As Entrepreneurship Thrives, Women Are Starting More Innovative Businesses Than Men

Americans are feeling pretty good about starting companies. More than 25 million Americans were starting or running new businesses in the United States in the past two years, and more than half see opportunities for starting companies, according to the new Global Entrepreneurship Monitor (GEM) 2016 United States Report from Babson College.

More than ever, the people seizing those opportunities are women.

The report, a snapshot of startup activity around the world, found that entrepreneurship rates rose for women by one percentage point, while holding steady for men. While that’s not a big jump, it is notable at a time when headlines have been blaring about sexual harassment in venture capital firms and when women continue to receive only a small fraction of investor dollars.

One key finding counters any idea that innovation is the domain of men. Women were more likely than men to introduce products and services that are new to customers and not generally offered by competitors (40 percent compared to 35 percent).

Courtesy of Babson College

Americans see more startup opportunity than ever.

Though the gap between women’s and men’s perceptions of opportunities and entrepreneurial intentions narrowed in 2016, in some areas the gender gap did increase. Women express less confidence about their ability to start a company, with 48 percent of men expressing concern and 62 percent of women.

The report showed some differences in industry as well. Compared to men, women start a much higher percentage of businesses in wholesale and retail, as well as in health, education, government, and social services. Only 3 percent of women entrepreneurs start information and communications technology businesses, compared to 11 percent for men.

The power of perception is also at play when women describe their companies. Only 3 percent of women entrepreneurs consider their businesses to be in medium or high technology sectors compared to 8 percent of men. But women entrepreneurs are almost as likely as men to use new technology in their businesses--9 percent compared to 10 percent for men.

“The fact that women are adopting new technologies as often as men shows they are tech savvy, though they are not starting companies in traditional technology industries,” says Babson College Professor Donna Kelley, co-author of the report. “But the fields they tend to dominate, such as health care and education, are surely being transformed by innovations, which are facilitated by technological advances. We need to recognize this, and the impact of women entrepreneurs in these fields."