Why are Women Opening Fewer Businesses in 2014?

New data from the Kauffman Foundation tells us that in 2014, only 36.8% of new businesses were opened by women. This figure is down from 40.7% over the last 19 years and has nearly reached the low point of 36.7% that was reached in 2007. And it’s almost the second lowest figure in two decades.

In short, what we can take from this is that fewer women seem to be launching their own startups. That much is clear but the question is why?

Of course, as with any of these things there are multiple factors at play.

One aspect is that it may not just be that there are fewer women starting businesses but also that there are more men – throwing off the percentage. This would make sense in light of the recent construction rebound, which is a somewhat male dominated industry.

In other words, with more men starting up construction businesses, it may simply be the case that there are comparatively fewer women.

But despite this being the case, it’s still likely that female led businesses have declined and that this has contributed to the data. Analysts suggest that ‘economic factors’ may be at play and specifically, these are likely to include such things as the economy that has been struggling for some time. This makes it more difficult for everyone to open new businesses.

This has been a factor for the last several years though and in fact the economy is somewhat improved in the last year. Lending is also up… so perhaps that doesn’t offer the answer.

In general, it is often harder for women trying to start a business according to fashion designer and entrepreneur Lela Rose. Talking to Fox News, her explanation is that with many lenders still being predominantly male-run, some gender stereotyping still play a role. This may make it harder for women to get loans or investment capital for instance.

Historically and culturally, women have long been viewed as primary care givers rather than bread winners. When finances are stretched for a household, the expectation is still very often on the woman to take care of the children and relieve the cost of hiring a nanny.

It’s worth noting that for these reasons, men have consistently higher employment rates than women above the age of 22. That is to say that the proportion of men in work is higher than the proportion of women – so it would make sense that there might be a similar representation for start-ups.

But perhaps more simply it just comes down to a lack of encouragement. Perhaps there are a lack of role models for women looking to start their own businesses. Perhaps they aren’t pushed enough at school to develop an interest in business versus male students.

Whatever the case, it seems that we need to start investment more time, money and effort into teaching young women about business start-ups and highlighting this as a viable option on their curriculum.

After all, in the age of the internet there has never been a better time to start your own company!


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