Women entrepreneurs represent about one in three growth-oriented entrepreneurs active in the world today. In its 2020/21 Women’s Entrepreneurship Report: Thriving through Crisis, Global Entrepreneurship Monitor (GEM) found that globally, 30.2 percent of women entrepreneurs surveyed expected to hire six or more employees in the next five years compared to just 18.7 percent in the 2019 report. According to the new report, the percentage of men expecting to hire six or more employees in the next five years is 48 percent.
The established business ownership rate (defined by GEM as owning and managing a running business that has paid salaries, wages or any other payments to the owners for more than 42 months) for women is 5.6 percent, representing one in three established business owners globally.
“There has been a slow shift in the narrative on women’s entrepreneurship from encouraging a high number of startups to more focus on promoting higher growth activities,” said Amanda Elam, a GEM researcher, Research Fellow at Babson College’s Diana International Research Institute and the lead author of the GEM 2020/2021 Women’s Entrepreneurship Report. “Tens of millions of women around the world are making a significant impact. It is now time to work on the key promoting factors, like providing strong champions and role models, inclusion in influential business networks and access to financial capital, that ensure women entrepreneurs and business owners, who are starting and growing high growth companies, can thrive.”
Key findings of the entrepreneurship report
GEM is the only global research source that collects data on entrepreneurship directly from individual entrepreneurs. It has been producing reports on women’s entrepreneurship periodically beginning in 2005. In 2020, the GEM Board made a strategic decision – given the rapidly moving social dynamics around women’s entrepreneurship – to produce the report annually moving forward.
This year’s report showed that women’s entrepreneurship is a fundamental promoting factor of inclusive economic growth in developing economies. In low- and middle-income countries, 17 percent of women are entrepreneurs and 35 percent aspire to become entrepreneurs. Taken together, this implies that over half of women in developing countries see entrepreneurship as a path to a better future. Meanwhile, only 25 percent in high-income countries feel the same way.
“One of the core, transformative promises of the United Nations 2030 Agenda for Sustainable Development and its Sustainable Development Goals SDGs is to ‘leave no one behind,'” said Aileen Ionescu-Somers, GEM Executive Director. “Gender discrimination is one of the significant drivers of people being left behind. Time and time again, GEM research has cast a revealing spotlight on women entrepreneurs, producing data that is testament to the increasing resourcefulness, creativity and capabilities of women when it comes to building companies that grow and prosper.”
The pandemic’s impact on women’s entrepreneurship
The report highlights how women entrepreneurs have been impacted by the pandemic.
However, amongst the surveyed entrepreneurs who reported recently closing a business, women were about 20 percent more likely to report a business closure due to the pandemic than men in the GEM survey. The largest gender gap was reported in North America and Europe. There, women were 50 percent more likely than men to report closing a business due to the pandemic. Interestingly, the trend was reversed in Central and East Asia. There, men were more likely to report business closure due to the pandemic than women (37.7 percent vs 34 percent).
Globally, women and men were more or less at parity in reporting that the pandemic provided new business opportunities (40.6 percent vs 42.2 percent). However, women entrepreneurs were about 10 percent more likely than men entrepreneurs to see government responses as effective in low-income (44.1 percent vs 39.6 percent) and middle-income countries (40.3 percent vs 35.1 percent). These groups trended in the opposite direction in high-income countries (43.9 percent vs 47.9 percent).
“The pandemic has set generations back with the triple threat of small business size, heavy industry sector impacts and the additional burden of family care in addition to work demands,” said Jeff Shay, GEM Board Member and Professor and Executive Director for Academic Operations at the Arthur M. Blank School for Entrepreneurial Leadership at Babson College. “Women entrepreneurs have shown remarkable resilience and ingenuity in adapting to the resulting business disruptions and new market realities. But public policies in many countries have still fallen short with insufficient support for family care, schooling and small business impacts.”
Global trends on women’s entrepreneurship
As the largest ongoing study of entrepreneurial dynamics in the world, GEM research also highlights trends across different regions.
