It’s a given that women entrepreneurs are critical to economies everywhere, and now more than ever they’re powering growth around the globe.
That’s the news from latest Global Entrepreneurship Monitor and its special report on women, put out on Wednesday by Babson College, which partnered with three other universities around the world for its bi-annual study.
The report studied economies including Africa, Latin America, North America and Asia, and it found that 200 million women have started or run new businesses in 83 economies across the globe. An additional 128 million women run established businesses.
Here are the five main takeaways from the study:
1. Entrepreneurship is up.
Generally speaking, entrepreneurship is up around the globe. In 61 of 83 economies, the report found that early stage business formation for women-owned companies increased 7 percent compared to 2012.
2. Necessity powers business creation.
Countries with lower per capita incomes--and higher unemployment--have higher rates of women-led entrepreneurship. In Africa, for example, the study indicates that 25 percent of the female population is in the process of starting a business, compared to 26 percent of men. Similarly, 14 percent of women in Asia and the tropical Pacific were said to be starting a new businesses, compared to 15 percent of men. By contrast, in North America, 11 percent of women compared to 16 percent of men said they were starting businesses. In Europe, in more traditional economies supported by heavy industry, the rate is six percent of women compared to 13 percent of men.
3. More working women means stronger economies.
The report found that where there is greater workforce participation by women, including in their own businesses, there is also greater economic resilience, and fewer economic slowdowns.
4. Failure is a real fear.
Women are still more risk averse than men. Forty-one percent of women said they would not take new opportunities for fear of failure, compared to 34 percent of men
5. More women-owned businesses fail.
Women-owned businesses have higher closure rates than men, which may be the result of less access to capital, running out of capital, and gender stereotypes that work against women. That’s particularly the case in many African countries. In Malawi, for example, which had the highest business closure rate in the world, women shuttered businesses at a rate of 30 percent over the past two years, compared to about 25 percent for men. Two standouts that buck the trend are China and India, where women closed businesses at some of the lowest rates globally, at between one and two percent since 2012. Women in India also have among the most innovative business ideas globally, whereas women entrepreneurs in China have less fear of failure, the report says.
”Promoting women’s entrepreneurship requires more than increasing the rate in which women start businesses,” said Donna Kelley, a professor of entrepreneurship at Babson, in a release. “Our GEM research shows that women entrepreneurs are frequently innovative, which demonstrates the impact they can have on their societies."
Babson compiled the report with Universidad Del Desarrollo, of Chile, Universiti Tun Abdul Razak (UNIRAZAK), of Malaysia, and Tecnológico de Monterrey of Mexico.