Why Female Entrepreneurs Are the Key to Boosting Global Workforce Participation for Women

The contributions of women to global economies are a powerful yet underutilized engine for growth. Despite their proven potential, women own only 18% of businesses globally, according to the World Bank’s survey of 138 countries. This gap represents a missed opportunity—and a challenge—that, if addressed, could transform the global economic landscape. Female entrepreneurship holds the key to creating inclusive growth, driving innovation, and fundamentally reshaping workforce participation for women worldwide.

The Gender Gap: A Challenge and an Opportunity

Women currently contribute only 37% of global GDP, far behind their male counterparts. This disparity is not merely a challenge but also a massive opportunity. Female-led businesses have demonstrated their ability to drive inclusive economic growth by creating work environments that support and promote other women. Research shows that businesses led by women employ a significantly higher proportion of women compared to male-led organizations.

This trend holds true across countries with varying levels of gender equality. For instance, nations like Canada and the Nordic countries provide robust support systems, such as subsidized childcare and paid family leave, which encourage women to pursue entrepreneurship. These measures create ripple effects, enabling female entrepreneurs to offer similar support structures within their businesses.

Entrepreneurship as an Economic Catalyst

Promoting female entrepreneurship can be a game-changer for economies. A study by economists Gaurav Chiplunkar and Pinelopi Goldberg highlights the barriers women face globally, including limited funding, restricted market access, and societal expectations to prioritize household responsibilities. Removing these obstacles could significantly increase GDP and workforce participation.

For example:

• India: Increasing female workforce participation could push GDP growth to 8%.

• Brazil: Women already represent 34% of business owners, and further promotion of female entrepreneurship could amplify economic gains.

By addressing these barriers, countries can unlock a wealth of untapped potential, spurring national and global economic growth.

The Performance Advantage of Women-Led Businesses

Contrary to persistent biases, evidence suggests that women-led businesses often outperform their male-led counterparts. According to a study by BCG, women-led startups, despite receiving less venture capital, generate higher revenues and deliver better returns on investment. In the U.S. alone, women-owned businesses contribute nearly $3 trillion to the economy and are growing at more than twice the rate of other businesses.

This performance advantage can be attributed to several factors:

• Collaboration and Resilience: Women excel in fostering teamwork and navigating challenges, ensuring sustainable business growth.

• Purpose-Driven Leadership: Female entrepreneurs often prioritize social impact, creating businesses that benefit their communities and employees.

These qualities make female-led ventures not only successful but also vital to achieving a more inclusive global economy.

Breaking Down Barriers to Funding

Despite their proven success, women entrepreneurs face significant hurdles in securing funding. Globally, over 90% of venture capital goes to male-led startups. Implicit biases often undervalue women’s potential, forcing female founders to meet higher standards to access capital.

Some nations are taking proactive steps to address this imbalance:

• United Arab Emirates: Initiatives connect female entrepreneurs with investors and mentors.

• Germany: Women-only grants in STEM fields aim to boost representation in traditionally male-dominated industries.

These programs serve as models for other regions, demonstrating how targeted support can close funding gaps and accelerate the growth of women-led businesses.

Policies to Promote Female Entrepreneurship

Governments worldwide can play a crucial role in fostering female entrepreneurship by implementing policies that address systemic barriers. Effective measures include:

• Subsidizing childcare to ease domestic burdens.

• Improving transport safety to facilitate mobility.

• Expanding access to microfinancing for small and medium-sized enterprises.

Emerging economies across Africa and Asia are already leveraging these strategies, creating blueprints for other nations to follow.

The Investor’s Role: Prioritizing Female-Led Startups

For investors, the message is clear: female-led startups are not just profitable—they’re a largely untapped opportunity. Investing in women entrepreneurs can drive higher returns while increasing diversity in the entrepreneurial ecosystem. This shift isn’t just a financial imperative—it’s a chance to contribute to meaningful economic and social progress.

The Future is Female—and Inclusive

Empowering women entrepreneurs is not just a moral imperative—it’s an economic necessity. By reducing barriers, providing better funding access, and implementing supportive policies, we can unlock the immense potential of female-owned businesses. This transformation will not only boost global GDP but also pave the way for a more inclusive, innovative, and equitable world.

The time to act is now. Let’s support female entrepreneurs and build economies that reflect the talents and ambitions of all.