Dual Employment Critical to Creation of Women-Run Entrepreneurial Ventures
I. Elaine Allen, Nan Langowitz, Maria Minniti
The Center for Women's Leadership at Babson College, March 2007
According to The Global Entrepreneurship Monitor (GEM) 2006 Report on Women and Entrepreneurship released by The Center for Women's Leadership at Babson College, dual employment is a critical factor in the creation of women-run entrepreneurial ventures.
Globally, entrepreneurial activity is highest among women who are also employed in a wage job (whether full or part time). This suggests that working provides access to resources, social capital and ideas that may aide in establishing an entrepreneurial venture. Data in the report suggest that social and economic benefits of working are driving women’s entrepreneurship more than increased education or household income.
Notably, globally and at all income levels, women entrepreneurs exhibit less fear of failure than those who shy away from business start-ups. Yet, they express less optimism and self-confidence than men starting businesses, according to the report.
A key finding in 2006 is that more than a third of all people involved in entrepreneurial activity are women. Across the 40 countries in the report, low/middle-income countries showed the highest rates of female early-stage entrepreneurial activity, while high-income countries reported the lowest. Even so, men are more likely to be involved in entrepreneurial activity than women. In high-income countries, men are almost twice as likely to be early-stage or established business owners than women.
Russia is the only country where the rate of female early-stage entrepreneurship is significantly higher than the male rate.
Across all GEM countries, women in low/middle-income countries (such as Russia and Philippines) exhibited the highest women’s early-stage entrepreneurial activity (39.3 percent and 22.5 percent), while high-income countries (such as Belgium and Sweden) reported the lowest (1.0 percent and 2.3 percent). In no countries is the female rate higher than the male rate of established business ownership.
The gender gap between male and female entrepreneurs narrows among low/middle income countries particularly for early-stage entrepreneurship (27 percent), but widens to 45 percent for established business owners. GEM suggests that access to labor markets in middle-income countries actually encourages women to start their own businesses.
In both country groups, the gender gap is greater among established business owners than among early-stage entrepreneurs. Still, the likelihood that early-stage entrepreneurs will become established is greater in high-income countries, and there is no gender difference in the survival rates between male and female businesses.
