Women’s Entrepreneurship Policy and Access to Financial Capital in Different Countries: An Institutional Perspective
-
Colette Henry
,
Susan Coleman
Abstract
This paper explores women’s entrepreneurship policy and practice in three different countries: Canada, Ireland and the U.S. We focus specifically on policies relating to access to financial capital, and ask: How are ‘access to financial capital’ policies and practices operationalized at national and regional level? We draw on institutional theory to identify gaps in policy and practice, and to highlight similarities and differences between countries. We contribute a novel perspective on women’s entrepreneurship policy by drawing attention to the underlying institutional pillars and the importance of institutional fit in informing a coherent and future-looking policy framework. Our findings enhance understanding of how ‘access to financial capital’ policies and practices geared toward women entrepreneurs reflect different institutional contexts.
1 Introduction
Women’s entrepreneurship is a growing area of scholarly inquiry and has attracted increased policy attention in recent years (GEM 2021; OECD-GWEP 2021). Access to financial capital is a key barrier to women’s entrepreneurial development in starting and growing businesses (Coleman and Robb 2018). Consistently, women entrepreneurs have been shown to receive significantly lower levels of equity capital, relying mainly on bank and personal funds to finance their business (Leitch, Welter, and Henry 2018). In response, governments have sought to introduce policies and programmes designed to increase entrepreneurs’ access to capital. Accordingly, in this paper we explore women’s entrepreneurship policy and access to financial capital in different countries.
While studies on enterprise policy have focused on a range of issues, including policy formulation (Arshed, Mason, and Carter 2016), effectiveness (Ramaciotti, Muscio and, Rizzo 2017), and contextual analysis (Welter 2011), specific studies on women’s entrepreneurship policy are limited. Examples of topics explored to date include women’s entrepreneurship policies in specific country contexts (Coleman et al. 2019; Henry et al. 2017; OECD-GWEP 2021); the state of women’s entrepreneurship policy (Hechavarria and Ingram 2019), and policies affecting specific types of women entrepreneurs (Coleman and Robb 2018).
With regard to access to financial capital, scholarship demonstrates an emerging body of research focusing on venture financing (Brush et al. 2018); start-up financing (Naegels, Neema, and D’Espalier 2018) and angel investment (Coleman and Robb 2018). Neither public policy nor current entrepreneurial ecosystems adequately support the circumstances of women entrepreneurs (Brush et al. 2018; Leitch, Welter, and Henry 2018). Scholars also highlight the need for further research in the areas of policy and programmatic responses to gender gaps in financing, including multi- and transdisciplinary approaches to address the multiplicity of contexts, and counter the entrepreneurial ‘deficit model’ for policy targeted at women entrepreneurs (Leitch, Welter, and Henry 2018). This paper represents a response to these calls for studies that deepen our understanding of the policy landscape for women entrepreneurs’ access to financial capital. We draw on institutional theory to ask: How are access to financial capital policies and practices operationalized at the national and regional level? The selected countries – Canada, Ireland and the U.S. – are developed economies located in the Western Hemisphere, yet are sufficiently diverse in terms of geography, population, economic make-up and entrepreneurship policies and practices to enable insightful and valuable comparative study.
We contribute a novel perspective on women’s entrepreneurship policy by drawing attention to the underlying institutional pillars (Scott 2001, 2008) and the importance of institutional fit in informing a coherent and future-looking policy framework. Our findings enhance understanding of how such policies and practices are operationalized in different countries at the national and regional level. The paper proceeds as follows: First, we outline the research context by reviewing relevant literatures on access to financial capital and entrepreneurship policy in the context of women’s entrepreneurship. This is followed by our conceptual framework. Next, we present our empirical findings, and subsequently discuss them in the context of institutional theory. The final section presents our conclusions, signposting some avenues worthy of future scholarly inquiry.
2 Research Context
2.1 Access to Financial Capital for Women Entrepreneurs
Access to financial capital is one of the most frequently cited and pressing challenges for women entrepreneurs at all stages of firm development. Within the context of developed economies, such as the three we examine in this paper, studies suggest that both supply and demand side challenges persist in terms of women entrepreneurs’ access to financial capital.
