepreneurs?
Most would point to opportunity, at least according to the most recent Global Entrepreneurship Monitor noted in the Harvard Business Review. On average, 76 percent of female entrepreneurs worldwide launch a business for that reason, compared with 70 percent of men.
However, there are 126 million female entrepreneurs starting or running a new business in 67 countries. And 224 million women hold leadership positions worldwide, so clearly no two female entrepreneurs are alike, though on the whole they're reshaping the small business workforce dramatically.
To better understand this shift, and why women are integral to the future of small business, here are four interesting facts from the GEM report and others mentioned in HBR.
They're growing small business.
According to GEM, women own 37 percent of all global enterprises. An estimated 48 million female entrepreneurs and 64 million female-founded business owners manage one or more employees. But about 7 million of those entrepreneurs and 5 million of those businesses are expected to expand by at least six employees in the next five years. That might not sound like big growth, but compared with the 2010 GEM report, it is. That year, there were only 104 million women launching or running a new business, with 83 million women running an established business. GEM predicts that by 2018 there will be 9.72 million new jobs in the small-to-medium enterprises sector in the U.S.--more than half of which will come from woman-owned businesses.
In the U.S. and Asia, female entrepreneurs are seen as being more innovative than their male counterparts. The GEM report states that 36 percent of female entrepreneurs make dynamic products or services in the U.S., while only 33 percent of male entrepreneurs do the same. For the record, the GEM defines innovative as "offering products that are new to some or all customers." In Asia, 23 percent of these entrepreneurs make innovative products, compared with 22 percent of male peers.
According to another study by the International Finance Corporation, more than a third of global firms are owned by women. A report by Dow Jones states that successful venture-backed companies in the U.S. had twice the number of women on the founding team. But perhaps the most interesting trend was spotted during an analysis of 350 microfinance institutions in 70 countries: Lending to women is simply less risky than lending to men.
But not everything's perfect.
The reports weren't totally positive, and clearly women have a long road ahead of them. In the U.S. and Europe, women are 18 percent less likely to believe they have the capability to become entrepreneurs. Interestingly enough, women in developing economies are more likely to believe they have what it takes compared to strong world economies. Across all 67 countries included in the GEM report, men believe they're more capable than women--which just isn't true.