“It’s neither fair nor economically wise” – a podcast episode about the situation of female founders in Switzerland
For every 10 men who start a business, there are only 6 women. In the 8th episode of our podcast, we talk about the reasons for this and how this situation can be improved with Susan Müller and Jan Keim, two researchers from the Institute Innovation & Strategic Entrepreneurship at BFH Wirtschaft.
Click here for the podcast and see a short version of the conversation.
There are some gaps, also called “gaps”, between men and women in professional and everyday life: The gender pension gap, gender pay gap – is there also the start-up gap, Susan?
SUSAN MÜLLER: That is indeed the case. So we know that significantly more men than women start up. That is the case in most countries. And also in Switzerland. The last Global Entrepreneurship Monitor that came out showed that there are only 6 female founders for every 10 male founders. We think that there are always individual reasons why someone does or does not start a business. But there are also the founding-relevant framework conditions that can be improved in Switzerland and hopefully also increase the number of female founders. This is what we investigated in our study.
What exactly did you look at in your study?
SUSAN MÜLLER: We looked at the general conditions that are relevant for women to start a business. These are surveyed every year by a team from the University of Applied Sciences in Fribourg as part of the Global Entrepreneurship Monitor, which I just mentioned. And they investigate: What financing options are there? What about education in the area of entrepreneurial skills? What about cultural and social norms? And we were interested in how these framework conditions affect women in particular We asked experts about this.
Which framework conditions stood out to you in particular?
JAN KEIM: A central aspect is education, or how entrepreneurship is presented in primary, secondary, but also vocational and higher education classes. Often the role models are male and much less often female. And when women are portrayed, they are often “power women”. So those who nevertheless focus on strong growth or technology. Moreover, hardly any women or men are shown who start businesses that perhaps have more of a local impact or solve very specific problems. SMEs are shown less often than start-ups with venture capital investors. Education and role models are important levers to encourage more girls and women to start their own businesses. At the moment, only a few can identify with this.
So do you recommend teaching children how to start a business from primary school onwards?
SUSAN MÜLLER: Entrepreneurial skills should be taught very early on. And also in primary school. Entrepreneurial skills are not just about everyone starting businesses, it goes far beyond that. With a business, people can help shape the economy and society. Entrepreneurial skills are, for example, being able to formulate an idea, to share it with others, to get others on board to participate and provide their resources, to communicate well, to analyse and solve problems, to think critically and also to assess the consequences of what they do. All this can be used to start a business, but it is also needed when launching an initiative in the community. In other words, when we teach entrepreneurial skills, it is not only focused on starting a business. Schools can do it in a playful way, children work on their own projects and take personal responsibility. What we really need to train is proactivity.
In the study, you also investigated that women start very different businesses than men. Can you tell us more about that?
JAN KEIM: Exactly. Various scientific studies show that women tend to found companies that, in addition to being profit-oriented, also focus more on impact. That is, on some kind of social or environmental impact to solve big problems, climate change or poverty. Women tend to do that more than men. If we get more women to start businesses, the potential is there to actually solve the big social challenges. But we have to use the potential of women founders.
What about financing for this type of company?
SUSAN MÜLLER: Basically, Switzerland is a very good environment for founding companies and also for getting financing. At the same time, for one thing, investors are still mostly men. This causes a gender bias, as some studies show. And secondly, the financing instruments are mainly aimed at growth and technology orientation and not at companies with an impact. We need a variety of start-up and financing instruments that also cover the diversity of start-up motives.
In addition, we as a society have major global tasks ahead of us. We can no longer afford to focus only on profit and growth. What possibilities are there to change the financing instruments? JAN KEIM: There are studies that show that although women, for example, get different questions when they pitch to venture capital investors, they tend to have more advantages in crowdfunding, for example. Apparently, women are seen as more trustworthy by small investors. So there are funding models that take into account how change is driven in society, in addition to profit orientation and growth potential. I think it’s not so much a matter of throwing whole financing models out the window, but of systematically improving them.
Now, critical voices might say that it doesn’t really matter whether men or women start a business, that the main thing is that there is innovation in Switzerland. What do you say to them?
SUSAN MÜLLER: Of course, this argument can be made for all professions. But the Swiss economy can no longer afford to neglect the perspectives and creative power of women, regardless of their profession. For the transformation to a more sustainable economy, we need everyone, because it’s about the services and products of tomorrow. Both perspectives have to be incorporated. Studies show that when product designers are mainly men, medical products, for example, are also tailored to men.
JAN KEIM: I would like to add something. Innovations that are run by women or founded by women are different from those of men. They tend to be innovations that are also tailored to women’s needs. And I agree with Susan: we cannot afford as a society not to use the potential of women. It is not fair, nor does it make rational or economic sense. We need to teach more entrepreneurial skills and encourage women to start businesses, especially through role models. It is not only about founding and innovating, but also how and for what. For this, we absolutely need both genders to cover the range of needs of all people. This is a shortened version, you can hear the whole conversation in the podcast.
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