Population-Level Evidence of the Gender Gap in Technology Entrepreneurship

Abstract

This study investigates the gender gap in entrepreneurship in the technology industry. Digitization has created vast economic opportunities in the technology sector and has lowered many barriers to entry, thus reducing traditional frictions regarding entrepreneurship and potentially increasing opportunities for female founders. However, anecdotal evidence has suggested that female technology founders are rare and that women are underrepresented in science, technology, engineering, and mathematics roles. Based on individual career histories collected from more than 42 million U.S.-based LinkedIn profiles, including more than 1.3 million founders, we explore whether there are higher rates of female founders in technology companies relative to other industries. Our analysis revealed the following: (1) Females were only half as likely as males to found businesses in the technology industry. (2) Females were less likely to found successive businesses (i.e., serial founders), which was even more pronounced in the technology industry. (3) When we used the gender gap in labor force participation as a baseline, the gender gap in technology entrepreneurship was particularly large, even compared with other male-dominated industries (e.g., construction). (4) The gender gap in technology entrepreneurship was driven by lower rates of entrepreneurship by females in lower positions in the organizational hierarchy. In contrast, females who reached the C-suite in technology sectors were 16% more likely to found firms compared with their female C-suite counterparts in nontechnology industries. Combined, the results provide a nuanced view of the gender gap in entrepreneurship.