The EIB published a report on female entrepreneurship in Europe, including recommendations for the European institutions.
The European Investment Bank (EIB) published a report on female entrepreneurship in Europe. The report firstly points out that female entrepreneurs remain underrepresented and that female-founded start-ups are underfunded. Secondly, it highlights recommendations on potential actions for how to tackle these problems.
The report demonstrates that in the European Union only 2% of investments in start-ups go to women-led companies, even though 38% of start-up founders are women. According to the EIB, this lack of investment stems, firstly, from a persistent bias against female entrepreneurs, which makes it more difficult for them to get access to funding. Secondly, female entrepreneurs tend to “bootstrap” and get their funding rather from their families or their own resources than external partners. Thirdly, as the report points out, the sectors in which female-founded start-ups tend to be more active, are less capital intensive than other sectors dominated by their male peers. This is because women more often pursue social enterprises or service areas perceived as less capital intensive, and potentially with a lower risk–return profile, which has historically corresponded to lower investment.
The European Commission (EC) has recognised that diversity is a key driver of innovation and growth in our society and put in place a GenderSmart Investing programme in 2019. European innovation programmes all incorporate elements designed to foster female entrepreneurship and investment in female-founded and –led start-ups. Both the European Innovation Council (EIC) and the European Institute for Innovation and Technology (EIT) strive to increase female representation in their programmes. The EIC Accelerator, for instance, aims to achieve an annual target of 35 percent of women-led start-ups to be funded. In the first call of 2021, roughly 25 one in five successful companies had female CEOs (see SwissCore article). Furthermore, the Business Accelerator Services include specific services for female founders to help them overcome the additional hurdles they face. The EU Prize for Women Innovators makes women entrepreneurs behind game-changing innovations visible and raises awareness for the need for more female innovators. This year’s winners were announced during the EIC Summit at the end of November 2021.
Similarly, the EIT also acknowledges the need to increase the participation of women in innovation. According to the EIT Gender mainstreaming Policy, the EIT’s Governing Board are obliged to not only ensure that its partners cover a wide geographical area but also that the participation of women in those areas is fostered. It seeks to pay attention to gender balance, especially in innovation-relevant skills where women remain underrepresented, such as information and communication technologies, science, technology, engineering and mathematics. As of now, four EIT Knowledge and Innovation Communities (KICs) are involved in the Girls Go Circular programme in order to address the skills gap in Science, technology, engineering, and mathematics (STEM). The Girls Go Circular programme is at the intersection of education and innovation and challenges stereotypes and increases gender equality. Additionally, EIT Women provides a network for female start-up founders, investors, and mentors. Similar platforms to give female entrepreneurship visibility are WeGate or other networks connecting female entrepreneurs and investors (e.g. the European Network of Female Entrepreneurship Ambassadors of the European Community of Women Business Angels for Women Entrepreneurs).
The report published by the EIB makes some recommendations on potential actions, both financial and policy-related, for further consideration by the European institutions and the wider investor community. These recommendations include recommendations such as introducing a seal of excellence for gender-based investments, exploring innovative financing solutions (e.g. gender bonds), or the systematic monitoring of gender data across EU funding programmes.