There are more than 126 million active women entrepreneurs in 67 national economies worldwide, according to the recently released Global Entrepreneurship Monitor Women’s Report. That’s just slightly less than the population of Japan. In addition, the report points to the 98 million established businesses run by women, bringing the total number of women business owners globally to 224 million!
While these are impressive numbers, the report concludes that there is still much to be done to fully tap the entrepreneurial potential of women to help grow the world economy.
Wide Participation Gaps Across Geographies
More than 112 million of these female business leaders have one or more employees and 12 million of them expect to grow by at least six employees in the next five years. The report stresses that it’s critical to continue to support the growth of women-based business and that failure to do so deprives the world economy of nearly half of its human resources.
In every economy, female entrepreneurs lag behind their male counterparts in terms of percent of the population but there are wide differences of female participation across different nations. The gap ranges from only a 1% Total Entrepreneurial Activity (TEA) rate in Pakistan to nearly 40% in Zambia. The most fertile region for woman entrepreneurs is sub-Sahara Africa, which boasts a 27% TEA. The lowest rate occurs in mid-Asia at 4%. Europe, Asia and Israel aren’t much stronger with a TEA of 5%.
U.S. Women Lead the Innovation Economy
The United States reports a 10% female TEA rate compared to 15% for American males. Women entrepreneurs in the U.S. tend to be better educated than American men who are entrepreneurs (70% with college degrees compared to 67% of male business owners) but still suffer from lack of confidence. Forty-seven percent of women have a perception of capability to start and run their own business compared to 65% of U.S. men. More U.S. women have a greater fear of failure (35%) compared to only 30% for American men.
Nearly half (47%) of U.S. women entrepreneurs come from the top third of household incomes but 32% are middle class, compared to only 19% of men in the middle third income level. Women exiting the business world are twice as likely as men to cite finance as the main cause.
When it comes to innovation, however, U.S. women entrepreneurs are leading the way. Thirty-six percent of US female business owners are engaged in innovative products and services, the most of any region in the world. That compares to 17% of U.S. men focused on the innovation sector.
More Work To Be Done
The report concludes that there needs to be a focus on three main areas to help grow female entrepreneurship:
- Stronger women-based support networks. The findings showed that women were effective at using personal resources but were not leveraging the resources of others. There is a growing need for more female mentors and role models, and women need to be encouraged to reach out to these networks.
- Better education and training of women entrepreneurs. The report stated that raising the skill and confidence level and improving self-perception of women business leaders in many societies is key to growth.
- More government support. The report called on governments around the world to study the results in this report and use them as a basis for new initiatives that support the growth of women entrepreneurship.
Here is a link to the full report.