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.”