The role of women in the workforce has always looked different across various cultures and historical periods. Nowadays, it appears the roles of women in the workplace are changing once again. This time, we’re seeing women leaving the corporate world at striking rates, leading to the subsequent rise of female entrepreneurship.
Women filling leader roles and engaging in entrepreneurship is incredibly important for the economy. Women help create new jobs, encourage workplace diversity, fight for equality in the workplace, and so much more that leads to the advancement of our working world.
There are many different reasons why women are increasingly choosing entrepreneurship over the corporate world. In this guide, we’re diving deep into the top industry trends driving female entrepreneurship.
Female entrepreneurship historical trends
Female entrepreneurs have been around since biblical times across infinite ancient cultures. But in our modern society, women-owned businesses only really began to skyrocket in the early 2000s.
During World War II, while many men were enlisted in military service, the amount of women entering the workforce grew by 10%. Female entrepreneurs also flourished during this time.
The next pivot happened when The Women’s Business Ownership Act of 1988 was signed into law. This legislation eliminated outdated policies that prevented women from running their businesses autonomously. It also opened the floodgates for female entrepreneurial opportunities and drew attention to the importance of gender equality in the workplace.
The early 2000s saw another hallmark of rising female entrepreneurship. Minority and women-owned businesses played a critical role in creating jobs and stabilizing the economy following the Great Recession of 2009.
According to research by Cornerstone Capital Group, they collectively added 1.8 million jobs between 2007 to 2012. This figure is significant, considering businesses owned by white males closed down 800,000 jobs, and 1.6 million employees who worked for companies owned equally by white men and women lost their jobs over the same timeframe.
Female entrepreneurship is currently at its highest level in modern history. Between 2014 and 2019, the number of female-owned companies grew by 3.9% annually, while all other businesses only grew by 1.7% per year.
In 2019 alone, female-owned businesses generated $1.9 trillion in revenue for the U.S. economy. Even though 2020 was a rough year for female-owned businesses and the global economy at large, we’re already beginning to see female entrepreneurs bounce back with record enthusiasm.
Female entrepreneurship statistics
It’s no secret that female entrepreneurship is on the rise across major sectors worldwide. However, there are some industries where female business owners are soaring.
- Education: According to research by Crunchbase, only 17% of tech startups had a female founder in 2017. Meanwhile, estimates suggest 30% percent of all EdTech entrepreneurs are women.
- Health, Beauty, and Fitness Services: Approximately 19% of all women-owned businesses operate within the health, beauty, and fitness services sector.
- Food and Restaurants: About 14% of all women-owned businesses are food-related if not full-on restaurants.
- Retail: Of all retail business owners, 47% are women.
- Business Services: Professional, technical, and business services constitute a high-wage sector of the economy. Think legal services, accounting, architecture, research, development, information technology services, and more. Female entrepreneurs make up about 36% of all business owners in this space.
6 reasons female entrepreneurship is soaring
In the past 20 years, the number of self-employed women increased by 114%. Wondering what’s behind the surge? Here are the top 6 reasons female entrepreneurship is booming.
1. Freedom to pursue your passion
Achieving career goals is incredibly important to women. Nowadays, career goals are less centered around the corporate ladder, with a greater focus on living a purpose-driven life. This trend is pronounced with women as well. Twenty percent of female entrepreneurs find the desire to follow their own passions as the biggest motivating factor behind starting their own businesses.
2. Dissatisfaction with corporate America
Women have been trying to break the glass ceiling in corporate America for years. However, it seems some women are abandoning this goal altogether in favor of becoming their own boss.
Between long hours, bureaucracy, toxic work cultures, a lack of schedule flexibility, and no meaningful connection to their work, corporate jobs aren’t exactly the most fulfilling. That rings true for 13% of female business owners, all of whom reported dissatisfaction with corporate America as a starting point for becoming an entrepreneur.
3. Flexible work arrangements
Being an entrepreneur has its perks, from greater career autonomy and constant growth to the ability to make an impact and so on. Entrepreneurs are also able to set their own hours and enjoy a flexible work arrangement.
As it turns out, this is extremely important for women, who oftentimes find it challenging to balance work and familial responsibilities. Research suggests that the majority of the gender wage gap arises from what’s known as the motherhood penalty.
Women and mothers especially are quick to jump on work opportunities that promise flexibility. Unfortunately, it just so happens that many flexible work arrangements don’t pay as high as traditional jobs, though entrepreneurship is generally an exception.
4. Greater earning potential
If you work a corporate job, your salary is essentially capped at a certain point. Sure, you can negotiate a raise, but depending on your position, expertise, and company, your earnings won’t exceed a set threshold. Entrepreneurs, on the other hand, can enjoy unlimited earnings potential.
There’s always the element of risk associated with entrepreneurship, and not all endeavors will pay off. However, there is strong evidence to suggest that overall, entrepreneurs earn more than traditional employees.
5. More autonomy
If the COVID-19 pandemic has shown us anything about the modern workplace, it’s that traditional jobs aren’t as stable as they once appeared. All it takes is one economic recession to spur a wave of layoffs. There’s also the risk of corporate restructuring or buyouts. As a result, many people, especially women, feel they have more control over their careers when they are their own bosses.
6. Opportunities you can’t turn down
Working, educated women often benefit from a large social network filled with like-minded individuals. Together, they’re bound to come up with great ideas and create exciting opportunities to further grow their businesses.
Thirteen percent of all female entrepreneurs began their entrepreneurial journey as a result of an opportunity that they took advantage of, but the best part? Many female entrepreneurs that become successful start mentoring women and creating new job opportunities for other women.
Banking for female entrepreneurs
At MoneyLion, we’re proud to say that 50% of our members are women. We believe women play a critical—yet all-too-often overlooked—role in our economy, especially when it comes to building household wealth.
We’re pleased that women are using our products, like mobile banking accounts, financial management tools, credit builder opportunities, cash advances, auto-investing features, and so much more as ways of empowering themselves financially. Explore MoneyLion banking products and follow the Women Who Roar YouTube channel for more financial advice!