The state of women entrepreneurship
While gender equality is not (yet) a reality today, women are on the rise in the world of entrepreneurship. According to the Global Entrepreneurship Monitor (GEM) 2021/22 Women’s Entrepreneurship Report, women represent one in three high-growth entrepreneurs. Surprisingly, Kazakhstan – and Central and East Asia more broadly – has the highest rates of entrepreneurial intention and startup activity by women, whereas Europe has the lowest rates.
Despite the upward trend of women entrepreneurs around the globe, they still face more challenges than male entrepreneurs. Those challenges include limited access to financial resources, markets, and support services. Compounding the issue are negative gender stereotypes that undermine women’s credibility as entrepreneurs. As a result, women may struggle to secure funding, customers, and partnerships which can limit their growth and profitability.
The global coronavirus pandemic only exacerbated these challenges. In many countries, women entrepreneurs experience significant setbacks due to limited resources and family obligations. Let’s explore a few of these challenges and how business schools can do their part in empowering women entrepreneurs.
1. Gaining access to financial & social capital
Women entrepreneurs’ biggest challenge is the need for more access to capital. In an analysis of businesses registered in California and Massachusetts, researchers found that women were 63% less likely than men to secure external funding. One reason for this could be that women are more inclined to launch social ventures which investors are less likely to back. Another reason is that entrepreneurs tend to rely on more informal networks that men typically dominate.
The challenge is really that women entrepreneurs need more access to financial and social capital. One of the most significant success factors for entrepreneurship, social capital involves building connections within personal and professional networks. It can include government agencies or officials, investors, and even friends and family. Unfortunately, it is more difficult for women to enter established networks due to the gendered nature of social networks.
Sadly, the lack of access to vital economic and social resources significantly negatively impacts entrepreneurial intentions. The lack of support diminishes the spirits of aspiring and current entrepreneurs alike.
2. Finding work-life balance & challenging traditional gender norms
Achieving and maintaining a work-life balance is difficult for anyone. So, you can imagine how challenging it must be for women entrepreneurs responsible for running their businesses and caring for their families. Research has found that women are twice as likely to cite family responsibilities as a barrier to starting a business. For women entrepreneurs with children, parental responsibilities are the main obstacle to further business success.
The role of culture and gender roles cannot be ignored here, as larger societal norms and expectations can impact our attitudes toward entrepreneurship. It can be more difficult for women entrepreneurs to survive and thrive in more traditional cultures, where women typically assume family and household responsibilities while men provide for the family. In these types of cultures, stereotyped perceptions of gender can contribute to a more male-centered view of entrepreneurship.
3. Building self-confidence
Women often do not consider an entrepreneurial career because they underestimate their ability to run a company. Needless to say, women are just as capable as men of leading successful businesses. However, some of these limiting beliefs become so ingrained – into the women themselves and their environments – that they become reality.
Therefore, women must invest in themselves to increase their self-confidence. Victoria Petrova, INSEAD MBA graduate and Co-founder of e-learning company Corpedios, adds, “As an entrepreneur, you need more confidence in what you’re doing. … Sometimes it’s really hard because you’re getting pushback from your clients, from your partners, from people who have just given you feedback. You just need to believe in what you’re doing and in yourself and your team.” (09:54)
The case for an MBA for (women) entrepreneurs
While an MBA isn’t a requirement for aspiring entrepreneurs, it can certainly open doors. Victoria, for instance, met her co-founder during the INSEAD MBA.
At MBAGRADSCHOOLS, we are big believers in the power of education for transformative, long-term growth. After all, choosing an MBA program is one of the biggest decisions you will ever make. MBA programs can play a meaningful role in bridging the entrepreneurship gap between men and women. Many integrate entrepreneurial modules into the program, thereby increasing entrepreneurial intention among students.
One of the most effective practices universities can exercise is hiring leaders and lecturers who share entrepreneurial values and promote entrepreneurship. Additionally, the leaders of higher education institutions can inspire and instill entrepreneurial intentions and behaviors among faculty and staff, which trickles down to the students.
Successful women entrepreneurs on choosing an MBA & shooting for the stars
Between pursuing an MBA or jumping straight into being your own boss, there are benefits to taking the longer path. Victoria says, “You can just start your business and you can waste money on your first business then on the second one. … But there is another path that you can take, which is to do an MBA where you can meet people who can be your support network.” (14:36)
When it comes to finding an MBA program for entrepreneurs, fellow INSEAD MBA graduate and Founder of ART X Lagos in Nigeria Tokini Peterside, advises, “For starters, do a lot of research not just into the core courses or the elective courses…but think very much about whether that school offers additional resources that are supportive to the entrepreneurial ecosystem.” (15:44)
Virginia Brumby Ferreira tells aspiring women entrepreneurs to “go for it”. She is also an INSEAD MBA graduate and the founder of the lifestyle platform Survival Chic in Singapore. Virginia adds, “You will be shocked at the amount of support you will receive…As a woman, we need more female leadership. We need more female entrepreneurs.” (13:29)
If you’re an aspiring (woman) entrepreneur, why don’t you reach out to current or past MBA students to hear more about their experiences with entrepreneurship?