Prior research points to lower revenues and employment among women-owned compared to men-owned businesses. Women are significantly less likely to apply for all forms of external capital, and report limited access to equity financing. Women entrepreneurs also tend to raise smaller amounts of financing (Constantinidis, Cornet, and Asandei 2006). Studies also suggest that women borrowers have higher levels of dissatisfaction with their lending experiences and receive loans on terms that are less favourable than those granted to men (Muravyev, Talavera, and Schafer 2009). Contemporary studies on the gender of firm ownership and terms of lending are inconclusive.
The gender gap in external equity, an important source of growth capital, is especially pronounced. Women entrepreneurs typically receive only a fraction of angel and venture capital (VC) funding (Brush et al. 2018). Discrepancies are attributed to ‘homophily’ among equity investors, or the tendency of ‘likes’ to invest in ‘likes’, and lack of women angel and VC investors (Amatucci 2016). Studies have reported subtle forms of gender bias on the part of male and female investors (Alsos and Ljunggren 2017).
Women entrepreneurs also face challenges that point to norms governing their roles in society and the economy as influences on their access to financial capital. For example, some studies suggest that higher levels of risk aversion in women, combined with a desire to maintain control, discourage borrowing and financing that requires the entrepreneur to give up a portion of equity. Consistent with these studies, women entrepreneurs, on average, have shown a preference for internal and personal sources of financing. Some studies delve into women’s lack of self-efficacy, particularly in matters relating to financial capital (Barber and Odean 2001). Lower levels of financial knowledge and financial confidence translate into avoiding the fund-raising process, not asking for enough financial capital, or accepting capital under terms that are less favourable (Scotiabank 2020; The Rose Report 2019).
Given the number of the structural or systemic barriers to accessing financial capital (e.g., access to small business financial training, implicit biases in lending relationships, lack of women angel investors and venture capitalists), scholars have asked what role can or should public policy play in increasing women’s access to financial capital (Brush et al. 2018a; Leitch, Welter, and Henry 2018).
2.2 Women’s Entrepreneurship Policy
Arshed, Mason, and Carter (2016) find that the implementation process of enterprise policy initiatives is complex and confusing, with relationships between actors fragmented. The effectiveness of policy implementation is reduced by a lack of timeliness, clearly defined programme objectives and appropriate business supports. Measurement and evaluation of policy implementation is often absent. Xheneti (2017) takes a broader view of the context in which policy formulation is situated. In a longitudinal study of policymaking in post-socialist Albania, the interaction of national and transnational levels was seen to change over time, through the processes of mimicking, socialisation, comparison and funding prioritisation. Xheneti (2017) supports a nuanced view of the policy formulation process – one that responds to changing configurations of knowledge, policy tools, resources and actors’ understanding of issues that result in gaps between goals and impact of policies.
Fritsch and Storey (2014) illustrate the complexity of regional entrepreneurship policy. For example, factors influencing productivity at the regional level are found to be different from those that influence direct employment creation. Consequently, politicians have to decide which economic factors they need to address because policies impact regions differently (e.g., rural, remote or urban; prosperous or less prosperous, and economically growing, stagnating or declining). Accordingly, policy needs to reflect regional or place-based differences and be tailored to local circumstances.
Although a number of studies have addressed women’s entrepreneurship policy in general, few have focused on policies to increase women entrepreneurs’ access to financial capital. To the best of our knowledge, none has explicitly examined both the national and regional articulation and operationalization of polices. To illustrate this point, one group of studies describes the state of women’s entrepreneurship policy, often highlighting the potential for policy enhancements (Hechavarria and Ingram 2019; Kvidal and Ljunggren 2014; Stam 2015). A second group focuses on women’s entrepreneurship policy in specific countries (Henry et al. 2017; Nziku and Henry 2021), while a third addresses policies affecting intersectional characteristics or types of women entrepreneurs, i.e., high-growth, home-based, Aboriginal, immigrant, minority, racialized or underrepresented (Carter et al. 2015). Other studies have explored women’s positioning within policy discourses (Ahl and Nelson 2015), and policy recommendations from published scholarship (Foss et al. 2019).
