Female entrepreneurship A global phenomenon with the power to shape the future

In 2024, Forbes made a striking proclamation: "The landscape of entrepreneurship is ripe for transformation, and women stand at the brink of unprecedented opportunities." Now with 2025 in full swing, it is time to take a step back and assess the status of female entrepreneurship - not just last year, but in a broader context.

The GEM Report: Women's entrepreneurship on the rise

A comprehensive overview of the global state of female entrepreneurship can be found in the 2023/24 Women's Entrepreneurship Report published on 19 November 2024 by the Global Entrepreneurship Monitor (GEM). More than four million people from 120 countries have been interviewed and 50,000 experts have been consulted since the first report was published. The latest edition is the twelfth in GEM's 25-year history and once again covers a wide range of countries, regions, economies and sectors of the world in which women are active entrepreneurs.

The report presents an overall positive picture of female entrepreneurship. However, it also highlights substantial regional disparities that challenge direct comparisons. For instance, Ecuador now reports higher female entrepreneurial activity than male, which is an encouraging trend - but it should be seen as a local or regional phenomenon. While similar developments are observed in other African, Caribbean, and Latin American countries, much of this activity falls under subsistence entrepreneurship. These findings, therefore, cannot be directly compared to the high-tech, profit-driven startup ecosystems in advanced economies where women are less active than men in start-up activity, but more involved in innovative, high growth activity.

Encouraging developments

The GEM Women's Entrepreneurship Report contains some impressive statistics. For example, women's start-up activity has risen from 6.1% to 10.4% over the last two decades, with one in ten women in the 30 countries surveyed founding a company in 2023, compared to one in eight men. 

Among high-potential businesses in 45 countries, women now lead one in three high-growth companies and two in five export-oriented startups. There has also been a 79% increase in women perceiving new business opportunities and a 27% rise in those reporting enhanced start-up skills.

At the Global Women's Summit hosted by The Washington Post last October, Asahi Pompey, Global Head of Corporate Engagement at Goldman Sachs, reinforced this positive trajectory. Citing McKinsey's estimates, she described the trend as a "wave of wealth creation," suggesting that by 2030, women could control 60% of the world's assets, driven by increasing entrepreneurial activities, higher employment rates, and rising salaries. The general consensus is that women's entrepreneurship is a logical evolution of global capitalism for the purpose of higher value creation, which benefits everyone, both economically and in terms of social justice, in the feminist sense. The proverbial "glass ceiling" appears to be cracking, and according to GEM, it's only a matter of time before it comes crashing down.

Structural bias as a major barrier

Despite these advancements, the success story of female entrepreneurship is far from unblemished. Structural biases and gender stereotypes continue to create disparities, challenges, and obstacles. Many of the "unprecedented opportunities" proclaimed by Forbes remain theoretical rather than fully realised. 

Dr Amanda Elam, lead author of the GEM report and Research Fellow at Babson College in the US, is cautiously optimistic while providing enlightening context and keeping an eye on biases. Elam also sees the latent danger of a negative stereotype in the impressive figures of women entrepreneurs in developing and emerging countries, for example.

On the one hand, "women's entrepreneurship" is exemplary and "the most effective means of addressing and solving problems such as poverty, lack of health and education in the most marginalised and disadvantaged sections of our economies". Elam is convinced that women's entrepreneurship has become an absolute "game changer" that is poised to transform both developing and developed economies.

On the other hand, as Elam points out, "women's entrepreneurship is also often reduced to the context of a subsistence economy and necessity and opportunity entrepreneurship" and thus remains trapped in the general perception of simpler forms of enterprise. Notwithstanding the eminently positive impact of women's entrepreneurship on general welfare, economic prosperity and the reintegration of refugee women, single mothers or even women released from prison, entrepreneurship in sectors such as crafts or services, as often practised by women in African or Latin American countries, is generally relegated to the status of second-class entrepreneurship. If the nimbus of generally lower sales, margins and growth opportunities in women's economic activity becomes established as a commonplace worldwide, i.e. beyond subsistence economies, then it is transformed into a structural disadvantage, the so-called gender bias. "Sectoral differences and female over-representation among the poorest entrepreneurs account for lower performance of women-led businesses compared to men-led businesses, and consequently reinforce gender stereotype about women's leadership", explains Elam. And a lack of recognition and trust, coupled with higher barriers to raising capital, higher interest rates or collateral requirements, are the tangible consequences of this structural bias against women entrepreneurs.  

