A woman entrepreneur? Then you’re 3X more likely to be from Asia
The low numbers of female entrepreneurs are well documented- slightly over fifteen percent of newly founded startups between 2009 and 2014 were led by at least one women founder, and just ten percent of venture dollars between 2010 and 2015 went to startups with female founders. The reasoning behind the absence of women in the halls of entrepreneurship vary, from “men are more likely to take risk than women” to the enshrined perception of entrepreneurship as a male trait. In new business ventures across Silicon Valley, Tel Aviv and London, women are still grossly underrepresented, but does this reflect reality?
A common belief is that women in developed countries have a higher percentage in new ventures than in the developing world, since they are granted better access to resources, favorable legislation, and higher perceptions of skill, all of which are imperative to advance in society. The 2015 FEMI (Female Entrepreneurship Index), which ranks seventy seven countries according to how favorable their economies are towards female entrepreneurship, shows that GDP ranking explains sixty one percent of a country’s score. The higher the GDP, the more likely a country is to encourage female entrepreneurship, and hence the top ten scoring countries on the FEMI score are OECD countries. This data coincides with the 2017 Global Entrepreneurship Index, measuring general entrepreneurial activity, with seven out of the top ten FEMI countries making to the top of the list. Developed, entrepreneurial countries are expected to see a higher female entrepreneurship rates.
The data reveals a different reality, with a significantly higher number of female entrepreneurs being located in developing countries. Examples such as Vietnam, the Philippines and Peru show that women are engaging at three times the rate of their Western counterparts in Sweden, Australia and the United States in entrepreneurial activity.
The data of the 2016 GEM (Global Entrepreneurship Monitor), a survey which measures entrepreneurial activity in sixty countries across the globe, reveals that in ‘factor’-driven economies, which are heavily reliant on unskilled labor and natural resources, women show a significantly higher rate of entrepreneurship compared to their counterparts in developed economies. On average, twenty percent of women in developing countries will conduct entrepreneurial activity, while in developed countries, this percentage stand at only six percent. In fact, the six countries with the highest level of female entrepreneurship rates, with fifty percent of higher, are the developing countries Vietnam, Philippines, Thailand, Malaysia, Indonesia, and Peru.
How is it possible that there are more female entrepreneurs in countries with less access to resources, lower rates of female education and more restrictions on women?
The answer is this: In the worst economic conditions, women are emerging as an innovative source of business activity. The GEM survey shows that in developing countries, women are more than one-third more likely to start businesses out of necessity than men. They simply have no other choice than to find innovative ways to bring food to the table. With the need to support themselves and their families, women are frequently more than willing to face risks head-on and delve into the world of entrepreneurship in order to survive.
It is important to note that the vast majority of entrepreneurial activities in developing countries is focused in traditional industries and low-tech markets, and in these societies hi-tech startups are dominated, as in developed countries, by male entrepreneurs. Nevertheless, the high percentage of female entrepreneurship in low income societies, should teach us that perceptions on women not willing to take risks and engage in entrepreneurial endeavors are not anchored in reality. Under economic and societal stress, women in Asia, Africa and the Middle East are taking matters into their own hands.
There is a long way to go before we see the numbers of female entrepreneurs grow significantly in the developed world, but until then- let’s take a moment to appreciate the fierceness and innovative spirits of women across the globe.