More Than 250M Women Worldwide Are Entrepreneurs, According to the Global Entrepreneurship Monitor Women's Report from Babson College and Smith College

WELLESLEY, Mass., Nov. 18, 2019 /PRNewswire/ -- Approximately 252 million women around the world are entrepreneurs and another 153 million women are operating established businesses, according to the Global Entrepreneurship Monitor 2018/2019 Report on Women's Entrepreneurship, released today by Babson College and Smith College and sponsored by the Korea Entrepreneurship Foundation. This 2018/2019 report provides analysis from 59 economies, aggregating data from two GEM data collection cycles, 10 economies reporting in 2017 and 49 reporting in 2018.

The Global Entrepreneurship Monitor (GEM) was initiated in 1999 as a joint venture of Babson College and the London Business School.

"This report considers women's entrepreneurship within the context of entrepreneurship ecosystems. The concept of entrepreneurial ecosystems has achieved importance especially with regard to policy, regional clusters, innovation systems, context and institutional frameworks that promote and support entrepreneurship," says Babson College's Amanda Elam, Diana International Research Institute Fellow, Center for Women's Entrepreneurial Leadership at Babson College.

"Overall, this report demonstrates the value women entrepreneurs bring to societies worldwide and suggests areas for improvement in ecosystems that better encourage and support women entrepreneurs," said Candida G. Brush, Babson College Vice Provost of Global Entrepreneurial Leadership.

"The findings of this report provide a foundation for guiding future research, policy decision-making, and design of initiatives and programs to enhance growth and development of women's entrepreneurship within context," said Monica Dean, Director, Jill Ker Conway Innovation and Entrepreneurship Center at Smith College.

The report has three main recommendations. We should:

    --  Address stereotypes of who are entrepreneurs and what is
        entrepreneurship.
    --  Change the dialogue about entrepreneurship to match the reality
        reflected in the data.
    --  Learn from each other about the best ways to build successful businesses
        and a vibrant entrepreneurial ecosystem.

Entrepreneurship Activity

Total Entrepreneurial Activity

    --  Total Entrepreneurial Activity (TEA) represents the percentage of the
        adult working-age population (18-64) who are either nascent or new
        entrepreneurs. Globally, the TEA rate for women is 10.2%, approximately
        three-quarters of that seen for men. Low-income countries showed the
        highest rates of women's TEA at 15.1%. Low-income countries report the
        smallest TEA gender gap, where women's TEA is over 80% of that of men.
        Women's TEA rate drops to 8.1% for high-income countries with a
        corresponding TEA gender gap slightly more than two-thirds that of men.
    --  The highest rates of TEA for women are found in sub-Saharan Africa
        (21.8%) and Latin American (17.3%). The lowest rates are found in Europe
        (6%) and MENA regions (9%).[1]
    --  Nine countries where women report entrepreneurial behaviors at levels
        equal to (parity) or greater than those of men are Angola, Ecuador,
        Indonesia, Kazakhstan, Madagascar, Panama, Qatar, Thailand and Vietnam -
        representing all three levels of national income.

Entrepreneurial Intentions

    --  The global average for women's intentions to start a business within the
        next three years is 17.6%, only about four points less than for men. The
        highest rates of women's entrepreneurial intentions are found among
        low-income countries (37.8%), followed by middle-income (21.3%) and
        high-income countries (12.6%).
    --  The gender gap for entrepreneurial intentions is closest to parity in
        low-income countries at 86% women to men ratio, increasingly substantial
        for middle-income and high-income countries with a gap of 26%.

Established Business Ownership

    --  Progress was noted in terms of women's ownership of established
        businesses. GEM defines such businesses as those in operation for more
        than 42 months. Globally, 6.2% of women entrepreneurs own established
        businesses, about two-thirds the rate of men.
    --  The highest rates are seen in sub-Saharan Africa (11.3%) and Asia (9.1%)
        with the lowest rates of established business ownership reported in MENA
        (4.5%), Europe (5.3%), North America (5.7%) and Latin America (6.5%).

