2011's Welcome Spotlight on High-growth Women's Entrepreneurship
As we close out 2011, I did not want to forget to applaud the welcome attention this year brought to maximizing the entrepreneurial potential of women. A recent report, Overcoming the Gender Gap: Women Entrepreneurs as Economic Drivers, showed that despite the fact that about 46 percent of the workforce and more than 50 percent of college students are female, they represent only about 35 percent of startup business owners and tend to experience less growth and prosperity compared to firms started by men. Further, women take fewer steps to position themselves to start high-growth companies. At the university innovation level, female faculty patent their research at only about 40 percent of the rate of their male colleagues, and they tend to rely on formal university conduits to commercialize their research, rather than reaching out to private industry.
As Lesa Mitchell, Kauffman Foundation vice president for advancing innovation, and the paper's author, pointed out, "Women's entrepreneurship is an economic issue, not a gender-equity issue." And thanks to organizations like Astia and events like the Kauffman Foundation’s FastTrac Global Women's Summit in Kansas City last month and the We Own it Summit in London in June, the next 10 years are being called the 'Decade of the Woman Entrepreneur'. This and other summits in 2011 brought together bright minds to address the motivations, funding issues, metrics and solutions for women's participation in high-growth entrepreneurship. With more data now available, at such events we can finally start separating more myths from reality.
For example, scientific education is not the main barrier in the U.S where more women than men are earning PhDs in the biological sciences. The problem is that few have been educated as innovators. Without entrepreneurial education, this growing percentage of the scientifically skilled community will not contribute to U.S. economic competitiveness through innovation. Researcher and prolific writer Vivek Wadhwa’s findings also helped dispel motivation assumptions. His data shows that both men and women tend to have an equally strong desire to build wealth. The only clearly perceptible difference was in the encouragement that they received from co-founders.
The lack of encouragement of high-growth female entrepreneurship trickles down to the investment pool. For instance, a study by the Angel Capital Education Foundation (ACEF) revealed that of the estimated 225,000 angels who invested a combined $23.1 billion in nearly 50,000 entrepreneurial deals in 2005, no more than eight percent were female. In the 2009 funded list of top VCs, only one in 84 was a woman.
Programs like ACTiVATE®, which helps women start technology-enabled businesses by bringing together complimentary programs to help women build capacity as they grow and scale their businesses, are smart investments. Arecent independent economic impact study showed ACTiVATE to be a cost-effective method for job creation. Connecting women mentors and investors is also the focus of organizations groups like Women 2.0, Astia, the Anita Borg Institute, and Iridescent. Their participants have increasingly more role models to look up to, such as TechCrunch CEO Heather Harde, IBM CEO Virginia Rometty, Padmasree Warrior of Cisco, Sandy Jen of Meebo, Marissa Mayer of Google, Freada Kapor of Level Playing Field Institute, Angela Benton of NewMe Accelerator, and Shaherose Charania, the founder of Women 2.0—but many more are needed.
During these tough economic times, when entrepreneurship is so important to adding dynamism and jobs to the economy, women hold a key to economic growth. The untapped potential of women as entrepreneurs, mentors and investors is a missed opportunity not just for women, but for entire economies.
Happy Holidays. We will be back in the New Year.