What is Driving the Rise of Women-Owned Businesses Around the World?

The last few years have been transformative for the economy, but one of the most notable and exciting new developments is the significant increase in women-owned businesses around the world. Half of all the new businesses started in the United States in the last year were founded by women, while nations in Southeast Asia, South America, and Europe saw significant gains in women’s entrepreneurial activity. This sizeable step towards gender equity is a promising sign of the effectiveness of the global efforts to expand business opportunities for women.

There is no single cause or approach which created this shift, but rather a wide range of factors and efforts to close the gender equity gap. As women and supporters of gender equity continue to make strides, it’s critical to understand and learn from their work, and to document novel and successful approaches in order to expand access globally. What is clear from these numbers is that women entrepreneurs have shown tremendous resilience and creativity in the face of uncertain economic headwinds, and that their efforts can be built on and expanded. Here are some of the key factors in this new development:

Networking

One of the most durable and powerful tools available to women entrepreneurs is the network of successful and growing women-owned businesses, leaders and mentors which they can tap into at every stage of their journey. As more and more women start businesses, this network becomes more robust and useful, able to facilitate and support further entrepreneurship and opportunities for aspiring leaders. Many of the challenges that new business leaders face can be more easily overcome through these networking efforts.

Networks are built through relationships, whether they be formed on the job, in school, through networking events or one’s personal life. Global networks have helped women entrepreneurs around the world make major inroads in particular sectors, such as educational services (where they own 45% of all businesses), scientific services and retail. Each new woman entrepreneur can strengthen the power of the network, creating a sustainable support tool to help share strategies, identify new opportunities, and facilitate access to financial resources and capital.

Changing Social Norms and Ideas of Leadership

The normative view of entrepreneurs and executives as exclusively male has fallen away as women business leaders have broken through the glass ceiling to hold positions of power and influence in business, government and culture. As these norms shift, society as a whole becomes much more open and encouraging, and women learn from a young age that they can achieve more than prior generations.

This is also critical in business relationships, as women entrepreneurs have emerged as a force that can break down systemic barriers to success and redefine what leadership looks like. This shift is poised to continue as the next generation of women leaders are watching and learning, ready to push further towards true equity and gender parity.

Access to Capital

Representation is critical, but it is not the whole battle, as successful entrepreneurship also requires leaders to have access to capital and investment in order to build larger, more sustainable and influential businesses. Specific efforts have been made to increase women’s access to funding and resources, a critical piece of the global rise of women-owned businesses. It’s also notable that women leaders are using their personal networks to raise funds, an increasingly effective tool when other funding sources remain unwilling to fund women-owned businesses.

The increase in entrepreneurship among women shows how powerful this network funding approach can be. As more women-owned businesses mature and become critical parts of the business landscape, network funding will only become more powerful and effective. This network approach is also instrumental in providing educational and advisory resources to new entrepreneurs, as financial planning and management are a crucial part of business sustainability and growth.

Institutional Support and Awareness

Over the last decade, governments, private sector organizations and nonprofits have created programs and legislation to encourage investment in and promotion of woman-founded organizations. Whether they be tax incentives or corporate-sponsored networking events, this kind of institutional support can help both new and established women entrepreneurs develop invaluable connections, and access new tranches of resources and support.

Local and global efforts to support women entrepreneurs have paid off. Globally, women lead 33% of high-growth businesses and 40% of export-driven firms. The growth of female entrepreneurship shows that these efforts are both effective at encouraging gender equity and are valuable investments in the future, as the growth of new businesses can help drive innovation and efficiency. Legislative and corporate programs can also help make up for the lack of financial investment and education that women founders and entrepreneurs have historically struggled with. These efforts have significant network effects as well, as a law or corporate program that demonstrates its effectiveness in one country can be employed in other countries, regions or around the world.

The Work Isn’t Done

The recent increase in women entrepreneurship is the direct result of years of effort by women leaders, legislators, activists and executives — all committed to greater equity and access to resources and support. They’ve been able to build extensive, thriving networks; institutional funding and resources; and mentorship programs; and have redefined the global understanding of entrepreneurship. Despite these efforts, there is still a lot of work to be done to solve persistent disparities in wages, access to capital and institutional support.

WTCA is proud to contribute to this effort and celebrate these achievements in honor of International Women’s Day (March 8) — this year’s focus on Rights. Justice. Action. For ALL Women and Girls — with the launch of Women@WTCA, a new community group within the network that is dedicated to fostering a supportive, inclusive environment where women can thrive. The community’s Inaugural Meeting was held on March 9, and marked the beginning of a collaborative platform designed to elevate women’s leadership, amplify diverse voices and strengthen opportunities across our global network. The Women@WTCA community group is open to all to join — including male allies — who are committed to building a more equitable and empowering professional community. Read more about the Women@WTCA community group and the Inaugural Meeting here.