Measuring women entrepreneurship is key to understanding its impact on economic growth and come up with effective policies to further support female entrepreneurs around the world. But not many countries consistently collect sex-disaggregated data, and few data sets gather comparable cross-country data on this crucial matter. Last year, only 30 percent (44 out of 143) of economies who participated in the World Bank’s Entrepreneurship Database -one of the most extensive data sets on entrepreneurship- provided sex-related data for 2017.
What is missing? From the Global Entrepreneurship Monitor (GEM), the oldest and largest data set on entrepreneurship that tracks new businesses in 83 economies, to the latest Female Entrepreneurship Index (FEI) that uses 23 gender-specific indicators to monitor the development of female entrepreneurs globally, the issues are similar. According to a report by the World Bank’s Global Indicators Group, all existent datasets lack administrative data and overuse self-reporting, which inflates perceptions over official records. Additionally, there is a problem with what are we talking about when referring to women entrepreneurs. There is a wide range of definitions and a lack of legal distinctions between the different types of businesses created (sole proprietorships, LLCs or corporate organizations). All these limitations prevent comparability and limit the extent to which policymakers can come up with tailored solutions to gender-specific problems.
Why sex-disaggregated data? Information on the number of new female entrepreneurs, the type of businesses they are founding and the particular challenges and risks they face in forming different business entities is key to crafting evidence-based recommendations and tailored policies to foster women’s economic empowerment. Insufficient standardized and country-comparable data on female entrepreneurship difficulties in-depth understanding and analysis of the different dimensions and factors determining gender gaps. For example, the Female Entrepreneur Index (calculated for 77 economies) showed that more sophisticated ventures, such are corporations, require additional resources, skills, and aspirations. Shining a light on these particular challenges is only possible when collecting gender-specific data that distinguishes between different legal entities.
A step forward: In an effort to address this problem, the World Bank Group’s Entrepreneurship Database collects data from 143 economies based on official statistics from business registries and national statistical agencies. In 2017, it expanded its scope to collect comparable cross-country data on the number of new female and male entrepreneurs, distinguishing between limited liability companies and and sole proprietors. From the 44 countries that provided sex-disaggregated data, these are the main takeaways:
- Less than one-third of new limited liability company (LLC) owners are women
- Only three economies (Austria, the Philippines, and Estonia) have similar or equal number of women business owners relative to men.
- Women in low-income economies are less likely to start businesses
- The Middle East and North Africa region has the largest gap between male and female business creation.
- The largest increases in female ownership are reported in Nepal (LLC) and Kosovo (sole proprietors)
- Afghanistan, Saudi Arabia and Turkey reported a decreasing number of new female entrepreneurs.
- The analysis on the main factors affecting the magnitude of gender gaps suggests that national economies should prioritize the expansion of financial inclusion, equal legal rights and access to education for women.
You can find the original study here.
Contributed by Stefanía Doebbel.