Using a feminist lens, Coleman et al. (2019) highlight the need for public policy support by examining policies and practices designed to increase women entrepreneurs’ access to financial capital in five innovation-driven countries. The study identifies policy and practice gaps in the five countries, all of which represent developed economies with legal and regulatory commitments to women’s equality and equal access to financial capital. Findings also reveal that policies tend to conform to a neo-liberal agenda whereby women entrepreneurs are positioned as economic assets. This perspective places a priority on larger, growth-oriented, and job-creating firms at the expense of other types of firms, including solo or self-employed workers, social enterprises, co-operatives, lifestyle and home-based businesses. In response to ‘othering’, and thus devaluing, of all women entrepreneurs and women-owned enterprises, Coleman et al. (2019) call for the development of an ‘inclusive ecosystem model’ as a means for advancing policy and increasing women entrepreneurs’ access to financial capital. Their recommendations are consistent with earlier studies asserting that women entrepreneurs are viewed as being deficient if they do not think, act and make the same choices as men (Ahl and Nelson 2015; Marlow and Swail 2014). More recently, scholars have questioned policies founded on the premise of individual deficits that need to be ‘fixed’ through policy intervention and other measures (Jennings, Rahman, and Dempsey forthcoming; Marlow 2019).
3 Conceptual Framework
In this paper, we adopt institutional theory as our conceptual framework. This is because the literature suggests that ‘institutions’ are gendered and, as such, impact the levels of women’s entrepreneurship in different countries (Wu and Li 2020); they play a specific role in women entrepreneurs’ access to financial capital. For example, regulatory institutions govern the supply of financing in a national and regional context, and normative institutions influence whether women perceive themselves capable of securing financial capital.
Scott (1995) explains institutional theory as three distinguishable “pillars” - regulative, normative and cognitive – that vary by emphases, carriers and level of analysis. Scott’s framework (2001) seeks to understand the content of institutions and sources of isomorphism via these three pillars.
Institutional theory considers the processes by which structures, including schemas, rules, norms and routines, become established as authoritative guidelines for social behavior. It explores how these elements are created, diffused, adopted and adapted over space and time; and how they fall into decline and disuse (Scott 2001). North (1990) points to the fact that institutions make up the mechanisms that either incentivize or constrain actors and limit their best-choice options to generally predictable outcomes. Scott’s pillars elicit three related but distinguishable bases of organizational legitimacy: regulatory, which adheres to rules; normative, which stresses a moral basis for legitimacy; and cultural-cognitive, which points to the legitimacy that comes from conforming to taken-for- granted understandings, roles and templates (Scott 2008:61).
An institutional perspective on entrepreneurship is, according to Sine and David (2010), one that examines how the regulative, normative and cultural-cognitive dimensions of the environment shape entrepreneurial processes such as identifying, creating and exploiting opportunities, firm founding, initial growth and exit (p. 3). Sine & David claim that more attention within the institutional theory literature needs to be directed to entrepreneurship, e.g., how entrepreneurs navigate their cognitive, normative and regulatory environment, and/or modify and build institutions to support new types of organizations. In applying institutional theory, we must be mindful that the regulative, normative and cultural-cognitive pillars may have different empirical outlets in different country contexts.
Contexts are especially important to understanding entrepreneurship in various countries. To emphasize this, Friedland and Alford (1991) introduce the concept of logics to institutional theory. They argue that each societal sector is characterized by a central logic that is associated with “a set of material practices and symbolic constructions” which shape and constrain the behavioral repertoire of social actors (1991, p. 248).
