We all know that the U.S. economy has been slow to recover from the Great Recession. In fact, some are suggesting that we may have slipped back into a recession. Slow growth has become the new normal for our economy, and economists all have their theories on why, but an interesting one emerged this week: a lack of women-owned businesses.

According to a policy report from the Ewing Marion Kauffman Foundation that was released on Monday, women tend to start businesses at roughly half the rate of men. Why is this a big deal? Because for the economy to pick up steam and grow at pre-Great Recession levels, it needs more women to start their own businesses, the report’s researchers said.

“Over the past handful of decades, more women have entered the workforce, with positive outcomes for the growth of the economy,” said Jason Wiens, policy director at Kauffman, in this Inc. article. “But they haven’t entered entrepreneurship at the same rate, and this signals potential left on the table.”

Barriers for Women Entrepreneurs
The Kauffman Foundation report identified several reasons why women aren’t starting their own businesses at the same rate as men. Consider how some of these barriers may have impacted some of your own entrepreneurial aspirations:

  • Lack of mentors: Much of entrepreneurship is experiential, so teachers are important. Yet when it comes to mentors, fewer exist for women, Wiens said. This may be a “chicken or egg” problem, he adds, as there are fewer women-owned businesses to begin with.
  • Less funding: Women on average start their businesses with half as much capital as men, the report found. Furthermore, they have only a 30 percent chance of attracting angel and venture capital funding.
  • Perceptual bias: Women entrepreneurs face invisible barriers based solely on gender. A recent study by UC Santa Barbara asked participants to evaluate nearly identical business plans from entrepreneurs whose gender was made obvious. Support for plans formulated by women was less strong than for men’s, unless the women’s plans had an unusual bias toward innovation.

How to Fix the Problem
With the problem identified — a lack of women entrepreneurs — the next step is to determine what can be done to fix it? The Kauffman Foundation report stressed the need for more women to become involved as mentors, and for organizations that support entrepreneurship to include more women leaders. In addition to steps taken by the private sector, the report asserted that more can be by done by the government to make women-owned businesses a reality for all.

For example, federal programs such as the Small Business Innovation Research grant program, where only 15 percent of awards have gone to women business owners in recent years, should increase their outreach to women, the report suggests. Furthermore, public officials could also talk more about successful female entrepreneurs, as well as the need for more women to start to their own businesses.

“They [private employers and the government] can help turn the tide in the perceptual challenges that women entrepreneurs face,” Wiens noted.

What are your thoughts on this report? Let us know in the comments section below.