Women Entrepreneurs Are Trapped Within Glass Walls

Published on: May 17, 2011

By Lesa Mitchell, Vice President, Ewing Marion Kauffman Foundation

This much is known: The next round of economic recovery and growth in the U.S. will be led by new companies. The statistical evidence on that point is clear. While big, established firms employ the most people, it's the high-growth startups -- the new firms on their way to becoming big -- that create the lion's share of new jobs, and become the anchors for new industries. So it has been through every wave of growth in the country's history, from the days of Thomas Edison and Henry Ford to the IT boom of the late twentieth century.

Now here is the lesser known fact: If we want a real recovery, the next cohort of high-growth entrepreneurs cannot just be people with names like Thomas and Henry, or Bill and Steve. We need the women to get involved. The American growth engine can no longer afford to run on half of its cylinders.

Yes, women are starting plenty of new businesses. However if you look closely at the picture, as we have done at the Kauffman Foundation, where I work, you find a vast amount of potential left on the table. In our demographic data, the overall rate of entrepreneurial activity among women is less than 2/3 the rate for men.

And, as other sources along with Kauffman have found, womens' startups under-perform on key measures of growth. Comparatively, few of them even grow to $1 million per year in revenues. Very few build or hire on the kind of scale that can boost a region's economy, let alone show up on the national radar screen.

Part of the disparity stems from the types of companies many women start, such as local retail shops or professional service firms and consultancies. Serious growth and value creation tend to come from innovative startups in science- and technology-based industries. But this is where the gender gap becomes blindingly apparent.

Can you name one woman founder or co-founder who has taken a tech-based company from inception to true global scale? Several already-big firms, such as Oracle and Xerox, have women as CEOs. Meg Whitman joined eBay when it was growing and led it the rest of the way to the top, which is the closest example I can think of.

For the full post, check out “Women Entrepreneurs Are Trapped Within Glass Walls” on Huffington Post.

About the guest blogger: Lesa Mitchell is a vice president with the Kauffman Foundation. She has been responsible for the Foundation’s frontier work in understanding the policy levers that influence the advancement of innovation from universities into the commercial market and the new relationships between disease philanthropy and for profit companies. Prior to joining Kauffman, Mitchell spent twenty years in global executive roles at Aventis, Quintiles, and Marion Laboratories. Follow her on Twitter at @lesamitchell.