Spatial or place-based contexts, such as countries are particularly important because they are normally (perceived as being) beyond the control of the individual entrepreneur (Bergmann, Hundt, and Sternberg 2016). Audretsch et al.’s (2012) study of 74 West German planning regions, for example, demonstrates how region-specific factors are related to a region’s innovative capacity and, as a consequence, regional growth. Kristiansen (2002) emphasizes the role of normative institutions, exploring entrepreneurs’ perceptions of their contexts as enabling environments for their business endeavours. Focusing on small-scale business innovators in Tanzania, Kristiansen identifies regional normative and regulatory institutions that are important for business success. These include value and needs or individual motivation and business objectives; opportunity or natural resources, information, skills, capital, labour, infrastructure and markets; bureaucracy, which is seen as limiting the entrepreneurs’ success; and the geographical context from the individual entrepreneur’s point of view. Accordingly, support policies designed to encourage entrepreneurs need to be based on an understanding of their specific regional context (Boschma et al. 2017; Kristiansen 2002). The regional context, for example, comprises the immediate physical and geographical areas in which entrepreneurs operate, regional support organisations and initiatives, business networks and local industries therein. Consideration of regional context is especially important in women’s entrepreneurship because, as Welter, Brush, and de Bruin (2014) point out, entrepreneurial behaviour is gendered because of place, and place itself is gendered; gender, place and entrepreneurship are, thus, intertwined.
Consistent with Wu and Li (2020), we suggest that gendered institutions have negative impacts on women’s entrepreneurship. The regulative, normative and cognitive forces shape and, at the same time, constrain women entrepreneurs and their access to financial Institutions – understood as regulatory, normative and cultural-cognitive pillars – are, thus, key underlying factors of women’s entrepreneurship policies:
The regulative pillar contains mandated specifications including laws, governance and monitoring systems. This pillar is derived from a rational economic model of behaviour (North 1990) concerning rules, sanctions and conformity.
The normative pillar concerns values, expectations and standards, such as roles, repertoire of action and conventions. This pillar underlies understanding motivation for, or resistance to, entrepreneurial behaviour within different country contexts.
The cultural-cognitive pillar denotes predispositions and symbolic value as a model for individual behaviour regarding individual acceptance of entrepreneurship. Cognitive aspects include perceived general preparedness for becoming an entrepreneur, such as level of education, work experience and business knowledge.
4 Methodology
4.1 Data Collection
4.1.1 Sample Selection
The countries we selected for our study – Canada, Ireland and the U.S. - have diverse economic backgrounds, cultures and financial landscapes. They are categorised as ‘high income’ countries (GEM 2020). In terms of Total Entrepreneurial Activity (TEA), the U.S. and Canada report the highest female to male Total Entrepreneurial Activity (TEA) rate at 0.71, and Ireland the lowest at 0.50 (GEM 2020). While relatively high percentages of women in Canada (49.5%) and the U.S. (37%) have access to financing to start a business, in Ireland the percentage has been reported at only 22.9% (OECD 2016). The percentage of women who report borrowing funds to start a business ranges from 1.1% in Ireland, to 1.3% in the U.S. and 1.8% in Canada. All three federal governments share the recognition that access to financing is critical to entrepreneurial development, and that women entrepreneurs face greater challenges than their male counterparts in this regard (GEM 2021).
The methodology adopted for this study builds on the Global Women’s Enterprise Policy (WEP) project (Coleman et al. 2019; Henry et al. 2017). Policy documents were coded into the following categories: (1) academic articles (i.e., journal articles, book chapters, conference papers, etc.); (2) policy documents (i.e., official policy documents, policy statements, policy strategies issued by standing government); and (3) policy studies/reports, small business/entrepreneurship programs or related initiatives, i.e., support projects/programs on the ground established on behalf of government or its agents, the creation of new governmental bodies or structures and new or revised laws or regulations. A total of six documents were analyzed: one ‘policy’ and one ‘practice’ document related to women’s entrepreneurship and access to financial capital from each of the three countries. The policy documents were categorized as Category 2 documents in Ireland and the U.S., and Category 3 in Canada.[1]
Two common reading guide templates were designed to collect and code data relating to the type, focus, content, imagery, relevance and underlying gender biases of the sampled policies and practices. The practice template also included a general description of the program/initiative selected, information on the responsible agency, period of operation, funding, eligibility and application criteria. These data were supplemented by the researchers’ knowledge of and insights into their respective country’s female entrepreneurship policy and practice landscape.
