Where might future economic growth come from? With slower productivity gains, aging populations, and the persistent uncertainty of recent years, it is a pressing question. Despite the challenges we face, I remain optimistic. And that is partly thanks to the ingenuity and energy of the entrepreneurs I get to meet every day.
Innovation and business risk-taking have powered growth and progress throughout history. But this vital engine of prosperity has only fired on half its cylinders for most of that time. Global entrepreneurship has long been male dominated. The underrepresentation of women is starkest in some of the most important growth industries, especially technology.
But what if we could change this and unlock the vast, unrealized potential of female entrepreneurship? I believe addressing gender inequity here could have invaluable benefits. More female business founders would foster fresh perspectives—including a better understanding of more than half the world’s consumers—novel products and services, and potential for doing things differently.
What if we could unlock the vast, unrealized potential of female entrepreneurship?
The boost to fairness in our society could be far-reaching. For example, achieving gender parity in entrepreneurship would further reduce inequity in the world of work, given that women-owned businesses are likelier to employ more women. Women also tend to devote a larger share of their income to the health, education, and welfare of their families and communities, creating further social gains.
If we reached gender parity in business growth, it could add $2 trillion to the global economy—around 2–3 percent of GDP—according to Citi Global Insights. As part of this growth, the number of jobs worldwide could increase by as much as 433 million, benefiting the entire global population.
While the potential is obvious, the journey to gender parity in entrepreneurship is anything but straightforward. There are countless obstacles entrenched in the way we do business today, and good intentions alone are not enough to eliminate them. They include inadequate access to financing, which makes it hard for women to found and grow their ventures, as well as less developed business ecosystems for women.
Attitudes, conscious and subconscious, also play a major role. One damaging view is that women- owned businesses may somehow be riskier. Women founders face questions from potential investors that men often do not, especially about whether they can balance building an enterprise with raising a family. The venture capitalists and other financiers who make key funding decisions are overwhelmingly men. Faced with business ideas that address women’s needs, a commonly heard response is, “I’ll ask my wife what she thinks.”
Despite such barriers, women entrepreneurs continue to advance. Globally, women are now 80 percent as likely to be entrepreneurs as men, up from less than 66 percent in 2002. Encouraging as this is, the headline numbers do not tell the full story. Venture capital funding in particular is still directed overwhelmingly toward male entrepreneurs.
So, what can we do to address these inequities? This is something I always ask women who have successfully broken through the barriers to create some of the most dynamic businesses in their fields.
A change in mindset and greater gender diversity in the financial ecosystem are long overdue. This means, for example, involving many more women in the decision-making processes around funding early-stage businesses, such as on the investment committees of venture capital firms.
Continuous personal development is another behavior of many successful entrepreneurs. Young women starting out are often less confident than they should be about their personal branding, storytelling, and negotiating. As their businesses flourish, becoming effective leaders requires new skill sets. Besides mentoring, structured programs can help with these challenges.
Networks are also vital. Entrepreneurship can be very lonely, especially when first starting out. Having experienced contacts who can provide mentoring and guidance in the business world is therefore vital for any company founder. Joining a formal community for entrepreneurs can also be particularly effective. Women who benefit from this typically then seek to “pay it forward” by helping the cohorts after them.
Female entrepreneurship has the potential to help transform our world. And just as it can benefit everyone, we all have a part to play in making it happen.