By Daniel Hunter
The number of female business owners in Asia is still trailing levels seen amongst their male counterparts and below the global average, according to a new research report from Barclays Wealth & Investment Management.
This is despite Asia having a higher proportion of entrepreneurs (47%) compared to the US (29%) and Europe (30%). The report suggests that with better opportunities and greater access to information and funding, aspiring female entrepreneurs can achieve business success and increase their personal wealth, having a positive impact on the economy as a whole.
This new report, entitled Unlocking the Female Economy: The Path to Entrepreneurial Success, finds that 39% of high net worth (HNW) women in Asia classify themselves as business owners; far below the 50% of high net worth men in Asia who describe themselves in this way. Globally, 44% of HNW women and 49% of HNW men classify themselves as business owners.
The report also shows that the gender pay gap is wider for non-entrepreneurs compared to entrepreneurs. Non-entrepreneur women (£259,420) earn significantly more than non-entrepreneur men (£233,390), while male entrepreneurs (£264,828) make slightly more than their female counterparts (£260,227) .
This bucks the global trend, where the gender pay gap is reversed among entrepreneurs. Amongst high net worth female entrepreneurs, the average annual income stands at £382,000 — whilst male entrepreneurs earn 14% less, with an annual income of £327,000. In contrast, the average income of a high net worth woman who does not own her own business is £217,000 - 21% lower than the corresponding average male income of £273,000.
The report also examines the behavioural traits of male and female business owners and canvasses insight from a distinguished panel of business experts, in order to understand how to provide better support to aspiring as well as established female entrepeneurs. Based in part on a global survey of more than 2,000 high net worth individuals, it comes at a time when entrepreneurs are increasingly being seen as playing a crucial role in the development of economies across the world. In Asia, 500 respondents were surveyed, of which over 200 respondents were entrepreneurs.
Dr. Peter Brooks, behavioural finance specialist, Barclays, says: “This report sheds light on a very integral, yet often overlooked group: female entrepreneurs. By looking at the current levels of entrepreneurialism, and identifying the distinct behavioural traits of male and female business owners, we can identify what needs to be done to best support the current and future generations of entrepreneurs. Women and the female economy are vital to economic growth, and it is therefore important to encourage an environment which supports women on their entrepreneurial journey.”
The report also identifies fundamental differences in the attitudes of male and female entrepreneurs when it comes to failure and risk. As many entrepreneurs know, failure can be a valuable and often vital learning tool in setting up a new venture. However, the Barclays research shows that female business owners tend to value past failures less than their male counterparts. Whilst 70% of male business owners agree that past failure in entrepreneurial endeavours increases the chances that a new business will succeed, this figure falls to 65% for female business owners.
This inability to see the value in failure, or the lessons it brings, may be hindering burgeoning female entrepreneurs, according to the report’s expert panel, who credited failure as being an important source of information, helping entrepreneurs to refine their vision, address shortcomings and increase the overall strength of their business.
A higher proportion of entrepreneurs in Asia however value the role of failure in contributing to future success more than their global counterparts. Only 60% of male entrepreneurs and 51% of female entrepreneurs agree that past failure in entrepreneurial endeavours increases their chances of success in a new business. Brooks says: “In Asia, the business cycles tend to be shorter and most entrepreneurs may have experienced some form of failure in their businesses. They would therefore have had the opportunity to learn from their past failures and apply these lessons to their new ventures”.
Men and women also have very different attitudes to risk-taking, the research reveals. When it comes to taking risks in their investments, high net worth women are less likely than their male counterparts to choose high risk, high return investments or describe themselves as financial risk takers, which carries important implications in an entrepreneurial context. Whilst the more cautious approach favoured by the majority of women may minimise the danger of excessive risk-taking and over-committing resources, it can also mean female business owners may miss opportunities or lose out to competitors who are more willing to take a leap of faith.
Brooks comments: “In any setting, and especially in an entrepreneurial one, the propensity for risk-taking is going to be helpful at times and harmful in others. Whilst it is natural for men and women to have different perspectives in decision making, it is important to be aware of your own propensity for risk and surround yourself with people who have different attitudes towards it. It’s not a matter of having male opinions and female opinions; it is a matter of increasing the likelihood of having diverse opinions feed into decisions in order to secure the best outcome.”
Unlocking the Female Economy: The Path to Entrepreneurial Success also explores the ‘toolkit’ that needs to be developed in order to better support women at various stages in their entrepreneurial journey. Access to information, finance and networking opportunities are outlined as key tools required to increase the chances of success, with budding female entrepreneurs urged to explore a wider net of new and innovative funding methods, such as angel investors and crowdfunding, as well as taking advantage of networks and business mentors.
Brooks concludes: “The failure to provide the necessary tools, information and support to female entrepreneurs means that thousands of great business ideas may never become a reality. At a time when many countries face the prospect of slow growth for years to come, there is a desperate need for inventive new business ideas to kick-start economic growth. There is a real opportunity for women in particular to contribute to the economy, but it is clear that work still needs to be done to bolster the necessary toolkit for success.”
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