4.2 Data Analysis
4.2.1 National Level Analysis
We began by analysing our data at the national level. One member of the research team compiled the completed reading guides from the three sample countries into two ‘master’ excel spreadsheets (policies and practices). Initial analysis and interpretation of data was then undertaken. By way of triangulation, and to help improve data validation, ensure accuracy and provide consistency of data input (Archibald 2016; Guba 1981), the other research team members then crosschecked the data for discrepancies, coding inaccuracies or misinterpretations. This process resulted in a few, very minor adjustments to the data analysis and interpretation.
4.2.2 Regional Level Analysis
Our regional analysis involved a four-step process: 1) we analysed the original policy and practice documents in conjunction with the reading guide data to check for regional relevance. This was achieved by applying a set of key regional signifiers[2] to the data as search terms, noting frequency, priority and context of same; 2) to provide context, selected samples of text narrative were then highlighted for their regional focus or lack thereof; 3) an analytical framework was drawn from institutional theory and applied to the policy and practice data; and 4) resulting analyses were crosschecked among the team for consistency of interpretation. A qualitative, discursive approach was then adopted.
5 Findings
5.1 National Level Analysis
5.1.1 Policy and Practice – Document Type and Focus
While only two of the selected policy documents focused exclusively on women entrepreneurs (Canada and U.S.) rather than entrepreneurship in general (Ireland), two of the three highlighted the unique challenges facing women entrepreneurs, emphasising perceived deficits and need to ‘fix’ women through education, training or information. One policy document (Canada) focused on broader ecosystem challenges. None of the policy documents focused exclusively on financing. All highlighted the importance of access to financial capital. For example, the U.S. policy stated that: ‘…getting more money into the hands of women entrepreneurs continues to be a top priority in order to start and grow businesses.’ The Canadian policy document identified macro or organizational level challenges, including alleged gender biases among financial institutions and investment networks. The Irish policy identified access to capital as ‘critical to all business start-ups.’
With regard to practices, while Canada’s and Ireland’s ‘access to financial capital’ practices focused on micro and small ‘business/entrepreneurship programmes or related initiatives’ that were funded or established by government or its regional agents, the U.S. practice (JOBS) focused on a new financial law. Only Ireland’s and Canada’s finance practices focused exclusively on women entrepreneurs. Within our sample, numerous types of financial capital (e.g., venture capital, debt, grants) were highlighted, as well as the targeted recipient groups. Program eligibility ranged from being explicitly women-focused (e.g., investment funds for high-tech/high women-led firms in Canada, equity financing in Ireland), to non-women focused initiatives such as the U.S. JOBS legislation. Tables 1 and 2 summarize the policy and practice data we collected on our three selected countries.
Policy summaries.
| Country | Canada | Ireland | USA |
|---|---|---|---|
| 1. Title | There’s No Going Back. Unlocking an Inclusive Ecosystem for Women Entrepreneurs. | National Policy Statement on Entrepreneurship in Ireland | National Women’s Business Council 2012 Annual Report |
| 2. Year | 2021 | 2014 | 2012 |
| 3. Sponsors | McGill University, on behalf of Innovation Science and Economic Development Canada | Dept of Jobs, Enterprise & Innovation | National Women’s Business Council |
| 4. Focus | Identify systemic barriers within/beyond the ecosystem for women entrepreneurs and understand COVID-19 restrictions. Micro, small and medium sized firms, women-owned and women-led. Non-profit organizations are able to apply for funds through WES Ecosystem fund. | Entrepreneurship in general (includes a section on Access to finance) | Women’s Entrepreneurship. (Access to finance was one of five key areas for which recommendations were made) |
| 5. Content | Gap analysis, case studies, stakeholder consultations, Gender Based Analysis Plus (GBA+). | Sets out a vision for Ireland to be a ‘world class environment in which to start and grow a business’; identifies the framework to make this happen. Outlines key actions around six entrepreneurial ecosystem components/themes. There is a dedicated section on Access to Finance; identifies this as critical to start-ups. A total of 15 actions related to access to finance are listed, focusing on: expanding the range of access to finance instruments; attracting more angel and international VC investors; ensuring banks develop the skills necessary to deliver appropriate financial instruments. |
