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There is no doubt that women are incredibly important in business. My mother was and still is exceptionally entrepreneurial and she was largely my inspiration to start my first business as a teenager. However all the stats show that there are significantly fewer female entrepreneurs than male entrepreneurs, with global studies affirming that in some countries the ratio is as unbalanced as 5:1. The question is why? I spent several weeks trying to discover exactly why this is the case, talking to female entrepreneurs, male entrepreneurs and psychologists. Unemployment has reached unprecedented levels; as entrepreneurs are important sources of job creation, we should be concerned for economic reasons, when any group of society is seemingly excluded, even in part, from taking part in such an economically valuable pursuit.
I asked a diverse group of people for their opinion on this issue and I analysed several recent studies; below are some of the possible factors I found to be important:
We live in a patriarchal society, even though things are improving, women are still socialised to be less risk taking. Additionally, women tend to be the primary care givers and are not in the easiest position to take risks if they have children. Consequently, it is not only more difficult for women to practically take the steps needed, but there are also fewer female role models in powerful economic positions for women to aspire to.
One thing that is critical is women's belief in their own capabilities. A 2009 study showed that less than half (47.7%) of women believe they are capable of starting a business, while well over half, (62.1%) of men believe they are capable. That lack of confidence persists through all economies and cultures studied - (Global Entrepreneurship Monitor Report 2009). However, it's hard to determine causality here and this lack of confidence may be the result of societal influences or other factors.
Fear of failure & risk aversion
Results from a three-year study carried out by psychological consultancy limited (viewable on the British Psychological Societies website) on over 20 occupational sectors across four continents, involving almost 2000 individual assessments with people from a wide range of professions concluded that women are less likely to take risks. The magnitude of the difference in risk taking between men and women was unexpected. Females were more than twice as likely to be wary and almost twice as likely to be prudent whilst males were more than twice as likely to be adventurous and almost twice as likely to be carefree. From the scale of these findings the researchers conclude that risk taking is linked to gender. Again, cause and effect is hard to determine here and this is most likely a result of a social construct.
The fact remains that there are far less female entrepreneurs than male. I believe the reasons for this are largely socially constructed; women's lack of confidence in their abilities, their fear of failure, and their cautiousness are all relics of many hundreds of years of patriarchy. This has made it more difficult for women to reach their full capabilities in the business world, and not necessarily because they lack the skills needed. I believe that there is a need for this gender imbalance within business to be addressed. I believe that by integrating a more diverse perspective into the boardroom; by including both genders equally, an organisation will become more innovative, and it's often a slight margin of innovation that separates the winners from the losers in business.
I believe our economy would benefit if we did more to celebrate the vast amount of successful women entrepreneurs out there. If I asked a person at random to draw a picture of what they believed an entrepreneur looked like, I think it's fair to say the majority would draw a picture of a man in a suit holding a briefcase. If I asked a person at random to name a successful entrepreneur I think it's fair to say the great majority might name a male entrepreneur; Richard Branson, Steve Jobs, Bill Gates or Alan Sugar. This is what I think ultimately needs to change and we can start to do this by putting successful female entrepreneurs into the spotlight more. It was very encouraging to see that the BBC introduced another female dragon; Hilary Devey, into the UK dragons den TV series last season, but unfortunately social constructs don't change overnight and there is still much more to be done.