What actions can decision makers take to promote rapid growth among women-owned businesses? A new publication titled High-Growth Women’s Entrepreneurship suggests that a collaborative approach involving the government, nonprofit, and private sectors is key to addressing the systemic challenges that impact women entrepreneurs globally. This framework helps to ensure that women have equal opportunities for success in entrepreneurship at a time when they are starting more businesses than ever before.
Authors Amanda Bullough, Diana Hechevarria, Candida Brush, and Linda Edelman, state that “programs, policy and practices that support women’s growth-oriented entrepreneurship involve interconnected and mutually reinforcing features of a fruitful entrepreneurial culture, including financial and human capital advancement and readiness, new opportunities for expansion, and an assortment of institutional and infrastructural provisions for innovation and business growth.” The chapter identifies three focus areas for decision makers that aim to foster productive entrepreneurship ecosystems for female entrepreneurs. These findings provide potential responses to some of the gender-specific challenges that women founders face in entrepreneurial ecosystems.
- Network-Building Practices: Formal and informal networks are extremely important to entrepreneurial success. The authors note that for entrepreneurs, “breadth and heterogeneity of networks are critical for new ideas, resources and growth.” However, women founders have been shown to have smaller, less diverse networks than their male counterparts, and are less likely to have contact with other entrepreneurs. For this reason, women founders benefit from the creation of diverse, formal networks that include male and female entrepreneurs, investors, and funders. The authors highlight programs such as the Ernst & Young Entrepreneurial Winning Women (EWW) as an example of beneficial network-building practices.
- Programs and the Support Environment: In order to create productive entrepreneurship ecosystems, decision makers should aim to build a supportive entrepreneurial culture. Encouraging high-growth women entrepreneurship in these ecosystems requires ensuring access to educational resources and aligning normative expectations with the needs of female entrepreneurs. Decision makers can accomplish this through thoughtful diversity initiatives, women-only educational programs, and institutional policies that promote the equal division of household and family responsibilities between men and women. Australia’s Science in Australia Gender Equity (SAGE), for instance, made progress towards closing the gender gap in tech by taking measures to create a gender-inclusive environment in STEM classes and tech workplaces.
- Financial Policies and Regulation: Due to the significant challenges that women face when securing capital and bank loans, Bullough et al. find that “marketing existing financial products directly to women, as well as setting aside specific funds and designing financial products explicitly for women, can have a meaningful impact on women’s abilities to successfully grow their business.” In China, for example, researchers found that women entrepreneurs who were made aware of new financial policies for SMEs were more likely to pursue debt financing and to secure higher levels of debt capital than those who were not informed.
The authors’ findings suggest that even in the short term, a commitment to realizing the potential of female entrepreneurs requires committing to intentional, collaborative actions that address the structural challenges facing women entrepreneurs. Furthermore, actions focused on making the cultural changes necessary for female entrepreneurs to thrive are just as urgent as those focused on building formal mechanisms that facilitate access to resources. This emphasis underlines the importance of taking cultural context into account when developing entrepreneurship policies, as described in this previous Endeavor Insight post.
These actions should be a starting point for decision makers in government, nonprofits, and business that aim to increase rates of high-growth female entrepreneurship. However, eliminating persistent inequalities in access to finance, start-up opportunities and business growth will require a sustained and coordinated effort across sectors. This will require not only expanding successful existing programs, but also working collaboratively to establish programs, policies and practices that evolve with the changing needs of high-potential women founders.
More information about this publication can be found here.
Contributed by Lily Harrington.