In recent years, we’ve witnessed a remarkable shift in the business landscape – women are now starting new businesses at unprecedented rates.
Since 2020, women have made up 47% of new business owners, a significant jump from 29% in 2019, nearly reaching gender parity, according to a 2023 report by Gusto. This trend isn’t limited to the West; it’s a global phenomenon that’s reshaping economies worldwide, including in the Middle East.
“The old stereotypes of business being a ‘man’s world’ are crumbling”
One in every three growth-oriented entrepreneurs globally is a woman. In developing countries, 17% of women are entrepreneurs, 35% aspire to become entrepreneurs, and over 50% view entrepreneurship as a path to a better future, compared to only 25% in high-income countries.
Why women start businesses
Why are we seeing this surge in women’s entrepreneurship? Several factors are at play.
Firstly, there’s been a cultural shift. As societies become more egalitarian, women are increasingly seeing entrepreneurship as a viable career path. The old stereotypes of business being a “man’s world” are crumbling, opening doors for women to pursue their entrepreneurial dreams.
Secondly, technology has democratised business ownership. The digital revolution has lowered barriers to entry, allowing entrepreneurs to start businesses with minimal capital. This has been particularly empowering for women, who have historically faced greater challenges in accessing traditional funding.
Lastly, the COVID-19 pandemic, while devastating in many ways, created new opportunities. As traditional employment became less stable, many women turned to entrepreneurship out of necessity or to pursue long-held dreams. The rise of remote work also provided flexibility that many women, especially those balancing professional and family responsibilities, found appealing.
The motivations for entrepreneurship do, however, differ economically; in lower-income countries, women often pursue entrepreneurship out of necessity due to job scarcity, while in high-income countries, the focus is on business scalability.
Socioeconomic patterns also vary; for example, the Middle East and North Africa region has lower participation of women in the formal labour force (25%) compared to the global average of 40%, encouraging entrepreneurship as a means to a professional endeavour.
Women leadership in the GCC
In the Middle East, however, the trend is encouraging. Most STEM graduates in the Middle East are women and tapping into this valuable resource is a key focus for the region. According to McKinsey, the digital revolution and the rise of entrepreneurship are expected to significantly boost women’s participation in professional and technical fields in the Middle East by the end of this decade.
“The rise of women entrepreneurs is not just about equality; it’s about unleashing untapped potential for innovation and economic growth”
These developments are not just inspiring; they’re economically crucial. Women-owned businesses contribute significantly to job creation and economic growth. From creating a powerful leadership brand to leading communities, we are seeing staggering results for women who want to ditch the corporate world and live a life of freedom, all whilst creating impact.
However, challenges remain. Women entrepreneurs still face barriers in accessing capital, with only 2.1% of venture capital funding globally going to women-led start-ups in 2023. A startling statistic is that investors get 63% more returns on investment from women entrepreneurs than from male start-ups, according to TechReport.
The future is female
For us to continue the upward trend of female entrepreneurs, targeted policies and support systems are essential. These include improving access to finance, providing mentorship programs, and creating networking opportunities specifically for women entrepreneurs. Initiatives like the Women Entrepreneurs Finance Initiative (We-Fi) have mobilised over $354 million designed to unlock financing for women-led/owned businesses in developing countries, including in the most challenging environments.
Another example is Visa’s worldwide initiative, She’s Next, which aims to support women entrepreneurs by facilitating their access to funding. This program has already distributed over $2.2 million to women-owned small businesses across various countries including the United States, Canada, India, and Ireland.
The rise of women entrepreneurs is not just about equality; it’s about unleashing untapped potential for innovation and economic growth. As we move forward, supporting and celebrating women entrepreneurs should be a priority for governments, investors, and society at large.
The future of business is increasingly female, and that’s good news for everyone.