Business Discontinuance

    --  The average global rate for business discontinuance is about 10% lower
        for women (2.9%) than for men (3.2%).
    --  The causes of business discontinuance are attributed to a set of reasons
        including lack of profit, lack of finance, other job/business
        opportunity, retirement, sale or acquisition, personal/family reasons,
        government tax/regulations, and so on.
    --  Less than half of women's business closure reasons are directly
        attributed to financial reasons (45.8%), including 29.6% reporting
        closure due to lack of profit and 16.2% citing lack of financing.

Entrepreneur Characteristics

TEA by Age

    --  As in past years, the highest participation rates in entrepreneurship
        among women are in the 25-34 and 35-44 year-old age groups, with gender
        parity among 18-24 year-olds in Asia and greater than parity for women
        aged 25-34 in sub-Saharan Africa.

TEA by Education

    --  Globally, TEA rates increase with level of education for both men and
        women, while the gender gap tends to increase.  Notably, graduate
        education leads to lower TEA rates for women compared to men, except in
        sub-Saharan Africa.

Entrepreneurs' Perceptions

    --  Among women entrepreneurs, 63% perceive opportunities, a figure which is
        near parity (within five points) with that for men in all regions except
        Europe.
    --  Gender gap in perceptions of startup skills is about 6% with 79.5% of
        women perceiving they have skills to start a business compared to 84.2%
        of men. Europe, North America and sub-Saharan Africa show parity.
    --  67.9% of women, versus 72.3% of men, indicate they are undeterred by
        fear of failure. Europe is at parity, but the largest gap is in the
        middle-income countries (9%).

Impact and Performance of Women Entrepreneurs

Solo Entrepreneurship

    --  Among women, 36.4% work as solo entrepreneurs, operating on their own
        without co-founders or employees, compared to 26.9% of men.
    --  A gender gap for these activities exists across all regions. Brazil has
        highest percentage of women solo entrepreneurs - 83%. Colombia reports
        lowest percentage - 2.3%.

Current Employees

    --  2.5% of women entrepreneurs and 5% of men entrepreneurs have more than
        20 employees.

Growth Expectations

    --  Overall, less than 30% of all entrepreneurs expect to add more than six
        employees in the next five years, but there is a substantial gender gap
        in that 18.7% of women entrepreneurs expect high growth compared to 29%
        of men entrepreneurs.

Innovation

    --  Innovation rates tend to increase with economic development for both men
        and women entrepreneurs, from about 20% in low- and lower-middle-income
        countries to 30% in high-income countries.
    --  Men more often reported than women that their businesses are innovative
        by about 30% across countries. Women were more likely than men in 24
        countries to describe businesses as innovative.

Internationalization

    --  The global rate of internationalization is close to parity for women and
        men entrepreneurs, 26.1% compared to 28.2%.
    --  Women in high-income countries were the most likely to report a high
        percentage of international sales (14.3%), while those in middle-income
        (11.8%) and low-income countries (8.2%) were less likely to report a
        high percentage of international sales.

Industry

    --  Globally, 53.4% of women's TEA is in wholesale/retail trade compared to
        43.5% of men's activity. Women entrepreneurs are more likely to be
        present in government/health/education and social services. Largest
        gender gaps are in agriculture, mining and information and
        communications technology (ICT) where men entrepreneurs are more than
        twice as likely as women to operate. 16 countries report no women in
        ICT.
    --  High-income countries have the lowest women's TEA in wholesale/retail
        trade by nearly 20%; and women entrepreneurs operate in financial,
        professional and consumer services at twice the rate of women at other
        national income levels.

Entrepreneurial Ecosystem Influences

Expecting Good Opportunities

    --  Globally, opportunity perceptions by women (42.1%) and men (47.3%)
        represent a 10% gender gap, a 2% improvement from the last report.[2]

Having the Skills to Start a Business

    --  Women report having lower confidence levels in their capabilities to
        start a business than men, and there is no region where women rank
        higher than men. The gender gap has narrowed since the last report by 2%
        with five countries moving to near parity. 43.4% of women and 55.6% of
        men report they believe they have capabilities to start a business.

