• Entrepreneur of the Month

Why Are So Many Women Entrepreneurs Still Playing Small?

OCTOBER 2013: WOMEN AND ENTREPRENEURSHIPEXPLORING THE GENDER INDEX

By Hope Katz Gibbs, Publisher
Be Inkandescent magazine
Illustrations by Michael Gibbs: www.StockIllustration.com

A recent Nielsen study indicates women will hold two-thirds of the consumer wealth in the next decade in the United States. They also spend more than men at retail outlets ($14.31 per trip) and grocery stores ($10.32 per trip).

Despite that, research by Dr. Ruta Aidis shows that women business leaders are consistently devalued in all of the 17 countries studied—including the United States, Australia, Germany, France, Mexico, and the UK (see rankings below).

Further, hypothetical male business executives are judged as being better than hypothetical female business executives.

Called the Gender-Global Entrepreneurship and Development Index (Gender-GEDI for short), the report by Aidis and her colleagues aimed to identify what they consider the “entrepreneurial North Star” — the destination on the economic-growth horizon where high-potential female entrepreneurship is fostered.

Aidis explains: “There is a growing understanding—among policymakers, entrepreneur support organizations, and entrepreneur associations—that laws, policies, support structures, as well as cultural mores and individual motivations, all form an interwoven support structure for enterprise development.”

Aidis points out that there is an increasing realization that there is a gender dimension to these factors that are startling: “Gender-blind business-support measures do not support women’s development to the extent they support men-owned firms,” she shares. And that’s where her report comes into play.

In fact, the Gender-GEDI is the world’s first diagnostic tool that comprehensively identifies and analyzes the conditions that foster high-potential female entrepreneurship development. It is a 17-country pilot study that provides key insights across several regions and levels of national economic development, and includes women-owned businesses ranging from market traders and shopkeepers to biochemical start-ups.

Specifically, the Index focuses on a particular subset of female entrepreneurs, which the researchers refer to as “high potential” — female entrepreneurs who own and operate businesses that are innovative, market-expanding, and export-oriented.

“Through their entrepreneurial activities, high-potential female entrepreneurs not only contribute to improving their own economic welfare but to the economic and social fabric of society through job creation; innovative products, processes, and services; and cross-border trade,” Aidis notes.

“By focusing on the gender-differentiated conditions that often affect ‘high-potential’ female entrepreneurship development, the Gender-GEDI brings a new systematic approach that allows for cross-country comparison and benchmarking.”

The bottom line, she insists, is that globally, women and men are not on a level playing field in terms of access to resources, which continues to impact women’s ability to start and grow businesses. “The Gender-GEDI focuses specifically on identifying and assessing the ‘gendered’ nature of factors that, if addressed, could allow high-potential female entrepreneurs an equal chance to flourish.”

Key Findings

Of the 17 countries studies, the overall Gender-GEDI rankings are as follows (from #1 to #17, with #1 being the top-ranked): USA, Australia, Germany, France, Mexico, UK, South Africa, China, Malaysia, Russia, Turkey, Japan, Morocco, Brazil, Egypt, India, and Uganda.

Reviewing the results of this first pilot Gender-GEDI analysis, including the scores of the countries with respect to the indices and sub-indices, Aidis shares these findings:

  • There is no single determinant or silver bullet for fostering “high-potential” female entrepreneurship;
  • Filling the female start-up education gap is an important area for improvement for many countries;
  • Economic development alone is not enough to foster high-potential female entrepreneurs;
  • Business formalization is important for successful, scalable enterprises—especially with respect to improving access to capital;
  • Business freedom (meaning removing legal and regulatory impediments to growth) is a necessary condition for a vibrant entrepreneurial economy;
  • Social norms are a frequently hidden barrier: lifting the cultural veil that can restrict a woman’s entrepreneurial vision is critical to unleashing female entrepreneurial potential.

So what can companies do?

Allison Dew, Dell’s vice president of Global Brand & End User Computing Integrated Marketing, says Dell is investing in women entrepreneurs’ success by sponsoring the Index.

“At Dell, we have a long-term commitment to finding solutions that will help women fulfill their ambitions and reach their potential,” she says. “The Dell Women’s Entrepreneur Network (DWEN), our Women Powering Business LinkedIn community, our supplier diversity initiatives, and Dell’s internal women’s organization—WISE (Women in Search of Excellence)—have positively impacted more than 10,000 women.

“But, there’s more that we can do,” she insists. “That’s why we’ve invested in understanding and researching the markets in which we operate, particularly women’s entrepreneurship, hoping to identify the areas that need the most support.”

Dell’s goal is simple, Dew explains.

“We want to better understand, quantify, and track this challenge over time. And, as the results show, there is room for improvement for all countries regardless of their level of economic development. “Awareness of the current landscape is the first step toward change, and the Gender-GEDI results will provide a spotlight on the opportunities.”

How long will take before the imbalance in perception is no longer a factor? That’s one of the questions we asked Dr. Aidis for our October 2013 cover story. Click here to read our Q&A.

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