Achieving true diversity in entrepreneurship is a challenge, but should it be?
Women entrepreneurs possess 42% of businesses, employing 9.4 million and yielding about $1.9 trillion in yearly revenues across the nation. However, in 2023, they still continue to battle stereotypes.
In a 2022 survey conducted by Women Entrepreneurs Association, a significant proportion of women business owners were found to have expressed concerns about inadequate federal support. The survey, which included 1200 participants across various industries, revealed that 76% of respondents perceived a lack of sufficient government assistance tailored to their unique challenges. This sentiment was further highlighted by the fact that only 22% of participants reported accessing federal programs designed to promote women-led enterprises.
In response to these discrepancies, we are hearing calls for increased federal support for women entrepreneurs, whether direct or indirect, across the nation, demanding more urgent attention.
Female entrepreneurs often face smaller loans in their pursuit of increased funding — about 50% less than male-owned enterprises. Along with this, they frequently encounter gender bias in venture capital — a mere 2.4% allocated to female founders. 31% of them are compelled to simultaneously balance business endeavors with the responsibility of tending to school-aged children.
The continuation of a perplexing disparity persistence has raised concerns. It’s not that the transformative potential of gender diversity has not been well-documented. Research has, many times, clearly demonstrated the superior performance of companies with diverse leadership teams.
Today, while overall women make up 47% of the workforce, only about 42.1% of them hold top managerial positions. It’s concerning to observe their underrepresentation in top management and C‑suite positions, which remains disproportionately low within the entrepreneurial ecosystem.
From the years 2019 to 2021, the percentage of women in management roles remained relatively steady, hovering around the 40.9% mark. However, the year 2022 marked a decline, with women occupying 35.0% of management positions. It’s a potential ‘alarm bell drop’ that signals the need for an urgent analysis of the factors contributing to this setback.
A report published in 2014, titled ‘21st Century Barriers to Women’s Entrepreneurship: Majority Report of the U.S. Senate Committee on Small Business and Entrepreneurship’ by Maria Cantwell, had also highlighted concerns raised by women entrepreneurs about a significant lack of federal support across various dimensions. The report points out women entrepreneurs being hindered by unequal access to government contracts, ultimately limiting the growth of women-owned businesses.
Historical observations and reflections undeniably confirm women’s significant progress across various sectors in breaking through the glass ceiling, parallel to their male counterparts. As such, even a slight lack of federal support becomes truly concerning.
There are some notable initiatives and organizations working to address gender disparities in entrepreneurship:
- Access to Capital for Entrepreneurs (ACE): In 2022, ACE provided over $36 million in loans, with 98% going to underserved entrepreneurs. They allocate more than 77% of their loans to BIPOC entrepreneurs, 55% to women business owners, and 26% to low-income entrepreneurs.
- Amber Grant Foundation: This foundation offers a monthly grant of $10,000 to women-owned businesses.
- Cartier Women’s Initiative: Since 2006, the Cartier Women’s Initiative has supported over 330 impact entrepreneurs from nearly 70 countries, awarding more than $9.5 million in funding for their mission-driven businesses.
- BELLE Capital USA: BELLE Capital USA is an early-stage angel fund that focuses on capital-efficient companies in various market sectors. They prioritize businesses with at least one female founder or executive and have granted over $2 million in funding each year.
Despite the presence of Women’s Business Centers, such as the American Business Women’s Association (ABWA), which holds over 5,000 business/networking meetings nationwide in all states, women entrepreneurs still struggle to acquire relevant business training and counseling. The outdatedness of these centers since the 1990s, coupled with stagnant funding, further worsens this issue. The reauthorization and adequate funding of Women’s Business Centers, particularly focusing on low-income women entrepreneurs, is key to ensure they receive effective business support.
A parallel scenario unfolds in the political realm, where women constitute about 27.9% of the United States Congress in 2023. This statistic, while an improvement from previous years, serves as a reminder of the ongoing struggle for gender parity in legislative decision-making.
Similarly, an unbalanced distribution again comes to the fore in the industry-specific leadership. Industries such as human resources, education/social services, and healthcare have embraced women in leadership roles, with percentages ranging from 33% to 74.85%. On the other hand, sectors like manufacturing, technology, and finance exhibit significantly lower levels of female representation.
While trends and projections show a gradual increase in women’s representation, the figures remain far from reflective of a truly balanced landscape. The upward trajectory from 0% of Fortune 500 women CEOs in 1995 to 10.4% in 2023 is remarkable, yet it underscores the long, demanding road ahead. Same can be said about the rise from 2.3% of women in the US representatives in 1995 to 28% in 2023.