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Leaving no woman behind: European digital economy and female entrepreneurs

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After the launch of the Digital Single Market in 2015, the EU countries are moving towards a foreseeable future and Europe is becoming digitized at an unprecedented rate. All the sectors of the economy are currently being shaped through digitization and many market-leaders in finance, entertainment and even government are remodelling themselves as “digital”. As a result, entrepreneurial innovation activities are flourishing everywhere in Europe.

WOMEN ARE LEFT BEHIND THE ICT IN THE EU?

While this transformation opens new fronts for SMEs and entrepreneurship, not all the individuals enjoy the same availability of opportunities in the new digital economy. Women constitute more than 52% of the European population but only 34.4% of the EU self-employed are women. And rather than decreasing, this gap is increasing with digitalisation as European women are under-represented at all levels in the digital sector. According to the EU Commission’s Report ‘Women in the Digital Age’, only 14.8% of the all start-up founders in Europe are female. The Global Entrepreneurship Monitor in 2016 shows that Europe has one of the lowest female involvement in Early-stage Entrepreneurial Activity in the world (6%) and the lowest gender parity. The cost associated with the gender digital divide in business is enormous and impacts men and women equally. If women started business in ICT at the same rate as men, European economy would enjoy million more jobs, not only in ICT but also in education, transport and energy sector.

Trends and analysis suggest that education remains a key issue for female digital entrepreneurship. ‘Women in the Digital Age’ reports that only 24 out of every 1000 female graduates in a subject related with ICT (Information and Communication Technology) and only 6% of them find an occupation in the digital sector. Also, the findings of the study show that the gap between men and women with formal ICT-related education has increased since 2011. Therefore, women often do not have enough skills and capacity to initiate a digital business. Apart from education, some obstacles are related to gender stereotypes and traditional assumptions about men and women. Tokenism (the practice of making only a symbolic effort to be inclusive) is very frequent in ICT companies and influences women’s aspirations to further explore business opportunities. Secondly, female entrepreneurs experience material difficulties in initiating a ICT business, including the access to funding. Society’s unconscious biases regarding women’s technical skills and capacities to lead and undertake are also reflected very clearly in women’s access to funding to their projects. Finally, cultural reasons often prevent female entrepreneurs to obtain funds from investors and women tend to receive lower venture capital investments than their male counterparts.

WHAT SHOULD BE DONE

The European entrepreneurial gender digital gap is huge when compared to the situation in the US. According to the Kauffman Index of Startup Activity, women now make up 40 percent of new entrepreneurs in the United States and most of them start a business in the digital sector. Recently the EU Commissioner in charge for digital economy, Mariya Gabriel, outlined a strategy to facilitate the female participation in the digital entrepreneurship. Her strategy focuses on three pillars: challenging stereotypes; promoting digital skills and education and advocating for more women entrepreneurs. While Gabrile’s strategy can certainly be beneficial, the EU Commission should also push EU member states to invest more resources in ICT opportunities for female graduate and set clear and realistic goals to increase women’s entrepreneurship in the digital economy.

Thus, while digitization is shaping today the markets and business in the EU opening new opportunities for SMEs and entrepreneurship, women do not enjoy the same rights and are not treated equally in digital business. Lack of education and skills in digital sector, little access to funding, stereotypes and cultural reasons prevent women to engage in digital entrepreneurship. If no actions to address the female entrepreneurs’ issues are taken by member states, gender digital gap in business will impede economic growth of the EU member states and the European Union as a whole.

Andrea Castagna

Andrea Castagna holds an international master's degree in Russian and Eastern European Studies from the University of Glasgow and a master's degree in EU Studies from the Jagiellonian University. His topics of interest include international development, democratization and the relations between Eastern Partnership Countries and the EU. Besides his policy interests in EU affairs, Andrea is passionate about innovation, digital entrepreneurship and e-democracy.

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