By: First Union
Women Entrepreneurs: Spurring Economic Growth 2022
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A recent study provided some very eye-opening results regarding what encouraging women's equality in the corporate world could potentially do for the economy. According to the results attained, advancing women in terms of business and industry across the board could lead to a 12 trillion dollar upswing in the economy. This is roughly equal to the size of the economies of the US and China combined. What needs to happen is that there have to be more opportunities opened up to women, greater equality overall, and more fostering of women entrepreneurs. Governments tend to look to things such as tax cuts or foreign investment to help stimulate the economy when all they need to do is to promote the incredible resource they already have: women.
Inequalities as Seen in The Realm of Business
While many efforts have been made especially over the past decade to enhance the position of women in light of that of their male counterparts in the business world, such efforts still are not enough. The figure for instance, according to the World Economic Forum, stands that for every dollar a man makes, a woman will get approximately 54 cents.
And it is not just in terms of compensation that such inequality is rather glaring. Recently an experiment was undertaken by researchers from Harvard and MIT. An identical idea gets pitched to investors—the voice changes with each pitch. In the end, two-thirds of the investors chose that which was pitched by a male voice.
And yet there is documented evidence that startups which are founded and/or co-founded by women perform overall more successfully than those founded by men. What this seems to suggest is that investors often fail to take women seriously, they fail to give them the entrepreneurial credit they rightfully deserve. Without question there is a gender gap when it comes to entrepreneurship. In Europe for example, female entrepreneurship represents only 30% of all entrepreneurs. It will undoubtedly take decades to close such a wide gap.
The Potential of Women is Limitless
Time and time again research has shown that head to head, women fare just as well as men if not better in some instances. For example, the Harvard Business Review found that women tended to score better than men in terms of leadership abilities and skills. They also frequently outscore their male peers in such areas as problem-solving, teamwork, and innovating. All of these are aptitudes that are critical for an entrepreneur; it simply goes to show that yes, women as entrepreneurs are being undervalued.
More than just excelling at the types of skills an entrepreneur requires, women are also being seen as increasingly financially savvy. One report demonstrates that women have 40% of all global wealth, and this number has been increasing over the past century. It all does come down to opportunity; when given the right opportunities, the right openings, and assistance, women perform, period. They get it done. And this is ultimately how we're going to close that gender gap—by providing such opportunities.
Women Centric Businesses Could Help Close the Gap
As far as investor and venture capital funding goes, a survey suggested that a whopping 80% of such funds generally get funneled to teams consisting of all males. In 2017 for instance, only 2% of such funding went to all women anchored teams—a pretty sad commentary on how women entrepreneurs are assessed and consequently esteemed.
Many suggest that perhaps creating more women-centered businesses could potentially be a way to start filling the gap. Women understand other women—they know what they need, what they're looking for in their daily lives. Coming up with ways to address these needs and solve everyday problems, a woman entrepreneur could carve out a fairly successful niche.
Men Helping Women – Becoming Allies
There is still as we have seen a great deal of work that needs to be done now to create a level playing field for women and men alike. There is the issue of equal pay of course, equal access to funding as noted, as well as the promotion of more women to leadership positions within companies. That said, men can also do more to promote the cause of women entrepreneurs and more, generally speaking, women in business.
There should be an initiative to have more women focused on networking opportunities. Give women in the corporate world for instance events where they can sit down and talk with senior leaders or the CEO. Mentorship can also come into play here. Additionally, many in senior roles within companies do have opportunities to partner with women-founded startups and thereby encourage a new woman-owned business venture.
Men need to be more proactive when it comes to promoting women to top positions and thus ensuring that leadership is representative of both women and men. As far as women on boards, a study found that they make up only 15% of board seats across the globe. This number needs to change. More men need to push for more of those board seats to go to their female counterparts.
In simplest terms, men need to start treating women in the world of business as equals. While certainly many men do, some will ignore or interrupt a female colleague. Allowing women to speak up and do so confidently is critical to making sure that a woman's presence is felt, and that she does feel encouraged within the company culture.
At First Union Lending we work with numerous women-owned companies across the country. We are invested in the success of these businesses and we do all that we can to help them thrive and grow. Our business loan programs are custom-tailored to suit your company's individual needs. No one size fits all approach with us. Call today and see how we might be able to help your small business.