How easy is it to start a new venture? The graph shows how
people answer this question across many European countries. To the right, there
is a surprise for those who listen to Fox News, because the Scandinavian
countries (all of them supposedly socialist and anti-business) are where people
believe businesses are easiest to start. From left to right, there is a big
non-surprise for those who study entrepreneurship, because in all nations shown
here, men consider it easier to start ventures than women do. Indeed, the graph
is disappointing for those who think that Scandinavian gender equality extends
to entrepreneurship, because it clearly does not. More on that in a moment,
because this finding makes more sense after looking at some recent research.
The graph is from a recent article in Administrative Science Quarterly by Vartuhi Tonoyan, Robert Strohmeyer, and Jennifer E. Jennings, who have investigated the source of gender differences
in the ease of entrepreneurship. Their idea is simple and powerful: because
entrepreneurship starts with experience in the labor force, different treatment
of men and women in the workplace is the origin of their different sense of how
easy it is to form a venture, and also of their success in forming and growing
new ventures.
We know from research on
the labor market that the following are true: 1) women are less likely to be
promoted into management positions, 2) women are concentrated in certain occupations
with less pay and independence than typically male occupations, and 3) women
are concentrated in certain industries that are less connected to the market
economy than typically male industries. These patterns hold across levels of
worker education and job prestige. The plumbing contractor is more likely to be
male. The municipal administrator (especially at the bottom level) is more
likely to be female.
These labor market patterns
form beliefs about entrepreneurship because our experiences at work help prepare
us for entrepreneurship—or don’t. There is a distinction between a manager and
an entrepreneur, but the distinction is smaller than that between a low-level
worker and an entrepreneur. Managers (many of them, at least) and entrepreneurs
obtain and allocate resources, formulate goals and pursue them, hire employees,
define their roles, and evaluate their work. Having experience as a manager gives
people confidence in their ability to start a venture, as well as a useful
comparison point: management can be just as stressful and time-consuming as
entrepreneurship but in support of someone else’s venture, not your own.
Stereotypes about what
women can and should do have held them back from such management roles, as well
as from certain parts of the labor market. Many women have been directed into
typically female roles – caring and serving roles – and positions supervised by
others, usually men. This has led to a list of occupations and jobs in which
workers accumulate less experience relevant to entrepreneurship. For example, even
though restaurants are famously easy ventures to found (and usually quick to
fail), I have met only one restaurant owner who started as a waiter, and he was
a man. And women are heavily weighted in certain industries, like public
administration, which are remote from the markets in which entrepreneurs form
new ventures.
So it is hard for women
to escape discrimination in the workplace by pursuing entrepreneurship. They
are found in exactly those roles and workplaces with the hardest paths to
entrepreneurship, so they are disadvantaged in both games. No wonder women have
to do more than men to succeed.
Oh, and the Scandinavian
gender equality I mentioned at the start? Scandinavian nations are relatively
good at avoiding underpayment in stereotypically female industries like public
administration, and in stereotypically female occupations too. But that does
not mean that people think differently in those nations than they do elsewhere
in Europe. So in the absence of strong economic reasons to go against the flow,
men and women have done more gender sorting in the Scandinavian labor market
than in many other nations. As one would expect, the result is that
Scandinavian women find it much harder to start a venture than men do, though
still easier than a man in France or Germany.
