On October 11, 2017, the National Women’s Business Council released a new report, “Necessity as a Driver of Women’s Entrepreneurship: Her Stories.” This report is an extension of the report released by the NWBC in July 2017, “Necessity as a Driver of Women’s Entrepreneurship,” which challenged the notion that entrepreneurship is born from one of two realities: severe economic need or an innovative idea to disrupt the market. The NWBC research recognized these motivations and the entrepreneurship that results from them (typically referred to as “necessity” or “opportunity” entrepreneurship) but suggests that this traditional binary does not fully capture the range of reasons individuals—especially women—become business owners. NWBC’s work expands the traditional definition of necessity entrepreneurship to include a range of factors that might influence a woman’s decision to start a business and introduces a theoretical model to illustrate this expanded definition.
“Necessity as a Driver of Women’s Entrepreneurship: Her Stories” tests the theoretical framework introduced in the July release and offers additional qualitative observations derived from case studies of women business owners. For this report, nine women agreed to discuss their entrepreneurial experiences in context of the new model of necessity entrepreneurship. Their contributions not only provide new insights on when, and how, women launch businesses to respond to any number of concerns encountered in their professional lives, but also allowed researchers to evaluate the new model of necessity entrepreneurship. Here’s what we found:
- Entrepreneurial motivations exist on a continuum.
Four of the women interviewed who met the broader necessity definition being tested also displayed characteristics traditionally associated with opportunity entrepreneurs, such as realizing a vision and capitalizing on an opportunity.
- Women may choose entrepreneurship due to gender-specific issues.
Eight of the nine women interviewed cited gender-specific issues as critical motivators for starting their businesses, and several women cited multiple gender-related issues, including discrimination, childcare challenges, and restrictive workplace policies.
- Entrepreneurship is unlikely to fully resolve concerns motivating business ownership.
Multiple women reported that while the flexibility inherent in entrepreneurship provided relief from restrictive traditional employment environments, entrepreneurship does not equate to more free time. However, entrepreneurship allowed the women to control when they worked and to achieve what they defined as success while balancing their personal lives and professional careers.
- NWBC’s current model does not describe all possible paths to necessity entrepreneurship.
The model assumes that women take a single, linear path to business ownership, arriving at entrepreneurship directly from unemployment, underemployment, or an out-of-the-labor-force status. The interview results challenged the model in this regard, with four women pursuing alternative paths prior to reaching the entrepreneurial decision.
- However, and perhaps most importantly, NWBC’s model captures a diversity of circumstances—beyond emergency economic need or a disruptive business idea—that motivate women to become entrepreneurs.
NWBC is not alone in exploring gender-specific motivations for entrepreneurship—and thereby challenging the typical entrepreneurial narrative. Kerry Hannon, reporter for The New York Times, documented several women’s motivations for entrepreneurship in her recent article, Frustrated or Inspired, Women Go to Work for Themselves, observing that “[an] increasing number of women…are starting businesses as a way to take control of their careers.” Hannon provides an example-within-an-example, too, when detailing the career of Gwenn Rosener,
Although entrepreneurial motivation may exist on a continuum, a line of demarcation does exist between those who prefer the entrepreneurial lifestyle (enthusiastic entrepreneurs) and those who would rather return to the traditional labor force (reluctant entrepreneurs). Because enthusiastic entrepreneurs are more likely to succeed, more likely to create jobs, and more likely to meaningfully contribute to the economy, it is in women’s—and the nation’s—best interest to pave the way for their success. At the same time, options for family leave and flex time will allow women interested in remaining in the paid labor force to stay there, making reluctant entrepreneurship that much rarer. Check out “Necessity as a Driver of Women’s Entrepreneurship: Her Stories” to learn more.
You can read the full report here and join the conversation online using #NWBCResearch. In case you missed the first release in July 2017, you can read the full report, “,” here and take a closer look at defining necessity with our blog on this topic here.
Author: Annie Rorem, Director of Policy and Research at the National Women’s Business Council.