Women catching up in high-potential sectors

Examining the achievements of male and female entrepreneurs in high-potential and high-growth sectors of developed markets reveals that any gender biases are unfounded. A study by the Cato Institute, indicates that women in developed countries have, in fact, largely closed the gender gap especially in technology-related sectors. Elam says that when comparing men and women within the same industries, performance differences are negligeable, with some metrics even favouring women. Notably, women often demonstrate greater capital efficiency, yielding higher returns on investment. Elam points out that women also typically have significantly lower default rates and demonstrate more prudent borrowing behaviours. 

Asahi Pompey corroborates that view, stating that 97% of women repay their loans, compared to 94% of men. Investors and lenders, in particular, are now taking note of such findings - and taking them into account, for example, in segmented strategies for women-specific products and marketing.

The rise of FemTech

According to Amanda Elam, there is another reason for the increasing attractiveness of female entrepreneurship to investors, which she summarises under the umbrella term "FemTech": technology created by women for a female clientele, for example in health IT or education technology (EdTech). This sector showcases women's unique innovative capacities and potential to develop completely new areas of business within the high-potential high-growth technology sector. Male entrepreneurs (and the majority of venture capitalists) typically target large, established markets that promise big profits, like IT or artificial intelligence. In addition to the GEM report, studies and entrepreneur support programs - such as the Cartier Women's Initiative - suggest that women entrepreneurs are developing new business ideas in more socially and politically equitable areas of the economy, in what is known as "impact entrepreneurship". According to Elam and the GEM report, this is particularly evident in the massively higher number of high-tech start-ups founded by women in the fields of health, education, social services, care and government, as well as hospitality and wellness. 

"Social entrepreneurs are founding companies that address completely new, big and complex problems in very large markets. And while this may extend the timeline and put a bit of pressure on the ROI, female entrepreneurs are solving problems that no one else is addressing." She is convinced that these social entrepreneurs are creating entirely new and socially more equitable future growth markets. 

Paths to a female future: representative marketing and inclusive, needs-based financial products

While the awardees of the Cartier Women's Initiative such as Humans in the Loop , a Czech company focused on ethical AI that promotes the digitalisation of social projects in conflict zones, or Hexas, from the US state of Washington, a pioneer in the development of alternative and sustainable raw materials to replace wood and fossil fuels) are certainly useful examples and beacons.  They are also examples of resilience, as they faced structural disadvantages that investors are actively beginning to address.”

This starts with simple things such as the inclusion and representation of women entrepreneurs in the advertising and marketing efforts of investors and banks, followed by the development of financial products tailored to women's needs in terms of design, financial literacy or practical application.

The SME Finance Forum's Finance Awards exemplify this shift. Managed by the International Finance Corporation (IFC) of the World Bank Group, the forum has introduced a Best Financier for Women Entrepreneurs category to its annual awards promoting small and medium-sized enterprises worldwide. Last year, 14 financial institutions from Africa, Latin America, the Caribbean and Europe were recognised for their financial products designed specifically for women entrepreneurs. The winners ranged from fintech firms and microfinance and development banks to public-private partnerships.

As these innovative financing models converge with the burgeoning entrepreneurial spirit of women around the world, we may truly be on the cusp of an exciting new chapter in the history of entrepreneurship - one that promises a more equitable, diverse and impactful entrepreneurial landscape. And while this emerging type of entrepreneurship may appear less dynamic it is more sustainable globally. Furthermore, in the medium and long term, it has what it takes to be a game changer.