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Women in poorer nations twice as likely to become entrepreneurs

Women in the world's poorer nations have a higher rate of entrepreneurial activity than those in wealthier nations, according to a new global study.

In a survey of more than 150,000 entrepreneurs in 40 regions around the world, women in low- and middle-income nations were found to be more than twice as likely to be involved in early-stage business start-ups as those in high-income nations, researchers at Babson College and the London Business School said.

In Russia, women were involved in 39.9 percent of all early-stage entrepreneurial activity, while in the Philippines they were involved in 22.5 percent, the study found. That compares to just 2.3 percent in Sweden and 1 percent in Belgium.

Overall, women drive about a third of the world’s entrepreneurial activity, the study found.

"Early-stage entrepreneurship in women continues to grow globally," Elaine Allen, the study's principal researcher, said in a statement. "While overall women still lag behind men in starting a business, for the first time, we see parity or a higher rate in women in some low- to middle-income countries."

The study also found that women in poorer nations were more likely to be working a second job to support their own venture, suggesting that the social and economic benefits of being active in the workforce are a stronger driver of early-stage entrepreneurship than education or household income combined, researchers said.

Where women entrepreneurs in wealthier nations benefited from education and income, those in poorer nations fell back on work experience as a foundation for starting their own businesses. In the absence of capital and business training, workforce experience offered women in poorer nations access to social capital, networking opportunities, innovative ideas for launching new ventures, and other resources, researchers said.

Yet, while the gender gap between entrepreneurs narrowed in poorer nations, researchers found the chances of early-stage entrepreneurial activity by women developing into an established business was greater in high-income nations.

The difference in success rates may be related to education, researchers said.

As much as 36.5 percent of women entrepreneurs in poorer nations had less than a secondary school education, compared to 28.2 percent in wealthier nations, according to the study.

Reuters -
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