Recommendations are offered in 5 main areas: high growth businesses; federal procurement; access to financial capital (getting more money into the hands of women entrepreneurs (e/ps) continues to be a top priority in order to start and grow businesses); data and research; NWBC governance. Women e/ps’ access to financial capital is listed as one of the 5 key recommendations. |
| 6. Key themes | Need for systemic approach to policy. Women entrepreneurs face systemic barriers to accessing capital. Multiple private and public stakeholders and resources overwhelm entrepreneurs. Eligibility requirements of emergency government funding programs excluded business with fewer employees, barring a majority of women entrepreneurs and vulnerable groups. In 2021, eight provinces and one territory offer programmes to address access to capital. Funding at the regional level ranges from $5K to $15K (CDN) per business. One-size fits all is ineffective. Needs and place-based approach to policymaking is critical for serving diverse populations. | Building pipeline of e/ps; building e/p capability; building right conditions (based on 6 key e/p ecosystem areas). | Access to financial capital for women entrepreneurs |
| 7. Recommendations | Need to extend diversity-based training to those making decisions. Linked women’s entrepreneurship with provision for childcare. Offer $1000 tax credit for purchase of subscription-based digital tools. ISED to work with Finance Canada to streamline the application process for loans into standard tax filing procedures. Incentivize unregistered entrepreneurs to register through tax credits. Consider attaching mentorship component to tax credit recipients. Advance GBA+ training to regional level. | Recommended actions are related to the 6 components of the ecosystem: culture, human capital and education; business environment and supports; innovation; access to finance; e/p networks and mentoring; access to markets. as well as benchmarking. Main access to finance recommendations are: expand range of access to finance instruments; attract more angel and international VC; ensure banks develop skills necessary to deliver appropriate financial instruments. Women only mentioned once under first category above: expand range of access to finance instruments – launch 6 competitive start funds in 2014 including schemes targeted specifically at women. |
Increase support and technical assistance for women e/ps thru continued funding of WBCs and SBDCs; better education on both debt and equity financing options; lenders also need to be educated about how women e/ps view financing; create incentives – such as tax credits – for financial institutions and private equity investment firms to get more women-owned high growth businesses in private equity deal sourcing pipelines; reaching out to HE/grad school programs for recruiting and education. |
8. Contribution:
|
|
NWBC is one of the two major national policy groups dealing with issues of public policy for women. It reports directly to the President and Congress – hence carries a considerable amount of weight. This report highlights financial capital for women e/ps as a top priority. Key contributions are offered in terms of: highlighting the importance of financial capital for women e/ps; pointing out that women e/ps still experience challenges in securing debt capital; calling for further education for women ep/s on debt/equity options; highlights need to educate lenders on women e/ps’ perspectives; recommending additional tax credit incentives to encourage equity investment in growth-oriented women’s e/pship; highlights role that HE can play in getting more women into investment fields. | |
| 9. Other comments | Most recommendations mirrored the 2011 CDN Taskforce (http://sites.telfer.uottawa.ca/womensenterprise/
). Recommendations specified performance targets for BDC with respect to increasing access to capital for high-risk, grow-oriented female entrepreneurs. In March 2015 (prior to the report submission in July 2015) the Business Development Bank of Canada announced an additional $700 million over 3 years towards debt financing of women-owned firms. |
Women mentioned in context of underrepresented groups; role models and networks suggested as supports; one mention of a targeted competitive fund for women; detailed monitoring guidelines. | None |
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Source: Authors’ creation.
