Despite significant progress in women's economic empowerment, challenges persist to this day. The gender pay gap in the European Union stands at 13%, with women earning less per hour than men. Additionally, women face barriers in entrepreneurship and leadership. Efforts to bridge these gaps have shown limited improvement over the past decade.

Supporting female entrepreneurs is crucial, as they contribute to sustainable practices and invest in employee development. Crises, like the recent pandemic, have exacerbated inequalities. Addressing these challenges is essential to achieving gender equality and unlocking the full potential of women in the economy.

In order to overcome the current gender employment inequalities and advance economic growth, research by European Investment Bank, investigates the variables influencing female entrepreneurial activity and emphasizes the need of supporting female entrepreneurs.

Gender gaps persist across different regions, including the European Union and other economies. These disparities not only hinder individual women's opportunities but also impose costs on economies at large. Firms that fail to fully leverage female talent miss out on benefits like improved decision-making and fresh ideas.

More Women on Top is Win-Win for all

Supporting female-led businesses yields positive economic, social, and environmental spillover effects. Female-led firms play a crucial role in narrowing gender employment gaps, promoting inclusive growth, and reducing gender disparities. This pattern is particularly pronounced in Central Asia, Central and Eastern Europe, and holds true across different business types.

Female-led firms tend to employ a higher share of female workers across various sectors. This supports the advancement of women in the labor force and sectors where they are currently underrepresented. Moreover, female-led businesses are more likely to invest in training, contributing to knowledge building and empowerment beyond their own organizations.

Women leaders Facilitate Higher ESG & Innovation

Interestingly, female-led firms also achieve higher environmental, social, and governance (ESG) scores. They exhibit better performance in areas such as gender balance, training opportunities, governance practices, and environmental responsibility. These higher ESG scores indicate the broader benefits generated by female-led businesses, including innovation, support for the green transition, and improved disclosure on emissions and resource management.

When compared to male-led companies, female-led firms demonstrate greater innovation, introducing new products and processes. Contrary to longstanding perceptions, women-led businesses are not less innovative; instead, they contribute positively to innovation outcomes. Gender diversity in the workforce, research and development teams, and boards has been found to enhance firms' innovation performance.

Differences in leadership styles between men and women, with women often adopting transformational leadership traits, foster trust, encourage creativity, and facilitate skill development within organizations. These factors contribute to a conducive environment for innovation.

Basically, women-led enterprises not only provide employment opportunities for more women but also drive innovation and contribute to sustainable practices. Recognizing and supporting the role of female entrepreneurs is crucial for promoting gender equality, inclusive growth, and economic prosperity.

Conclusion

Gender gaps continue to persist in the European Union and across the globe, imposing costs on both women and economies. Not fully leveraging female talent means missing out on benefits such as better decision-making and innovative ideas within firms. However, supporting female-led businesses brings wider economic, social, and environmental advantages. It contributes to reducing poverty risks by increasing female labor force participation. Achieving gender equality requires more than just educational and legal parity; it necessitates creating an enabling environment for women's professional careers and entrepreneurial endeavors.

The COVID-19 pandemic has had a detrimental impact on women, exacerbating existing gender inequalities. To uphold global and EU commitments, intensified efforts are needed to address setbacks and advance gender parity. Creating conditions that allow women-led firms to thrive is vital for narrowing gender employment gaps and unlocking broader socioeconomic benefits.

Removing key obstacles in the business environment, such as sociocultural barriers, biases in tax systems, and gaps in infrastructure and care facilities, is crucial for fostering women's participation in the workforce and entrepreneurship. Accessible and affordable childcare services play a significant role in facilitating female labor force participation, benefiting both women and early childhood development. Additionally, addressing funding disparities and improving access to networks are critical for narrowing gender entrepreneurship gaps, particularly in dynamic sectors.

Mitigating the risks of deepening digital gender divides requires comprehensive efforts, including safe and affordable access to digital tools, promoting gender-smart artificial intelligence, and empowering more women in the tech industry. Financial markets and ESG-conscious investors can create opportunities for women, with women-led firms often achieving higher ESG scores.

Public policies, such as targets or quotas, and gender-responsive procurement practices, can help mainstream gender equality in firms and supply chains. Policymakers, social partners, and civil society must collaborate to ensure that the transition to a greener and more digital economy provides opportunities for women. This includes investing in women's skills and supporting their innovative business ideas.

In conclusion, addressing gender gaps and empowering women is not only a matter of justice but also an economic imperative. By fostering an inclusive environment and implementing targeted policies, we can unlock the full potential of women, leading to more prosperous and equitable societies.