5 must-reads on women's entrepreneurship

There is growing support for, and recognition of, the vital role women entrepreneurs play in boosting economic productivity and growth.

However, women’s entrepreneurship is still overwhelmingly concentrated in low productivity sectors with limited growth potential. According the the World Bank, almost 1 billion women have the potential to positively impact their economies as entrepreneurs and workers, yet they are unable to do so due to unique challenges when starting and growing businesses, leaving a widely untapped source of economic development and innovation.

Here are five must-reads that take a look at women’s entrepreneurship trends:.

1. “A Roadmap for Promoting Women’s Economic Empowerment”

Published by the United Nations Foundation (September 2013, 146 pages)

A joint research initiative by the United Nations Foundation and ExxonMobil Foundation, this report examines what interventions have the greatest impact on women’s earnings and productivity around the world. It analyzed this question for different groups in diverse country contexts and broke it down into four categories: entrepreneurship, farming, wage employment and young women’s employment. It summarizes 18 research studies that analyzed 136 historical and current evaluations of programs with women’s economic empowerment components.

The report recognizes entrepreneurship as a means of achieving women’s economic empowerment, especially in rural or urbanizing economies where women face increased difficulty obtaining wage employment. Three of the key findings are that capital alone does not translate to growth of women-owned subsistence-level firms, business training may improve practices but also on its own doesn’t impact an enterprise's success and that access to savings tends to increase earnings.

The report recommends both policy and program reform. Strong policies that create a supportive business environment, secure property rights for women and other legal protections are key to promoting women’s entrepreneurship. Likewise, programs that are specifically targeted to women entrepreneurs — whether they provide financial assistance, business training or technical assistance through individual business visits, mentorship or network building — have a higher chance of boosting the performance of female-run enterprises.

2. “Supporting Growth-Oriented Women Entrepreneurs: A Review of the Evidence and Key Challenges” 

Published by the World Bank Trade and Competitiveness Group (September 2014, 20 pages)

Along with efforts to facilitate the entry of women into business ownership, there is increasing interest in understanding what growth-oriented women business owners need to expand their companies.

This policy note by the World Bank Trade and Competitiveness Group reviews empirical literature on female entrepreneurs with growth potential who wish to expand their companies, looking at the differences between male and female-led companies and extracting lessons from programs that support women’s entrepreneurship.

The report finds that women-led businesses performed as well as those run by men and that there was no difference in the survival rate between the types of firms.

It also found that programs supporting women entrepreneurs have mixed impact and many don’t have a translate to business growth or success. They also tend to largely be limited to microenterprises and the report authors write there is a need for more evaluation of growth-oriented entrepreneurship programs.

The note stresses that successful programs need to be tailored to address the unique and numerous social, legal, and financial barriers that women face, and need to move beyond the typical female-dominated field of microenterprise and low-productivity or low-technology enterprises.

3. “Effectiveness of Entrepreneurship Development Interventions for Women Entrepreneurs” 

Published by the International Labor Organization (December 2014, 16 pages)

This ILO brief investigates the effectiveness of women’s entrepreneurship support programs. The authors synthesize results from six meta-evaluations and 23 impact assessments of women’s entrepreneurship initiatives from 2010 to 2014 that analyzed the business outcomes of programs focused on “women’s entrepreneurship development,” which aims to increase the economic opportunities of women entrepreneurs. The brief notes that these evaluations were “almost exclusively” among microentrepreneurs.

This brief calls for future research to distinguish between the different stages of women’s businesses, and the impact of entrepreneurship programs to better address their varying needs.

The authors also finding that finance alone is insufficient to support business growth for microenterprises, and business training alone has little measurable impact on the performance of existing women-owned enterprises. However, there is evidence that providing finance to women with larger or high-performance businesses does have a positive impact on women’s business growth.

The key takeaway from the ILO’s assessment is the effectiveness of a bundled approach, advising that business training, in combination with follow-up technical assistance and business grants, may be more successful in supporting the business growth of existing female entrepreneurs.

4. “The 2015 Female Entrepreneurship Index”

Published by the Global Entrepreneurship and Development Institute (June 2015, 51 pages)

The 2015 FEI by the Global Entrepreneurship Development Institute analyzes the entrepreneurial ecosystem, examining the overall business conditions in 77 countries. The assessment focuses on the strengths and weaknesses within the countries that either foster, or act as constraints to, women-led growth-oriented ventures.

The index highlights areas that need improvement to enhance the success of women entrepreneurs, like improving women’s perceptions of their skills in East Asia or increasing access to banking services and business training programs in sub-Saharan Africa.  

The index includes three key findings. First, there is an increase in female “business gazelles,” described as female entrepreneurs who intend to grow their businesses by 50 percent and employ 10 people within five years. The percentage of these women increased by 7 percent from 2014 to 2015. Second, there is an increase in highly educated female entrepreneurs. Female entrepreneurs who have had some form of post-secondary education increased by 9 percent. Lastly, innovation and participation in the technology sector has declined among female entrepreneurs. This trend indicates that although there is an increase in the use and transfer of technology, there is a decrease in new technologies being produced.

5. “Women, Entrepreneurship and the Opportunity to Promote Development and Business”

By Carmen Niethammer (Brookings Institution, 2013, 9 pages)

Carmen Niethammer takes a systems-approach look at women’s entrepreneurship, underlining the challenges faced by both women entrepreneurs, and the programs designed to promote women’s entrepreneurship. The report finds that access to finance and the fact that fewer women have bank accounts are leading barriers to developing women’s businesses.

The report says that the number of female-owned enterprises is growing at a faster rate than male-owned enterprises, and there is no evidence that female-owned enterprises fail at a faster rate.

Niethammer identifies the significant lack of supplier diversity in government expenditures as an area of opportunity for women’s entrepreneurship programming.  Increasing supplier diversity would allow governments to address inequities in the marketplace, enable them to tap into the economic potential of women business owners, and bring skilled women-owned vendors into the supply chain, which increases innovation, purchasing options, competition, and business growth, according to the report.

The author also writes that the private sector can play a key role in shaping policies and legislation that benefit women entrepreneurs, and that partnerships have the potential to create a large-scale impact on women’s entrepreneurship.

For more practical reading on programs to support and expand business growth for women entrepreneurs, check out Goldman Sachs’ 2015 progress report on their 10,000 Women initiative, “Investing in the Power of Women,” and  Sarah Kaplan and Jackie VanderBrug’s “The Rise of Gender Capitalism,” which explores impact investing with a gender lens.

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