As women strive for gender diversity in the workplace more are leaving the corporate world to launch their own ventures — offering flexibility and control over earnings.
More than 9 million women-owned businesses operated in the US in 2014, up from 8.6 million on the year before, according to a report commissioned by American Express. But these ventures account for just 28.7% of all businesses in the US, according to the latest Census Bureau statistics.
Yet as companies struggle to increase gender diversity businesses are losing female talent to entrepreneurship, according to research by Catalyst, a non-profit women’s advocacy group.
“This may explain the increase in women leaving the corporate market to enter self-employment, providing greater flexibility and control over their earning power,” she says.
A lack of role models at the top is widely believed to be a problem in closing the gender gap. “We need more women role models in business,” says Dr Dianne Bevelander, director of the Erasmus Centre for Women and Organisations at Rotterdam School of Management, who can motivate and inspire others.
Yet companies have invested heavily in increasing their numbers of female senior managers.
“There’s a lot of progress that has been made and companies are trying in their policies to make those that are supportive of women,” says Elissa Ellis-Sangster, executive director at Forté Foundation, an organization which promotes women’s business careers.
Nathalie Walker, external affairs director at Cambridge Judge Business School, argues that professional networks have proved valuable in the fight for gender parity.
“Finding people to provide support, guidance and a challenge is almost always going to prove beneficial, and is likely at times to help people progress in their careers,” she says.
Dr Muhammad Azam Roomi, senior lecturer in entrepreneurship at Cranfield School of Management, says women’s networks act as a source of referrals and marketing for entrepreneurs.
“These networks help them in finding customers and act as an excellent word of mouth promotional strategy, saving advertisement costs,” he says.
Business schools have produced start-up successes founded by female graduates. Marketing firm Wildfire, founded by a Harvard Business School MBA, was acquired by Google in 2012 for $300 million; Rent the Runway, a dress rental service founded by two Harvard MBAs, was valued at $220 million last year.
But access to venture capital for female entrepreneurs remains a hurdle. Just 2.7% of all the venture capital finance raised in the US between 2011 and 2013 went to companies led by women, according to a study by Babson College, a US business school that specialises in entrepreneurial training.
Bill Aulet, managing director of the Martin Trust Center for MIT Entrepreneurship, says: “A lack of finance holds back entrepreneurs from scaling companies.”
Business schools are cited as key to improving gender diversity in business. “Business schools have a tremendous opportunity to educate all students about the challenges we face and the value of gender diversity,” says Anna Beninger, director of research at Catalyst.
But as the top jobs remain seemingly out of reach for many women, a greater portion are instead turning to entrepreneurship. The AIGAC survey found that the number of female business school applicants wanting to launch start-ups is on a par with men, with the male figure falling from about 23% to 18% year-on-year.
Entrepreneurship is in IE’s DNA and Isabelle has carried that mentality since she graduated a decade ago. “I have to admit that since graduation, I have always wanted to start up a business,” she says.