From the Center for International Enterprise to the Harvard Business Review, business experts have agreed for several years that the world needs to support the development of women entrepreneurs. Studies are showing that when women gain access to their own financial freedom, they are lifted out of poverty, children begin to become healthier, and the overall economic status of a country improves.
Why is it that women are uniquely positioned to improve the condition of a country's economy? Is it something about women's inherent social abilities, their position in society, or something more obvious?
Let's take a look at many of the co-occurring factors that create an increasing need for more women entrepreneurs in the global marketplace.
There are only seven countries in the world where men and women own businesses at an equal rate. In most countries, women own significantly fewer businesses than men. Even in countries where women own a substantial portion of firms, they tend to perform at a lower level than businesses owned by men. In the United States, for example, women own about 30 percent of the businesses currently operating, but only employ around 6 percent of the workforce.
Bringing more women entrepreneurs into the marketplace, therefore, simply offers a chance for more successful businesses. In general, business ownership is not a zero-sum game; one company being successful does not inherently drive another out of business.
Women may be able to open businesses that cater to a different clientele or niche than their male counterparts. Overall, this accounts for improved economic growth and stability within a country.
Dramatic Target for Poverty Reduction
Organizations like the Brookings Institute have pointed out that entrepreneurship may be a way to support women who live in extreme poverty around the world. By removing barriers to entrepreneurship (credit, training, legal restrictions on property), women are able to gain incomes, advocate for their own independence, and take on a more full societal role in their culture.
Because many women are also parents, breaking the hold of poverty on the lives of women also helps to support children in nations that struggle with youth poverty.
Since removing the barriers to entrepreneurship are often easier than targeting entrenched cultural barriers that are based on religion, supporting the economic growth of women entrepreneurs is often a more advocacy-friendly goal.
More Dollars Reinvested Into Local Economy
According to entrepreneur Tory Burch, women in emerging marketplaces put as much as 90% of their earnings back into their local economy. The World Bank's VP on Poverty Reduction and Economic Management Network has stated that this is a significantly higher percentage than men generally reinvest.
This may have to do with how men are more likely to spend their earnings on personal consumables, such as tobacco or alcohol, while women are more likely to purchase items for their families or children. Whatever the reason, boosting the economic purchasing power of women clearly helps to support the local economy, creating flourishing pockets of power in a global marketplace.
Businesses owned by women are often subjected to a particularly interesting double standard. They are considered to be vastly more innovative by organizations like the United Nations, but local investors often consider them too risky to invest in due to a perceived increase risk in failure. It is important to note that no studies have found that women-owned businesses are more likely to fail than businesses owned by men.
Why are women more innovative than their male counterparts? There are many different theories put forth, from women having access to different niches than men, to having a different societal role and therefore different needs than men, to simply having a different understanding of usefulness.
Whatever the ultimate reason, it is clear that women entrepreneurs have a valuable and diverse perspective that will support the overall development of a robust global economy as we proceed farther into the 21st century.
What Is Necessary To Support Women Entrepreneurs Around The World?
The question that all forward-looking entrepreneurs should be asking themselves as the global economy continues to develop and diversify is: what can be done to support women entrepreneurs around the world? We know that women face three specific obstacles: funding, mentorship, and experience.
By supporting programs that help women learn about the world of entrepreneurship, connect them with successful female entrepreneurs, and helping them find access to high-quality credit sources, women can build strong businesses, solidify their position in the global economy and local business world, and gradually build a stronger, better marketplace.
What reasons does your company have to support women entrepreneurs in the global marketplace?