Women make up about half the world's working-age population. Yet gender gaps still exist in business even though women are a key factor in the overall economic health of any society. A recent report by McKinsey Global Institute concludes that equal representation of women in the labor and business markets could potentially contribute $12 trillion to global GDP by 2025. Though enormous progress has been made, gender parity remains a continuous challenge. Women entrepreneurs still face significant obstacles to business ownership leaving innovative potential on the table. As a result, women start businesses at half the rate of men. This imbalance is detrimental to global economic expansion and growth. Here are four important reasons women business owners are critical for the economy:
Women Embrace Diversity
Female executives and entrepreneurs recognize different and more unique niches than their male counterparts do. With women at the helm, areas of the marketplace once overlooked are now incorporated into the everyday business model. Because women are personally aware of discriminatory practices, their approach to business also often includes a wide range of workplace diversity.
Women tend to hire across the population with a keen understanding of the economic benefits of a diverse and multicultural workforce. A 2018 study by Harvard Business Review concluded that companies with higher than average diversity have a 19% higher innovative revenue.
Women Are Job Creators
Low unemployment is the engine of a robust economy and women are increasingly stepping in as job creators. Women-owned businesses are quickly outpacing their male counterparts in their contribution to U.S. unemployment. While only 40% of U.S. businesses are owned by women, almost 9 million Americans work for companies run solely by female entrepreneurs. This increases to 14% when the business is operated by equal male and female teams.
The economic impact for women as a whole and for the enterprising health of the general population cannot be overlooked. Women are proving to be a driving force behind new ideas and changing opportunities for all.
Women Are Influencers
Leading by example, women business owners are key to shaping the next generation of entrepreneurs. They serve as role models to young and less experienced girls and women. They often collaborate with other women to offer mentoring programs as well as support networks like Pailor to foster business growth. These communities generate as much enthusiasm as they do success stories.
Mentors play a crucial role in influencing and motivating future businesses, especially on the local level. Connecting women with other female entrepreneurs can make a huge impact on a healthy economic future driven by women.
Women Are Good At What They Do
Women have a significantly different approach to business than men do. Though they are competitive in the fundamental skills needed for success, and women excel at the soft skills giving them an edge. These include competency in conflict management, adaptability, and effective communication. Women are more apt to see opportunities where others may see risk and are willing to creatively forge ahead. This puts them at an advantage in niche markets helping them to prosper.
Women in leadership roles possess an inherent emotional intelligence paving the way for smooth interactions with customers, employees, and suppliers. They are natural multitaskers with the ability to maintain and balance multiple priorities. All of that along with superior negotiating skills and interest in long-term success, women are making a powerful economic impact around the globe.
Fundid is on a mission to get women owned business the capital they need to grow so that we can all close the business wealth gap. While 42% of business in the US are owned by women they only account for 4% of revenue generated by private businesses. We spend our time at Fundid thinking about what the world would look like if women also generated 42% of revenue and how to get them the capital they need to make that happen. Fundid is a challenger business bank, business lender and grant marketplace built on from the feedback of women entrepreneurs.