They have a lower participation in the economically active population, which includes those who look for work and have it. A business of your own is the option.
Almost half of nascent and new ventures come from women (46.5%) in Ecuador.
The Global Entrepreneurship Monitor (GEM) Ecuador, whose second edition was published in October 2020 by the Espol Business School (Spain), is the latest look at entrepreneurship in the country.
The study indicates that Ecuador is one of the countries with the highest gender parity in the rate of early entrepreneurial activity (TEA), which includes adults (from 18 to 64 years old) who are about to start a business (nascent) or started one that has not exceeded the 42-month threshold (new).
“But despite the fact that a similar number of men and women undertake, a higher proportion of men would manage to sustain their businesses for more than 42 months”, Indicates the study.
The proportion of women with new businesses was 47.7%, a sustained trend over the years. AND 38% of established businesses are led by women. These are relevant figures today in the International Day of Entrepreneurship.
The results show that there are gender differences and gaps, since women undertake a higher proportion to earn a living due to the lack of employment or due to family tradition. And to a lesser extent to make a difference or accumulate wealth compared to men.
The report notes that gender disparities come from before the decision to undertake. “Both the results of this report, and those of past years, show that men show a greater self-perception of skills to undertake, and less fear of failure as a barrier to starting a business”.
In the period 2008-2019, more men (52.93%) than women (49.99%) perceived opportunities to undertake; Likewise, more men (76.56%) consider that they have the skills to start a business than women (69.68%).
Finally, women (38.54%) showed that fear of failure constitutes a barrier to starting a business in a higher proportion than men (30.91%).
“These results are in the same line as gender gaps observed in other areas, such as quality employment issues and self-perception of entrepreneurial skills,” says the report.
Women’s businesses generally have little innovation
Virginia Lasio, director of GEM Ecuador, says that the country has stood out for years for almost gender parity in terms of early entrepreneurial activity. “What has been consistently observed is the higher proportion of entrepreneurship due to the need of women, greater self-employment is also observed”.
Is it more difficult for a woman to run a business than a man?
A look at the entrepreneurial process from the intention to undertake to achieve a well-established business shows the reduction of female entrepreneurs at each stage, this is a reflection of difficulties of various kinds, from the nature of the entrepreneurship, through capabilities, access to resources, power of your networks, etc. It is not easy to answer the question; Through the GEM we have observed that the closure rate of women in the region is lower than that of men, in Ecuador it has been higher in some years. However, in Ecuador and also at the regional level, the proportion of women who state that fear of failure could become a barrier to entrepreneurship is higher. Regarding financing, even though it is not the main reason for closing businesses, there are more male investors than women, and due to the diversity of preferences, there could be some bias that reduces the number of favored female ventures, even in the platforms of crowdfunding like Kickstarter (which funds creative projects), some studies show. Here in Ecuador the crowfunding is incipient and we do not yet have data on your performance.
Do enterprises led by women have a longer average duration?
In established businesses, those whose existence exceeds 42 months, a regional gap is observed; lower proportion of female owners. In the 2020-2021 period, globally, Latin American women entrepreneurs showed the highest proportion of business closures caused by the pandemic.
How can the State support female entrepreneurship?
I would not know if the State directly; This should improve the environment, entrepreneurship and innovation ecosystem, via comprehensive public policy, etc. It is a complex issue, to which we have always given partial solutions or a band-aid patch. In general, education and skills enhancement are an avenue of support. According to the GEM, women, in general, show the same or very close perception of opportunities to undertake as men, the same intention to do so, however, they feel less competent.
What are the main contributions of female entrepreneurship to the national economy?
It is interesting to note that the number of women entrepreneurs is higher in low-income countries and declines as it increases. Sometimes we do not measure the impact of women’s ventures due to the tendency to compare them with those of men. If we observe the global panorama, we will measure the importance of the contributions of women entrepreneurs in any phase of the entrepreneurial process. The latest study carried out by the Global Entrepreneurship Monitor (GEM) shows that women entrepreneurs represent almost 50% of all entrepreneurs around the world. Women represent around 40% of informal financing for entrepreneurs. They represent about one-third of high-growth entrepreneurs globally. What is left to be gained if women cannot or face barriers to entrepreneurship. Locally, I would believe that the direct impact on the economy is not visualized, due to the nature of the ventures; there is evidence of its impact on the well-being of families. As I mentioned before, not only in Ecuador but also in the region, women’s businesses predominate out of necessity. The latest GEM 2018-2019 report on female entrepreneurship shows that in Latin America they are 40% more likely than male entrepreneurs to start out of necessity. Therefore, its impact is low in terms of job creation, internationalization and innovation. The large proportion of businesses is in trade at retail both in the region and in Ecuador. In the area of information and communication technologies, men’s businesses also predominate. Although the Radar Tech Start Up, published by Buen Trip, is not exhaustive of the businesses in the country, it shows that these technology-based businesses have grown in the last two years; the latest edition shows 38 founders out of a total of 280 start ups.
What do women’s ventures need to make them more permanent and sustainable?
As long as they remain subsistence businesses they will always be vulnerable. However, the pandemic has also brought opportunities for entrepreneurs around ICTs (Information and Communication technologies), and consumers have also changed their habits. These circumstances may provide better opportunities for women as well. In fact, globally and in Latin America and the Caribbean, the 2020-2021 report shows parity between men and women in terms of the opportunities arising from the pandemic.
How innovative are women’s startups?
Little innovative. The GEM report for women 2018-2019 mentions that globally eight countries show particularly low levels of innovation in women’s ventures, with a gap of 50% compared to those of men, among these countries is Ecuador, the others are Bosnia and Herzegovina, Bulgaria , Indonesia and Iran. The 2020-2021 report reports that in middle-income countries, among which Ecuador is located, one in four women offers innovative products; there are also limitations, with the exception of Brazil, for example, in export businesses. (I)
Paul is a talented author and journalist with a passion for entertainment and general news. He currently works as a writer at the 247 News Agency, where he has established herself as a respected voice in the industry.