Practice summaries.
| Country | Canada | Ireland | USA |
|---|---|---|---|
| 1. Programme name | Women Entrepreneurship Strategy (WES) | Competitive Start Fund for Female Entrepreneurs | Jump Start Our Business Act (JOBS) – Title II and III (H.R. 3606 (2012). Jumpstart Our Business Startups Act). [NOT specific to women] |
| 2a. Responsible agency | Innovation Science and Economic Development, Government of Canada | Enterprise Ireland | Securities and Exchange Commission |
| 2b. Category | Federal government with partnership with sector and regional agencies | Central/National government agency | Federal government |
| 3. Year established | 2018 | 2012 | JOBS Act 2012, Title II 2013, Title III 2016 |
| 4. Period of operation | Launched in 2018. Second round of funding provided in 2021. | Unclear: each ‘call for applications’ is typically confined to one call per year, with a strict application window (i.e. two weeks) | Three years (until the law is replaced or changed) |
| 5. Description | The purpose of the Women Entrepreneurship Strategy (WES) is to advance women’s economic empowerment with the aim of increasing women-owned businesses’ access to the financing, talent, networks and expertise they need to start up, scale up and access new markets. | The fund is designed to help start-up and early stage female owned/led companies to get off the ground and launch new products and services in the international marketplace. The aim is to provide young companies with critical early stage funding for the key commercial and technical milestones, for example: Evaluate overseas market opportunities; build a prototype; develop a market entry plan for exploiting international opportunities; secure a partnership deal or strategic alliance; identify suitable channels to international markets; and secure third-party investment. | This is not a program per se, rather, these are changes to the law intended to increase the flow of private equity capital to firms by allowing firms to solicit investors directly (Title II), and by opening up equity crowdfunding to non-accredited investors (Title III). |
| 7a. Total funding available | Women Entrepreneurship Fund of $30M (CDN) to develop existing businesses. WES Ecosystem Fund: $85M over five years to strengthen women entrepreneurs’ capacity in the ecosystem. Women’s Entrepreneurship Knowledge Hub: $8.6M to establish knowledge hub to address networking exclusion, information overload, and risk aversion. | €1M | N/A – do not provide funding directly but remove regulatory restrictions on how firms can communicate their funding needs to potential equity investors; Title II removes restrictions on equity investments by non-accredited investors. |
| b. Per applicant | Multiple envelopes: venture capital fund specifies minimum of $600K and maximum of $5M (CDN). Loan fund: loans of $50K to women business owners. Loan adjudicated through two national women’s enterprise support organizations (SheEO, Women’s Enterprise Organizations of Canada), a regional economic development association and an Aboriginal capital corporation. | €50K | Individuals who earn less than $100K per year can invest the greater of 5% of their annual income or $2K; those who earn more than $100K can invest up to 10% but not more than $100K in one year. |
| 8. Laws | Venture capital eligibility: lead applicant must be a not-for-profit with a focus on support women in the venture capital market (e.g., business, investor association; post-secondary academic institution or research institutes, research/innovation hubs, Indigenous organization, business accelerators and incubators, associations representing not-for-profit social enterprises or co-operatives. One partner in operation for at least two years. | Applicants must be: Female entrepreneurs or female-led start-ups; active in manufacturing and internationally traded services sectors including a broad range of sub-sectors in Agtech, Cleantech, Fintech, Software, Lifesciences, Food, and Medical, Digital and Renewable Technologies. | See above for definitions of Title II and Title III. |
| 9. Regulations | Not known | This is a competitive fund. Funding is provided to companies who rank highest in the scoring process. Applicants must have revenues of less than €100,000 and not be in receipt of other equity investment (more than €150,000) prior to applying. A maximum of €50,000 is available to successful applicants, delivered in two equal tranches for 10% shareholding by the State agency (Enterprise Ireland). Successful applicants are required to secure €5,000 cash investment before funds are awarded. Successful applicants will also have the opportunity to participate in Dublin BIC’s accelerator programme delivered over a 12-week period and receive mentoring sessions.
|
Title II:
|
| 10. Other comments | Review of funding found that three-quarters of provincial funding programs focusing on women entrepreneurs was linked with ISED WES program (Wasif et al. 2021). Venture capital fund applicants must specify “geographic regions that will be served by project” with a “minimum of five provinces or territories.” |
This is a competitive fund with limited monies. | Although these initiatives are not targeted at women, they should benefit women significantly. Data suggest that Title II has helped raised the profile of women-owned firms and helped to attract a growing number of women angel investors. Women-focused angel groups have grown in number and visibility |
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Source: Authors’ creation.