Central and East Asia
Rates of solo entrepreneurship were quite low for women in Central and East Asia. The majority of women entrepreneurs reported 1-5 employees in each country. Women entrepreneurs in India appear to have felt the strongest pandemic impacts of the countries in this region. Two-thirds of women there attributed recent business closures to the pandemic.
Notably, the rate of entrepreneurial activity among European women stands at only 5.7 percent. This is compared to a worldwide average of 11 percent. Women entrepreneurs in Europe had a much more even distribution across industry sectors. Women have some of the highest rates of entrepreneurship in the Internet, Communications and Technology (ICT) sector across all regions. The number is higher than male entrepreneurs in the Netherlands and Switzerland.
Middle East and Africa
The Middle East and Africa region shows some of the highest rates of entrepreneurial intentions for women in the world. Paradoxically, this region also includes one of the highest ratios in the world of female-to-male established business ownership (Angola) and other countries with some of the lowest rates (Morocco, Saudi Arabia, Oman and UAE).
Latin America and the Caribbean
Countries in Latin America and the Caribbean (LAC) region include some of the most vibrant, entrepreneurial economies in the world. For example, women in Colombia were twice as likely as men to report selling an innovative offering (45.5 percent vs 24.1 percent). Women entrepreneurs in LAC also have the highest business closure rates in the world. This rate is 20 percent higher than men entrepreneurs, suggesting a high level of volatility and uncertainty in their markets.
Rates of women’s entrepreneurship activity in North America have historically been strong. Total early-stage Entrepreneurial Activity (TEA) rates for women in 2020 remain strong at 13.6 percent in the U.S. and 13.9 percent in Canada. These numbers are well above women’s average globally (11.0 percent). Yet, a gender gap persists. Women’s TEA activity is at 80 percent of men’s and there is lower representation in high-growth sectors like ICT.
The countries included in the GEM 2020/2021 Women’s Entrepreneurship Report include: Angola, Austria, Brazil, Burkina, Faso, Canada, Chile, Colombia, Croatia, Cyprus, Egypt, Germany, Greece, Guatemala, India, Indonesia, Iran, Israel, Italy, Kazakhstan, Kuwait, Latvia, Luxembourg, Morocco, Netherlands, Norway, Oman, Panama, Poland, Qatar, Russian Federation, Saudi Arabia, Slovak Republic, Slovenia, South Korea, Spain, Sweden, Switzerland, Taiwan, Togo, United Arab Emirates, United Kingdom, United States and Uruguay.
About Global Entrepreneurship Monitor
Global Entrepreneurship Monitor (GEM) is a consortium of national country teams, primarily associated with top academic institutions. These teams carry out survey-based research on entrepreneurship around the world. GEM is the only global research source that collects data on entrepreneurship directly from individual entrepreneurs! GEM’s Adult Population Survey (APS) provides analysis on the characteristics, motivations and ambitions of individuals starting businesses. It also provides analysis of social attitudes towards entrepreneurship. The National Expert Survey (NES) looks at the national context in which individuals start businesses. www.gemconsortium.org
In numbers, GEM is:
– 22 years of data
– 150,000+ interviews a year
– 100+ economies
– 500+ specialists in entrepreneurship research
– 300+ academic and research institutions
– 200+ funding institutions
GEM began in 1999 as a joint project between Babson College (USA) and London Business School (UK). The consortium has become the richest resource of information on entrepreneurship. It has published a range of global, national and ‘special topic’ reports on an annual basis.
Babson College prepares and empowers entrepreneurial leaders who create, grow and steward sustainable economic and social value everywhere. We shape the entrepreneurial leaders our world needs most: those with strong functional knowledge, skills and vision to navigate change, accommodate ambiguity, surmount complexity, and motivate teams in organizations of all types and sizes. A global leader in entrepreneurship education recognized by U.S. News & World Report, our undergraduate, graduate, executive programs and partnership opportunities are tailored to the needs of our world.
GEM Report Sponsors
- Cartier Women’s Initiative
- School of Management Fribourg (HEG-FR)
- Smith College
- Women Entrepreneurs Finance Initiative (We-Fi)
Check out GEM’s report charting the pandemic’s impact on U.S. entrepreneurs.