Women entrepreneurs are economic drivers, a report argues

A new paper, published by the Ewing Marion Kauffman Foundation – the world’s largest foundation devoted to entrepreneurship – argues that women should be actively encouraged to start companies in greater numbers.

Lesa Mitchell, Kauffman’s vice-president, says:

“If we are looking for an answer to jobs, it’s right in front of our face.”

The study acknowledges the fact that women start high-growth companies at lower rates than men, but says the underlying causes for this are systemic rather than due to a gender-based difference in entrepreneurial ability. It found that 29 per cent of privately held firms in the US are women-owned and 12 per cent of firms are owned equally by men and women.

When examining larger companies, the gender gap is even wider. Just 1.8 per cent of women-owned firms had revenues above $1m compared with 6.3 per cent of men-owned firms, the study found.

The study goes on to argue that the skills it takes to build a large enterprise from scratch are different from those it takes to head up an established technology company. The vital importance of access to the networks of venture funds, academic hotspots and other entrepreneurs or mentors is critical to the entrepreneur’s success.

The study also points out that female role models are scarce. Looking at innovators in disruptive technologies that have changed the world in some way, it is hard to find many female household names.

There are other discrepancies that the study suggests contribute to the low-show of women in this space. The percentage of women who sit on Science Advisory Boards of high-tech firms is just 6.5 per cent. Women lodge less than half the number of patents of men and attract less than 5 per cent of venture funds.

The study campaigns for more private enterprises to involve women on their advisory boards, for female entrepreneurs to raise their heads above the parapet, and for there to be positive action to getting women to participate fully in the high-growth start-up space.

“Women capable of starting growth companies may well be our greatest under-utilized resource.”

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About our bloggers

Liz Bolshaw

Liz Bolshaw is a business journalist and editor. She has been a successful book publisher, online editor, magazine editor and publisher.

She was launch editor of the Europe-wide online community Entrepreneur Country, has published magazines for PwC, 3i, dunhill and Bafta, and launched The Sharp Edge, a magazine for and about entrepreneurs, with Duncan Bannatyne. She is a regular contributor to Thomson Reuters’ Venture Capital Journal.

Her last project for the Financial Times was as editor of the paper’s Business Education magazine.

Rebecca Knight

Rebecca Knight is a freelance journalist based in Boston. She writes regularly for the FT on business education, entrepreneurship, and management.

Andrew Hill

Andrew Hill is an associate editor and the management editor of the FT. He was City editor of the FT and editor of the daily Lombard column on British business and finance from September 2006 to December 2010.

He was the FT’s financial editor from June 2005 to September 2006, with overall responsibility for coverage of companies and markets. Before becoming financial editor, he was the FT’s comment & analysis editor, in charge of the paper’s opinion and features pages.

From 1999 to 2003, he was the FT’s New York bureau chief. He joined the FT in 1988 and has also worked as foreign news editor, UK companies reporter and correspondent in Brussels and Milan.

Pino Bethencourt

Pino Bethencourt is a professor and leadership expert at IE Business School in Madrid. She is also an author and executive coach.

Lynda Gratton

Lynda Gratton is professor of management practice at London Business School.

Linda Tarr-Whelan

Linda Tarr-Whelan, former ambassador to the UN commission on the status of women, is a Demos distinguished senior fellow.