Undeterred by Fear of Failure

    --  Overall, men were about 10% more likely to be undeterred by fear of
        failure than women; and across all regions, men have a more positive
        response than women.
    --  Women in sub-Saharan Africa were the least deterred by fear of failure
        (66.5%). There were 10 countries where 65% or more reported no fear of
        failure.

Personally Knows an Entrepreneur

    --  Globally, approximately 33% of women report knowing an entrepreneur
        compared to 42.2% of men, representing a global gender gap of about 17%.

Ease of Starting a Business

    --  Globally, women (39.1%) and men (42.5%) are almost equally as likely to
        believe in the ease of starting a business.

Starting a New Business is a Good Career Idea

    --  Women and men are equally positive that entrepreneurship is a good
        career - with rates of about 62%. Gender parity was strikingly
        consistent across regions and income levels.
    --  For women, perceptions of new business as a good career were highest in
        low-income countries (70.6%), and lowest in high-income countries
        (58.8%).

Owning a Business is a High-Status Job

    --  Entrepreneurship is viewed equally by about two-thirds of women and men
        worldwide as a high-status job. Gender parity in this perception was
        found in 15 countries and was consistent across regions and national
        income levels.

Media is Favorable to New Businesses

    --  Women and men were equally likely to view media coverage as favorable
        (approximately 60% globally), and all regions showed gender parity.

Entrepreneurial Investors

Entrepreneurial Investment Rates

    --  Globally, 3.4% of women compared to 5.4% of men provide funding for
        entrepreneurial startups. There is no region where the percentage of
        women investors exceeds that of men. Europe region reflects the overall
        lowest percentage of women investors at 2.6%.

Investor Relation to Entrepreneur

    --  Women (64.2%) are much more likely to invest in a family member than men
        (51.9%), and this holds across all regions. The range of support varies
        from a high of 100% in Madagascar to a low of 25% in France. Women in
        North America are least likely to support family members with investment
        at almost 50%, compared to women in sub-Saharan Africa at 70%.
    --  Women are less likely to support work colleagues with investment
        compared to men. In 14 countries no women invest in work colleagues.
    --  Women are also less likely than men to invest in friends and neighbors
        in all regions except North America where women were 10% more likely to
        invest in friends and neighbors compared to men. There are seven
        countries where women invested in friends and neighbors at a greater
        rate than men, with the highest rates noted in the India, Taiwan and the
        United States at about 40% or more.
    --  Globally, women are less likely to invest in strangers with a good
        business idea than are men (7.5% and 9%, respectively).

IMPLICATIONS

This latest special report on women and entrepreneurship suggests that significant work remains to be done to encourage and support of women entrepreneurs and their ability to build economic security for themselves, their families, their communities, and their countries. Three main recommendations are offered.

    1. Address stereotypes of who are entrepreneurs and what is
       entrepreneurship. From an economic development perspective, expanding
       societal views to a more inclusive vision of entrepreneurship is a
       critical action that can be supported by all ecosystem participants. The
       GEM Global Report for this year focused on the theme of entrepreneurship
       of all kinds which embraces women entrepreneurs. This inclusive approach
       is more beneficial and far-reaching than a continued emphasis on past
       models.
    2. Change the dialogue about entrepreneurship to match the reality reflected
       in the data. It is a long-standing pattern within entrepreneurial
       ecosystems to focus on the access to capital, and this is indeed a
       critical need for business owners. However, capital may also be a symptom
       rather than the root illness. This report shows that when looking at
       global data, only 16.2% of women (15.4% of men) attributed the closure of
       their business to lack of access to capital. Other reasons for
       discontinuance were related to selling the business or retiring. This
       finding suggests a need for more training on how to capture value when
       exiting a business.
    3. Learn from each other about the best ways to build successful businesses
       and a vibrant entrepreneurial ecosystem. The comparisons between women
       and men provided in this study are not meant to provide the "men's
       numbers" as targets, objectives or goals, rather they are simply
       descriptive measures. From an economic development perspective, the
       actual objective is to learn from the data, quantitative and qualitative,
       to guide the development of an ecosystem that works well for all informed
       by social, cultural, political and economic contexts while informing what
       may need to be addressed in those contextual dimensions as well.

