Women now lead one in three high-growth businesses, despite a global lack of access to capital

A third of high-growth companies worldwide are now led by women, according to the Global Entrepreneurship Monitor (GEM) 2021/2022 report on female entrepreneurship.

"That's an important statistic," says Aileen Ionescu-Somers, executive director of GEM. "To me, this indicates that women can certainly succeed on the more demanding side of entrepreneurship."

The report defines high-growth companies as job creators with more than 20 employees and expecting more than 20 hires over the next five years.

The GEM Reports, produced by a consortium of universities, is one of the most comprehensive current datasets on entrepreneurship in the world. The Women Entrepreneurs Report examines data from 47 countries. It includes high-income countries (such as Canada, Chile, Japan, Saudi Arabia, South Korea, Uruguay, and the United States), upper-middle-income countries (including Belarus, Brazil, Colombia, Jamaica, Romania, Russian Federation, South Africa and Turkey); lower-middle-income countries (such as Egypt, India, Iran, and Morocco) and one low-income country, Sudan.

The Women's Entrepreneurship Report also revealed that one in three innovation-driven entrepreneurs are women. According to the authors of the report, women entrepreneurs from upper-middle-income countries are currently the most prevalent among the most innovative and high-growth entrepreneurs globally and have reached parity with men in terms of employment. orientation towards the international market.

At the same time, women are more likely than men to start businesses without employees, according to the report. It is the largest group of companies and often a springboard for future job creators.

Women succeed in these areas with little or no “enabling” environment, i.e. policies supporting childcare and other services that help female entrepreneurs. The "enabling environment" for women entrepreneurs in most countries is "very weak", according to national experts who collaborated with the researchers. Beyond that, in most countries around the world, women tend to be less wealthy than men, with less money to exploit, according to the report.

Although fewer women around the world said they wanted to start a business or acted on these intentions in recent years, the situation was different in upper-middle-income countries. There, start rates skyrocketed 11% from 2019 to 2021, and there was no dip in 2020.

The presence of women at the helm of so many high-growth businesses is particularly remarkable given the added demands many women have faced during the pandemic, with schools shifting to online learning and daycares being rare or non-existent.

“Yes, of course they were affected, especially start-up entrepreneurs. There were a lot of business failures,” says Ionescu-Somers. “Women who were already more established entrepreneurs were able to juggle with this challenge of suddenly no longer having childcare."

A huge challenge for women entrepreneurs exists around the world, the report notes: lack of finance. "Essentially, the conclusion is that diversification of access to capital is sorely lacking," says Ionescu-Somers.

One reason for limited access to funding is that many women are turning to areas that investors are less likely to support, according to Ionescu-Somers. “Obviously we have women in high-growth sectors, but women tend to choose different types of entrepreneurship than men,” she says. "They tend to go into retail, hospitality and other areas."

Report calls for mobilization of financial support for women entrepreneurs; support for high-potential women entrepreneurs in all sectors and all countries; celebrating women entrepreneurs as role models and demystifying gender stereotypes related to entrepreneurship.

"We've been saying for years that there are cultural and social biases against women," says Ionescu-Somers. "Obviously there are role models. But somehow we do a poor job of showcasing those role models and breaking down perceptions that women won't be as engaged or successful. not. Perception is reality."

It is possible that as more and more women make successful exits, they will also invest in other women-owned businesses. The report found that women's business exit rates rose from 2.9% to 3.6% during the pandemic, while the increase in men...