Time and again, studies have shown that companies with female executives perform better.
And yet, as we’ve discussed before, the numbers of female CEOs, high-level executives, and entrepreneurs in the U.S. today are surprisingly low. Why?
In an article for BusinessWeek today, Vivek Wadhwa (an entrepreneur, senior research associate at Harvard Law School, and executive in residence at Duke University) discusses research that shows that women entrepreneurs are very similar to their male counterparts in background and purpose — which is why he thinks the lack of female entrepreneurship, especially in the tech industry, is a “societal failure” on our part.
Only 19% of the 237,843 American firms founded in 2004 were owned by women, as reported by the Kauffman Foundation, Wadhwa reports. He compares that poor showing in the U.S. to another trend in seemingly more conservative countries, where female CEOs are on the rise.
He cites India, where divisions of some of the biggest international financial institutions are run by women, from HSBC, to JPMorgan Chase, to UBS.
What could explain this disparity? “India’s finance industry is newer, and women there may contend with fewer entrenched players, says Cindy Padnos, managing director of Illuminate Ventures, who has been researching the role of women in high tech,” Wadhwa writes.
Whatever the reason, it’s definitely to the country’s benefit. “Women-led high-tech startups generate higher revenues per dollar of invested capital and have lower failure rates than those led by men, her research shows.”
“Women are also more capital-efficient; the average venture-backed tech company run by a woman was started with one-third less committed capital than those led by men, yet achieved comparable early revenue levels,” he continues.
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