How we can improve the framework conditions for female founders in Switzerland
In Switzerland, women are less likely to start an innovative company than men. Researchers at BFH Wirtschaft have investigated the reasons for this in their study. Among other things, entrepreneurial skills are not taught enough in the education system and female role models are often lacking. Social norms and gender-specific prejudices also hinder the founding of a company. The researchers have developed a 5-point plan on how to improve conditions for female entrepreneurs.
The start-up rate of women lags far behind that of men: according to the latest Global Entrepreneurship Monitor Switzerland it is 7.2 %, for women and 12.3 % for men (Baldegger, Gaudart & Wild, 2022). The differences are even greater for innovation- and growth-oriented startups. For example, only just under 7 % of the financing rounds listed in the Swiss Start-up Radar were handled by women-led companies (Kyora & Rockinger, 2020).
So why do startup rates in an innovative country such as Switzerland differ so much between genders? And how can the situation be improved? Authors from the business department conducted a comprehensive empirical study on the framework conditions for women entrepreneurs and revealed five areas with high potential for improvement.
1. Strengthening entrepreneurship in education
The desire to start a business and the confidence in one’s own entrepreneurial skills can be awakened and strengthened by appropriate offerings in schools and universities. Current entrepreneurship education is not sufficient – neither at the primary, secondary nor post-secondary level. In schools, students should have the opportunity to try their hand at entrepreneurship in a protected setting. A playground can be created where students – with appropriate support – can experience what it means to work on their own ideas. By working on one’s own projects and ideas, students can increase self-efficacy. At the same time, education should make sure that not only male founders, but also female founders are shown as examples and role models. Finally, entrepreneurship should have a place in all kinds of study programs – not just in business administration. Entrepreneurship competences are future competences.
2. Enabling women to start businesses in the middle life phase
Funding opportunities often focus on younger people, putting women in the middle phase of life at a disadvantage. However, women often hesitate to start a business at young age and during the family phase. This is partly because financial security is important for many women in this phase of life. But starting a business in the middle phase of life comes with challenges too: access to technology, for example, is more difficult when connections to universities no longer exist. Many things can be done to make it easier for women in the middle phase of their life to start companies: For example, support organizations could broaden their reach to women and men in different ages and networks should be established for women who want to become entrepreneurs in the middle phase of life. In addition, mechanisms that link female founders with a tech education in later stages of life to entrepreneurial ecosystems at universities can (re)connect them to university-focused funding instruments and can help create age-diverse teams.
3. Acknowledging heterogeneity of entrepreneurial endeavors
The media often highlights growth-oriented and time intense startups founded by male entrepreneurs. At the same time, when female founders are presented in the media, they are often portrayed as “power women” so that “normal” women cannot identify with them. However, this portrayal neither corresponds to reality nor does it reflect the existing heterogeneity of founders. Especially for women who often start impact-oriented ventures and move in multiple roles between family, career and/or eventual start-up, this one-sided portrayal can be off-putting. To make entrepreneurship more attractive to women, its heterogeneity should be more prominent in the media. For example, the following points could be given more weight in the media:
- Startups that focus on impact or have a local focus,
- female founders as role models with whom a large proportion of women can identify, and
- forms of organization that make it possible to fulfill several roles simultaneously such as jobsharing.
Connecting “social” with “tech”
The increased emergence of “social entrepreneurship” also represents a broader value system that reflects the values of many women. It can therefore be assumed that a greater emphasis on impact-oriented businesses can help attract more women to entrepreneurship. Greater emphasis on these types of companies could be placed in several areas:
- in media coverage,
- in start-up education programs or even
- in the financial support of initiatives.
A stronger focus on impact-oriented startups in education could help attract more women to STEM fields, as technologies can naturally be used to create social value and scale social entrepreneurial ideas. If more girls and young women could be inspired to pursue STEM fields in early education, this could also have an impact on the orientation of their startup projects.
5. Reducing gender bias and changing traditional norms
The traditional understanding of roles in which mainly mothers are the primary caregivers, the associated socialization and stereotyping, as well as the insufficient institutional care support have made women less likely to want to start a business. Although norms can be changed in the long term rather than the short term, some measures can address implicit gender bias, triggering a self-reinforcing effect that encourages more women to start up in the long term. Gender-balanced committees in funding and investment programs or gender-blind award procedures could increase the pool of female founders. These in turn could serve as role models for other women and potential female founders. More women founders would then lead to a change in cultural perception in which female founders are considered “normal.” Alternative forms of financing for women, such as crowdfunding, can also contribute to reduce the gender gap.
But do we really need more female founders?
Yes, we do. And here are four reasons why we need to improve the framework conditions for women to become entrepreneurs.
- More diversity in young ventures: Entrepreneurship could become more diverse with more women participating. There would perhaps be more alternatives to the strongly growth-oriented and monetarily motivated startup endeavors, which often require a high time commitment that can hardly be reconciled with a family. Such diversity includes diverse strategic goals, such as local impact and sustainability, and flexible organizational models that make startups manageable in terms of time.
- More products focusing on women’s needs: It can also be assumed that women will place a greater focus on products and services that require customization to the needs of women as it is the case with medical drugs. Women founders may be more sensitive to products that should be tailored to women’s needs and could help ensure that innovations address the needs of more diverse customers groups.
- Demographic change, labor market participation and shortage of skilled labor force: Switzerland’s population is aging rapidly and birth rates are falling, we will be confronted with a real shortage of skilled labor. Our economy cannot do without the input of qualified women, the economic loss would be enormous.
- Transformation towards a more sustainable economy: Many female founders want to have a positive impact on society by starting a business. Increasing the proportion of women founders could therefore play an important role in transforming the economy toward greater sustainability.
About the project
The project was carried out in cooperation with the Global Entrepreneurship Monitor Team Switzerland of the Fribourg School of Economics (HSW-FR).
The communication partner is the FE+MALE think tank. FE+MALE is a non-profit think tank that seeks ways for society to promote start-ups by women.
The full study can be found here: 220519_RZ01_Women_Enterpreneurship_Report