Overcoming the Gender Gap: Women Entrepreneurs as Economic Drivers

This paper explores the intersection of two issues that often are thought of separately: the need for sustained economic recovery in the United States, and the status of women’s entrepreneurship. Despite recent gains, women still lag behind men on key measures of startup activity, and their firms tend not to grow or prosper nearly as much. Typically, this is seen as a - women’s issue. It is framed as a problem to be dealt with for the benefit of women, in the interest of gender equality. In fact, it is an economic issue that affects everyone. Research has shown that startups, especially high-growth startups, are the keys to job creation and leadership in new industries. With nearly half of the workforce and more than half of our college students now being women, their lag in building high-growth firms has become a major economic deficit. The nation has fewer jobs - and less strength in emerging industries - than it could if women’s entrepreneurship were on par with men’s. Women capable of starting growth companies may well be our greatest under-utilized economic resource. And what would it take to develop the resource more fully? We at the Kauffman Foundation hope this paper will help to stimulate new thinking on the subject. The following themes run throughout: While every entrepreneur, big or small, helps the economy, the emphasis here is on those who start high-growth companies, which help the most. More women’s startups need to be aimed at growth targets far above the oft-cited benchmark of $1 million in revenues. There is a particular need for innovative, transformative new firms that can grow to serve global markets. Many (though not all) high-growth firms are built around new science and technology. With more women than ever entering these fields, the upside potential for women’s tech startups is huge. What it takes to succeed in business is not necessarily the same as what it takes to succeed in starting a business. While women have made great strides in breaking through the proverbial - glass ceiling - to advance to high rank within corporations, few have made similar strides in breaking out laterally - through what might be called the - glass walls - to start their own high-growth firms. What it will take‖ to have more high-impact women entrepreneurs includes all of the following: what women themselves might need to do, what men might do, and what might be done collectively in the way of public policies or private initiatives. Finally, to reiterate the main point: It is essential to see women’s entrepreneurship as an economic issue, not a gender-equity issue. When new companies and industries flourish, everyone benefits. And the returns will increase when more women contribute to the process by bringing their ideas to market and building high-growth firms around them.