Overall, this report demonstrates the value women entrepreneurs bring to societies worldwide and suggests areas for improvement in conditions that encourage and support their aspirations.

About the GEM Women's Report

This Global Entrepreneurship Monitor (GEM) Women's Report offers an in-depth view of women who start and run businesses around the world. Studies on women's participation in entrepreneurial behaviors have long been a part of the GEM project, with special reports developed approximately every two years. Each report considers how regional, economic, and social factors influence similarities and differences among women and men entrepreneurs. The report identifies countries and regions where the gender gap is significant and where it may be changing. The findings from each report provide a broadly global and comprehensively detailed foundation for guiding future research, policy decision-making, and design of initiatives and programs to enhance awareness about women's entrepreneurship.

About Babson College

Babson College is the educator, convener, and thought leader of Entrepreneurship of All Kinds(®). The top-ranked college for entrepreneurship education, Babson is a dynamic living and learning laboratory where students, faculty, and staff work together to address the real-world problems of business and society. We prepare the entrepreneurial leaders our world needs most: those with strong functional knowledge and the skills and vision to navigate change, accommodate ambiguity, surmount complexity, and motivate teams in a common purpose to make a difference in the world, and have an impact on organizations of all sizes and types. As we have for nearly a half-century, Babson continues to advance Entrepreneurial Thought & Action(®) as the most positive force on the planet for generating sustainable economic and social value.

About Smith College

Since its founding in 1871, Smith College has educated women of promise for lives of distinction. One of the largest women's colleges in the United States and the first to offer an accredited engineering program, Smith links the power of the liberal arts to excellence in research and scholarship, developing engaged global citizens and leaders for society's contemporary challenges. Smith educates women to understand the complexity of human history and the variety of the world's cultures through engagement with social, political, aesthetic and scientific issues.

Smith College's Jill Ker Conway Innovation and Entrepreneurship Center is an intellectual hub that challenges students, faculty and staff to develop innovative solutions to pressing problems. As a catalyst for the acceleration of innovation, entrepreneurial activity and financial literacy at Smith, we cultivate change agents prepared to succeed in a complex world. The Center hosts and facilitates a slate of programs and activities focused on creative thinking, problem solving and interdisciplinary teamwork.

With a mission to transform the world by creating a pipeline of exceptionally innovative, entrepreneurial, and financially savvy women, Smith's Conway Center is built on three core pillars: innovation, entrepreneurial spirit and financial literacy. The Center's work is driven by students' demand: Smith students want to be constructive in the world. The Conway Innovation and Entrepreneurship Center gives them the tools and confidence to do so.

About GEM

The Global Entrepreneurship Monitor (GEM) was initiated in 1999 as a joint venture of Babson College and the London Business School. GEM, now a global consortium of over 500 researchers in its 20(th) year of operation, is the largest and most developed research program on entrepreneurship in the world, including data from 100+ economies. GEM is unique because, unlike most entrepreneurship data sets that measure newer and smaller firms, GEM studies the behavior of individuals with respect to starting and managing a business. GEM consortium teams are members of an exclusive research project which provides access to the collective knowledge of some of the world's most renowned researchers and institutions involved in entrepreneurship research. At a time in history when individual entrepreneurial activity may hold the key to transforming the global economy and discouraging ingrained economic disparity in countries with minimal economic opportunity, GEM data has influenced national economic policies and continues to expand its collaborative role.

(1) For the sake of brevity in this report, Asia refers to East and South Asia and Pacific, Europe refers to Europe and Central Asia, Latin America refers to Latin America and the Caribbean, and MENA refers to Middle East and North Africa.
(2) Ecosystem influences were measured for all respondents, both entrepreneurs and non-entrepreneurs.

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