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Europe needs and wants more entrepreneurs, more innovation, more growth, more digital, more women leaders and founders. Among the various initiatives and projects is the EU project titled “Peer-learning activities in entrepreneurship education and women entrepreneurship” aimed at educating the entrepreneurs of the future. The project will run until June 2021 and will include six peer-learning workshops. The first workshop held in Budapest in Marched tackled questions such as “How to develop entrepreneurship education in Europe? What are the European countries already doing in this area? Do they face the same challenges?”. As I am taking part in the first one focused on women entrepreneurship (14-16 May 2019) in Prague along with, I got pre-workshop materials that contained staggering data about female entrepreneurship in Europe.
In my pursuit of raising awareness and acknowledging the gender disbalance in entrepreneurship, I selected the following eight facts:
1. Europe has the lowest early-stage female involvement in entrepreneurship. Lithuania is the “star”!
According to the 2nd European Start-up Monitor, only 14.8% of start-up founders are female. The Global Entrepreneurship Monitor in 2016 shows that Europe had the lowest female involvement in Early-stage Entrepreneurial Activity of every analyzed region (6%) and the lowest gender parity. Malta has the lowest and Lithuania has the highest rate of female entrepreneurs of all EU member states. The percentage of female entrepreneurs within EU member states for all economic activities shows large disparities with percentages ranging from 19.4% in Malta to 39.5% in Lithuania, the member state with the highest rate of female entrepreneurs (Women in the Digital Age, European Commission, 2018).
Despite the scarce percentage of women in entrepreneurship, research shows that female-owned digital startups are more likely to be successful than those of their male counterparts and that investment in female-founded startups performs 63% better than exclusively male-founded startups (Women in the Digital Age, European Commission, 2018).
Start-ups with 100% female founders obtained 4.9% of all global venture capital deals in 2016, the highest percentage of deals in the past decade. However, average investments in female entrepreneurs have fallen 0.7 pp. since 2014. The percentage of companies with at least one female founder that have reached venture capital (VC) deals in 2016 in Europe was 16.1%. In the U.K., for example, male entrepreneurs are 86% more likely to obtain VC funds than women. Existing research shows evidence of the existence of stereotypes affecting investors, regardless of gender. During an experiment in which two entrepreneurial pitch videos with randomly assigned voices were watched, 68.3% of participants preferred to invest in ventures pitched by a male voice even though these voices presented identical pitches (Women in the Digital Age, European Commission, 2018).
Despite a higher representation of female angels and investors doesn’t mean higher investments in female-founded companies it is worth to mention that although the number of business angels is increasing worldwide, the representation of women is still scarce. Only 7.4% of investors who have invested in one or more startups are women. When it concerns women angels, this percentage stand at 7.2%.(Women in the Digital Age, European Commission, 2018).
4. Same formal education level and yet different level of confidence between men and women!
Women’s formal education levels, on average, increasingly resemble or exceed those of men. However, women are less likely than men to feel that they have the skills, knowledge and experience to start a business. At the European Union-level, only one-third of women indicated that they had sufficient skills, knowledge and experience to start a business over the 2010-14 period. However, half of men responded positively. This gender gap holds across all EU Member States and the gap was greatest in Poland (21%), the Slovak Republic (21%) and Hungary (20%). (Policy Brief on Women’s Entrepreneurship, European Commission & OECD, 2016)
5. Overall women don’t think they have access to entrepreneurship training. Hungary, Latvia, Estonia and Sweden are the bright exceptions!
Women are less likely than men in nearly all EU Member States to report that they have access to training on starting and growing a business. The exceptions were Hungary, Latvia and Estonia, where women are as likely as men to feel that they can access training, and Sweden, where women are slightly more likely to feel that they can access training. (Policy Brief on Women’s Entrepreneurship, European Commission & OECD, 2016)
6. Fear of failure prevents more women than men to start a business, especially in Greece in Poland.
At the EU level, 52% of women indicated that a fear of failure would prevent them from starting a business relative to 42% of men. Women were more likely than men to report this barrier in all countries and were the most likely in Greece (71%) and Poland (65%) (Policy Brief on Women’s Entrepreneurship, European Commission & OECD, 2016).
7. Women entrepreneurs are less likely to rely on banks for financial support.
Studies carried out in France found that 10% of women entrepreneurs wish to receive support from banks, which is a third lower than their male counterparts. Similarly, a UK study found that women entrepreneurs are less amenable to institutional finance, such as overdrafts, bank loans and supplier credit. Even if they can gain access to a loan, women often lack access to other financial services such as savings, digital payment methods and insurance (Gender in entrepreneurship, European Institute for Gender Equality, 2016).
8. Men are two times more likely to get self-employed than women in the EU.
In 2015, women were self-employed half as likely as men in the European Union (9.9% vs. 17.8%). This ratio holds in most EU Member States. The gender gap in the proportion of men and women who were self-employed was the smallest in Luxembourg, the Netherlands, Lithuania, Austria, Cyprus and Greece. The gap was the greatest in Ireland and Malta, where men were approximately three times more likely than women to be self-employed. And why is that so?–One explanation for the gap in self-employment rates between men and women, as well as differences in business characteristics and performance, has been that women have different motivations for going into self-employment. Many studies suggest that work-life balance and family care responsibilities have a greater influence on entrepreneurship activities by women, particularly if they have dependent children (EIGE, 2015). Other studies also find that many female employees move into self-employment as a way to overcome the “glass ceiling” in the workplace , which limits the career potential for many women.
May 12, 2019 at 10:11AM
Forbes – Entrepreneurs