Almost 17% of women intend to become entrepreneurs. Despite having fewer opportunities to close business and secure venture capital, female entrepreneurship continues to grow, especially in emerging economies. In fact, one out of every three people with high growth, who have the greatest impact and are climbing the career ladder, are women.
Sisal or henequen is the fiber of the agave, the plant from which tequila or mezcal is made. It is typical of the Yucatan Peninsula, in Mexico. Almost 200 years ago, it was exported as a tough material for the textile industry, especially for the manufacture of sacks and ropes for boats. With the invention of plastic, this fibre became unprofitable. Now, in the midst of the energy transition, henequen is being used as a natural substitute for plastic fibres.
Twenty years ago, Angela Damman, an American woman, fell in love with one of these henequen farms that dotted the surrounding areas of Mérida, the capital of the state of Yucatán. She left everything and went to live there with her family. Years went by and Angela learned about the textile tradition, finding meaning in her new home. Today, together with local artisans, she designs and manufactures high-quality furniture, accessories and textile supplements with henequen, which are exhibited at designer fairs around the world. The case of Angela and her business project with a social impact and native inspiration is just an example of the female entrepreneurship drive in Latin America and the Caribbean, one of the regions where women's entrepreneurship is growing the most, according to the Global Entrepreneurship Monitor 2023/24 (GEM). In her radiography of the entrepreneurial ecosystem, GEM considers emerging economies to be the epicenter of female entrepreneurship.
This study has data from 45 countries across five continents and shows that women are actively involved in high-potential entrepreneurship projects, which have the capacity to grow quickly, scale to new markets and generate a significant impact. In fact, one out of every three high-growth entrepreneurs are women and almost two out of every five emerging companies focused on exports are headed by women. “Countries such as China, Colombia, Iran, Lithuania, the Netherlands and Venezuela recorded particularly high rates of women who are bringing new innovations to the market,” the report explains, referring to data collected in 2023, the latest data collected by this international observatory.
New businesses and fear of failure
In 2023, 1 in 6 women intended to become entrepreneurs (almost 17%), compared to 1 in 5 men. And 1 out of 10 women started a new business. However, the challenges have not disappeared. On average, “women are 21% less likely to close a business than men. And such rates are higher in low-income countries.” Countries with the highest closing rates in relation to new female-led businesses were Poland, South Africa, China and Canada. Another challenge faced by female entrepreneurs is fear of failure, which has also increased in more than half of cases, according to GEM 2023/24.
Women of all ages start businesses following a pattern similar to that of men. According to GEM data, 45% of women and men who start businesses are between 18 and 35 years old, 44% between 35 and 54 years old, and about 10% between 55 and 64 years old. “This age trend was significantly more prevalent in high-income countries where gender parity was common. In low-income countries, women entrepreneurs tend to be younger, with more than 50% under the age of 35.”
By industry, almost half of women entrepreneurs are active in wholesale and retail businesses, manufacturing and in social areas, and less in the technology sectors, which are, on the other hand, where a large part of the venture capital investment is located.
The challenge of investment
Investment is one of the biggest difficulties faced by women. As the European Investment Bank acknowledges, female entrepreneurs in the EU attract a small proportion of the risk capital—in 2021, it barely reached 1%. In the USA, it reached 2%. Globally, most venture capital investment goes to technology-related sectors, where women are underrepresented. The bank is committed, among other measures, to increasing the number of women managing these venture capital funds; “Investing with a gender perspective, creating specific financial instruments and funds to support women's entrepreneurship”; helping women find these funds and opt for sectors such as science, technology, engineering and mathematics, called STEM.
The experts at Global Entrepreneurship Monitor add that, in addition to expanding access to capital for women entrepreneurs so that “more women invest in businesses aligned with the type of world they want to build,” it is important to design training programs for women entrepreneurs in traditionally male-dominated sectors. And giving visibility to success cases.
Case studies
One of many examples of success with social impact is in Zurich. Since 2015, Social Fabric, a sewing workshop founded by molecular biologist Heather Kirk, born in Canada, has been used as a community of inclusion and integration for refugees from more than 30 nationalities who are processing their asylum application. Social Fabric manufactures customised textiles for companies, non-profit organisations and small brands that share the values of inclusion and sustainability (use of sustainable fabrics and recycling technologies).
The GEM also highlights the case of the Moroccan Aya Laraki, founder of the startup Cuimer, a company that transforms discarded fish skins into high-quality marine leather, a more sustainable alternative in the fashion sector to the use of exotic animals. Since 2016, it has recycled more than 40 tonnes of fish skins, which Laraki and his workers have transformed into leather items and accessories, thus redefining circular fashion.