Gender and entrepreneurship

Even if women represent about half of the working age population and the education gap is closing, they tend to be underrepresented in the workforce, especially in leadership roles. This opportunity cost will cap global GDP growth to $108 trillion322 in the next six years. Achieving the full-potential scenario, where women have an equal role compared to men in all labour markets, would push global GDP to about $136 trillion by 2025.323 However, the full potential of women entrepreneurship has yet to be reached. A 2015 study by the Global Entrepreneurship Development Institute found that more than 61 per cent of the countries reviewed scored less than fifty points on the latest Female Entrepreneurship Index (FEI) worldwide.324 Only Australia was in the top 10 countries for female entrepreneurship for Asia-Pacific and there are only 3 Asia-Pacific countries listed in the top 30 of the index (in rank order: Australia; Singapore; Taiwan, China).

The Global Entrepreneurship Monitor (GEM) publishes a comprehensive report on the state of women entrepreneurship worldwide, based on a larger longitudinal data collection involving more than 100 countries annually. The 2018/2019 Women’s Entrepreneurship report, featuring 74 economies from six regions including the Asia-Pacific, highlights that over 163 million women started new businesses, and an additional 111 million are running established businesses.325 These numbers highlight the financial impact of women-owned businesses, but they also move a step further by differentiating the types of entrepreneurial activities that women are involved in, and the stage of growth of their venture. 

When measuring the Total Entrepreneurial Activity (TEA), which represents the percentage of working age adults who are new or nascent entrepreneurs, GEM uncovers that a gender gap remains, especially across types of ventures.326 Rates of female entrepreneurship in transition economies and innovation-driven economies continue to experience increasing gaps, but in the LDCs, the ratios of male/ female startups are closer.

Necessity-driven entrepreneurship signals involvement in the start- up cycle because of lack of alternatives. For a woman, the loss of a husband or being a single mother who needs to provide for the family is a poignant driver of necessity entrepreneurship.327 On the opposite side of the spectrum, opportunity- driven entrepreneurship is based on the recognition of an open niche to exploit. Necessity-driven entrepreneurship can limit the growth potential and sustainability of women entrepreneurship, eventually leading to discontinuance. Women-owned businesses close at a higher-rate than male-owned businesses. The reasons for such business mortality vary from unprofitability, lack of access to financial resources, or other personal factors. However, in innovation economies, women exit opportunity-driven ventures at a much lower rate than men, specifically at only two-thirds of the rate of their male counterpart.328 This differential rate underlines the importance of policy level interventions to support innovation-driven entrepreneurship levels beyond their current marginal levels.329

Further, other factors that are brought forward when explaining the slower growth of women entrepreneurship center on cultural differences, such as segregated gender roles. Gender stereotypes are an important source of these differences between women’s and men’s entrepreneurship. Gender stereotypes refer to beliefs generally shared by society about typical traits of women and men, and they have an effect on the professional evaluation of people.330 The typical characteristics of women (feminine) are often connected with their traditional role as homemakers, while those of men (masculine) are related to their traditional roles as providers.331 Entrepreneurs’ activities have also been traditionally associated with masculine traits.332

Box 31. ESCAP’s Women and ICT Frontier Initiative

ESCAP’s Asian and Pacific training Centre for Information and Communication technology for development has launched a new resource for women entrepreneurs in ASEAN. The Women and ICT Frontier Initiative (WIFI) aims to create socially and economically-empowered women through ICT-enabled entrepreneurship, and enhance the knowledge and skills of women entrepreneurs in business management and their use of ICT. The programme also aims to help government leaders and policymakers develop gender-responsive policies, programmes and services. WIFI employs a two-track approach: Knowledge enhancement. This includes learning the concepts and principles of women’s empowerment; the role and potential of ICT; the links with the SDGs; and planning and managing a business. ICT skills enhancement. This entails use of ICT and applications in various business functions. In addition, the WIFI Info Bank knowledge platform shows where entrepreneurs can find programmes on ICT literacy as well as business-related tools and applications. WIFI was launched in June 2016 in Incheon, Republic of Korea. Partners from government and civil society showed how the programme could benefit current and aspiring women entrepreneurs in Cambodia, Pakistan, the Philippines, Sri Lanka and Tajikistan. Technology companies including Google, Microsoft and Intel also backed the WIFI project. Subsequently, WIFI has been launched at national level in Sri Lanka in partnership with the Information and Communication technology agency and the ministry of Women and Child affairs. The launch was followed by a training of trainers and community workshops in two districts that were severely affected by the civil war.

Source: ESCAP-APCICT (2016) Women and ICT Frontier Initiative.

Resources

322 Desjardins, J. (2018). How Gender Diversity Enhances the Bottom Line. 23 January. Retrieved 2 June 2019 from Visual Capitalist website: https://www.visualcapitalist.com/gender-diversity- bottom-line.

323 Ibid.

324 The Global Entrepreneurship and Development Institute (GEDI) (2015). 2015 Female Entrepreneurship Index

325GEM Women's Entrepreneurship Report 2018/2019,

326GEM (2020). Spotlighting trends in early-stage entrepreneurial activity,

327 Alsos, G., Carter, S. & Ljunggren  (2014). Kinship and business: How entrepreneurial households facilitate business growth. Entrepreneurship and Regional Development. 26:1-2. 97-122.

328 Singer, S., & Herrington, M. (2012). Global Entrepreneurship Monitor 2011 global report. Global Entrepreneurship Research Association, London Business School.

329ICSB (2019).. The ICSB Global Annual Micro, Small and Medium Enterprises Report 2019.

330 Broverman, I. K., Vogel, S. R., Broverman, D. M., Clarkson, F. E., & Rosenkrantz, P. S. (1972). Sex-role stereotypes: a current appraisal. Journal of Social Issues, 28(2), 59–78.

331 Eagly, A. H. (1987). Reporting sex differences. American Psychologist, 42(7), 756–757.

332 Laguía, A., García-Ael, C., Wach, D., & Moriano, J. A. (2018). “Think entrepreneur-think male”: A task and relationship scale to measure gender stereotypes in entrepreneurship. International Entrepreneurship and Management Journal.