Women: Europe's under-exploited entrepreneurial potential
Getting more women to start and scale up their business is key to Europe’s economic growth, explains Lowri Evans.
The European economy is reliant on the vibrancy of its SMEs and on the prospects entrepreneurship brings. Entrepreneurship is a powerful driver of economic growth and job creation, especially when small companies become big companies.
From that perspective, Europe is not performing as well as the US, and we need more companies scaling up to reap the opportunities offered by globalisation. This is obviously true for businesses run by women.
Women represent a large pool of under-exploited entrepreneurial potential in Europe. On average, women represent fewer than 30 per cent of entrepreneurs in Europe, and this number has remained static over the last decade. Also, when they do start their own business, women tend to have more conservative entrepreneurial ambitions and to have less proclivity to scale up.
The obstacles to women entrepreneurship are partly societal and partly economic. Initiatives targeting women specifically can help address our self-limitations. For example, making positive role models known and visible or setting up business networks which have a gender dimension are part of the answer to women's relative lack of confidence and conservative attitude to risk.
Women are also disproportionately affected by the difficulties which all entrepreneurs face: digitalisation and access to funding.
First, having appropriate digital skills is now indispensable to the success of any entrepreneur. The digital gap is considerable and actually increasing. In 2015 data, women represented only 16 per cent of the ICT specialists and 17 per cent of ICT students.
Not all companies are digitally-driven but most need to be digitally enabled. Every woman setting up a business needs to understand what digitalisation means for her sector. So we need ICT schemes that target all women who want to get into business, across all generations not just young women.
Secondly, there is a structural problem with access to finance in the European economy generally. We need to get massively more money into the European system, for all who want to create a business.
"Women represent a large pool of under-exploited entrepreneurial potential in Europe. On average, women represent fewer than 30 per cent of entrepreneurs in Europe, and this number has remained static over the last decade"
European Commission President Jean-Claude Juncker made this the first priority of his mandate. And results are already tangible. For example, within the European Fund for Strategic Investment, a specific scheme aims to de-risk loans provided by national commercial banks to SMEs.
The success of this initiative is illustrated by the fact that the invested funds achieve leveraging of more than 30 to 1.
There is more to do on access to finance than just loans. In particular, we do not have enough venture capital for the scale ups, and we need our venture capital industry to be providing advice as well as money.
Crowdfunding also represents a very useful financial mechanism for entrepreneurs to test out business models before they go to the market. And data show that although significantly more men than women use that approach, when the women do, they are more successful.
Women entrepreneurs should be encouraged to access all those types of funding, through measures that take their specific needs into account. Given the large differences between the economic situations in the different EU regions and Member States, this support must be designed and delivered at local, regional and national level, with of course the help of the European level.
"Crowdfunding also represents a very useful financial mechanism for entrepreneurs to test out business models before they go to the market. And data show that although significantly more men than women use that approach, when the women do, they are more successful"
So what also can be done at European level? In addition to our horizontal programmes to support SMES and entrepreneurship, some of our initiatives specifically target women entrepreneurs.
We have funded the creation of an online Europe-wide platform for women entrepreneurs called WEgate which was launched in September 2016. It aims to facilitate access to learning, mentoring and business networks across Europe, in a hub approach.
We are also supporting the setting up of a new community of women business angels and women entrepreneurs to facilitate women's access to alternative access to funding. This initiative covers 14 EU countries.
In addition, we want more women entrepreneurs to get funds through our Horizon 2020 SME instrument. The organisations from the Europe Enterprise Network help raise awareness on the potential of this instrument and give information and training to support successful participation.
Overall, to achieve better results for women entrepreneurs, those initiatives at EU level need to be leveraged by coordinated and complementary policies at national and regional level. We will continue to work to achieve this.
Raising awareness and ensuring transparency are key factors in determining successful energy-efficient urban regeneration, says Paweł Nowakowski.
New EU draft directive an 'attack on workers’ rights', argues Claudia Menne.
Europe has all the ingredients for a smooth transition towards the connected age – now it needs to get the mixture right, argues Tony Graziano.