In 2019, the Boston Consulting Group found that if there were a similar number of women and men entrepreneurs, global GDP would increase from 3% to 6%.
This increase would thereby boost the global economy by $2.5 trillion.
Evidence also shows that despite women-led startups often being highly successful, they are less likely to survive than their male-run counterparts.
What can be done to support female entrepreneurs, so that the world can benefit from their ideas and the trillions of dollars they can inject into the economy?
Well, there are two main ways: Improving the access women have to funding, and the training that can be provided to help women develop new skills that will enable their businesses to thrive.
The entrepreneurial gender gap
The gender gap is not a new concept. The good news, is that some countries have already started narrowing this gap. The Harvard Business Review found that between 2014 and 2016, 50 of the 100 countries in the study were seeing more equal levels of men and women starting businesses. Unfortunately, there were still 40 countries where the gender startup gap was widening.
However, while startup activity for men and women is slowly getting better, the sustainability of businesses still has a long way to go. Across the globe, women-led companies don’t last as long as male-led alternatives. Women-run businesses are only 50% as likely as men-run firms to last more than 3.5 years. Why?
Well, there are significant differences in access to financial support for men and women. Biz2credit.com reports that women are 15-20% less likely to be approved for business loans than men. In 2018, MassChallenge partnered with the BCG to find that an average $935,000 in funding was given to women-led companies, in comparison to the average $2.1million given to male entrepreneurs.
But this isn’t the only reason female-led startups are so hard hit. Building a network for your small business is an integral part of its success, and there just aren’t enough networks for female entrepreneurs. In a tale as old as time, the ‘it’s not what you know, it’s who you know’ has never been truer.
Building better networks for women
Organizations and investors can boost returns, and improve their impact in society by building better networks for women in the business world.
These networks encourage women to aspire to new business heights, embrace innovation and plan for potential growth.
To do this, however, the network must have a clear purpose. Why should women join? What will they gain? A network might offer financial capital, or simply access to the right people with the right skillsets. Next, network creators should be highly dedicated, and welcoming to a wide mix of entrepreneurs from a variety of backgrounds.
Lastly, networks should offer a place to interact with others both in formal and informal settings. While training, presentations and networking all have a part to play in boosting business. The easiest way to build relationships and trust is through informal discussion and collaboration, whether that’s through forums or in-person meet-ups.
Supporting more female entrepreneurs could change the world. By bridging the gender gap in both networking and funding, we could fuel the growth of new ideas and fresh services across the global market. And who wouldn’t want that?
