Women in Innovation and Entrepreneurship: 2nd In Blog Series
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| Blog Post | |
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| Title | Gender Gaps for Women in Innovation (Blog Post) |
| Author | Carlin Cherry |
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| © edegan.com, 2016 | |
Abstract
This blog post seeks to analyze what women need in order to increase their participation in the Entrepreneurship and Innovation-related workforce.
Blog Post
Earlier this month, McNair Center researchers analyzed the importance of women's participation in entrepreneurship fields. We found that economic growth from women's official entry into the labor force has slowed from its mid-twentieth century spike, and with this, modern-day economists are searching for the economy-boosting equivalent to women's entry to the labor force. [1] Given the rising share of women among educated workers, it is clear that the future of American economic growth is in the hands of women, specifically female entrepreneurs and small business owners. To read more about the importance of women in an ever-increasingly diverse workforce, see the first installment of our blog series here. [2] Given their importance not only in terms of contributing to a diverse workforce but also as a boon to increase world economic growth, why haven't we seen a dramatic growth in women in the entrepreneurship and innovation sectors?
The Kauffman Foundation reports that the percentage of women starting businesses in the United States has stagnated, while the number of businesses started by men continues to increase. Sixty-three percent of new businesses started in 2014 were started by men, while 37 percent were started by women. This representation shows that, nationwide, men are making up nearly twice as much of the entrepreneurial population than women. Furthermore, there are only 48 new women entrepreneurs out of every 100,000 people for the average city each year. [3] Almost half of female founders say that cite lack of available mentors as a constraint on their willingness to enter the fields of entrepreneurship and innovation. [4] It's clear that more female founders can help increase the density of female entrepreneurs across the United States. Developing a mentor-style program for female entrepreneurs will be critical in adding new businesses and new jobs to our cities.
It's not just numbers in terms of population of female entrepreneurs, it's also about numbers in terms of capital allocation. The Brookings Institution reports that another barrier women face is access to capital. Women-headed households generally have lower levels of household wealth, which in turn can make internal investment and external borrowing more difficult. [5] In fact, a third of female founders say lack of capital constrains them from going into fields of entrepreneurship and innovation. [6] Expanding Small Business Administration (SBA) loan programs for women would help increase access. Specifically, the New Markets Tax Credit (NMTC) has helped attract over $60 billion in private sector funding for minority entrepreneurs across the United States. [7] Targeted lending programs like these are ways to help expand women's access to capital, which will help increase women's presence in entrepreneurial fields. The National Women's Business Council also suggests that putting women in positions as asset allocators, investors, and bankers can support the flow of capital to women owned businesses in an ancillary way. [8]
There isn't a quick fix for many of the systemic biases against women in fields of entrepreneurship and innovation, but it's clear that on both economic and equality terms, something must be done.
References
Blog Posts Included in this Series
Women in Innovation and Entrepreneurship: 3rd in Blog Series
Google doc
https://docs.google.com/document/d/1wdteFhtIEsAlctNjM9Mux4oEzhHryyJJKh0msgqNlqQ/edit
