There has been a lot talk in the past year about job creation, entrepreneurship and economic recovery. Under the economic pressures, it became more important to than ever to examine closely how to unleash the entrepreneurial potential of various groups in society. We know for example that women are under-represented among business founders in high-tech and other high-growth fields despite their increasing participation in science and engineering. Fortunately, we are better prepared every day to inform policy. Today, I examine some of the most recent findings on the factors that affect the survival and growth of startups founded by women.
With women representing over half of the population in the U.S. and the majority at U.S. colleges and universities, it is important to explore whether successful, high-growth women entrepreneurs differ from successful men entrepreneurs. The Kauffman Foundation has recently released a new study, “Are Women Entrepreneurs Different from Men?” which suggests the answer is both yes and no.
In terms of similarities, we now know, for example, that entrepreneurs of both genders tend to start their companies, on average, in their early 40s and that they share similar motivations and educational levels. Both also see prior industry and work experience as a “very important” factor in determining their startups’ success. The differences are more subtle. The women surveyed considered past experience even more important to their success than did men. The authors suggest that this is perhaps because past experience demonstrates their competence in traditionally male-dominated technical fields.
The success factors are largely the same for both women and men, but again some factors can influence women to follow and succeed in the entrepreneurial path more than men. For example, when it comes to financing, women seem to rely more on business partners and less on external financing. Among the women entrepreneurs surveyed for the study, 29 percent obtained their main startup funding from a business partner, compared with 16 percent of men.
Another difference is that professional and personal networks and support are valued more highly by women. This highlights the importance of efforts to provide women mentoring and support networks, such as the TechWomen program announced at the Presidential Summit on Entrepreneurship last month. TechWomen is an international professional mentorship program which will connect American women working in technology with their counterparts from Muslim-majority countries. Other organizations creating this resource for women in the U.S. include the Association of Women’s Business Centers (AWBC), theNational Association of Women Business Owners (NAWBO) and the American Business Women’s Association (ABWA).
We are likely to discover more about women’s entrepreneurship. The Kauffman Foundation is sponsoring a global conference that will focus on creating a roadmap for increasing women’s participation in high-growth entrepreneurship. The “We Own It Summit” will be held on June 8, 2010 in New York.
Many policymakers have pledged their support to entrepreneurs, putting them at the forefront of economic recovery efforts. Understanding subtle gender similarities and differences among successful entrepreneurs in terms of background, education, motivations and entrepreneurs’ beliefs about key success factors offers important lessons on how to prioritize and design programs that encourage more high-growth businesses, and thereby boost job creation, innovation and economic growth.