5.1.2 Policy and Practice Content
The two policies in the sample that were specifically targeted at women entrepreneurs (Canada and U.S.) identified gaps in access and support provision, specifying improved access to financing as a priority measure. Ireland’s policy document included a dedicated section on access to financing within which only one category of women-targeted initiatives was identified. The Canadian policy document cited high rates of loan rejections, risk aversion or systemic factors that compel women to have higher awareness of risk which influences agency and decision-making. The U.S. policy, by comparison, attributed the underrepresentation of women’s businesses in venture and private equity investment to women entrepreneurs’ limited access to deal sourcing pipelines (NWBC 2012: 17).
The Canadian document emphasized the need for gender-based analysis plus (GBA+) at the federal and lower (e.g., provincial or regional) levels, and systemic approaches to policy given multiple stakeholders, regional influences and systemic differences among women-owned and led businesses. Both the Canadian and U.S. policy documents recommended that lenders be ‘educated’ on women entrepreneurs’ perceptions of financing and gender biases in lending. The U.S. document also recommended that private equity investment firms get more women-owned firms into deal-sourcing pipelines; and that female financial analysts in investment fields be recruited from graduate schools (NWBC 2012, p. 17).
With regard to the content of the selected practices, both the Irish (Competitive Start Fund for Female Entrepreneurs) and the Canadian (Women Entrepreneurship Strategy) were explicitly women focused. This was surprising given that Ireland’s policy document did not focus on women specifically, and Canada has no formal women’s enterprise policy. By way of contrast, the U.S. policy was targeted at women, but the practice example was not.
The funding available from these practice examples ranged from €50K (Ireland) to $15,000 (CDN) targeted at women-owned business owners (Canada). No actual funds were available in the U.S. practice, as this practice example was designed to increase the flow of private equity to firms. Program eligibility criteria varied and were often complex. In Canada and Ireland, for example, criteria were built around sector (i.e., IT, Health, Cleantech, Manufacturing, Internationally Traded Services), stage of development and type of capital. For example, the WES in Canada provided up to $15M (CDN) for projects to strengthen the venture capital sector for women-owned and led enterprises.
At least one female founder with a significant ownership position was specified for the Canadian practice, while the ‘high potential start-ups’, generating sales of €1M and creating 10 new jobs within three years were requirements for the Irish practice. The rules and regulations relating to the release of funds were also complex. Ireland’s Competitive Start-Fund for Female Entrepreneurs required entrepreneurs to secure €5K cash investment before funds would be awarded; they also had to have revenues of less than €100K and not be in receipt of other equity investment (more than €150K) prior to applying. U.S. regulations were even more complex (see Table 2). These specified that investors whose annual income was less than $100,000 (USD) could invest up to 5% of their income ($2000 max). Investors earning over $100,000 could invest up to 10% of income. Under Title II, only accredited investors were allowed to invest, with individual companies required to provide evidence of accreditation. Title III also opened up investing to non-accredited investors, but here offerings had to be made through a certified broker-dealer or portal. Firms could receive a maximum of $1,000,000 (USD) in any twelve-month period.
Analysis of the above national policies and practices revealed an inherent focus on the entrepreneurial ‘deficit’ model (Leitch, Welter, and Henry 2018). This was evidenced by frequent references in the documentation to the many challenges and barriers facing women entrepreneurs, and their categorization as a disadvantaged group. This was coupled with the underlying notion that such barriers could be overcome by raising awareness of existing supports. This suggests a strong focus on the cultural-cognitive institutional pillar. The recognition of the importance of encouraging women’s entrepreneurship, along with the regional focus articulated in the policy documents, speaks directly to the normative institutional pillar; this highlights the economic value of entrepreneurship and the expectation that it is an activity ‘for all’, regardless of geographic location. Alongside this, however, there was an embedded expectation that high-growth, high-tech and export-oriented entrepreneurial endeavours were prioritized. This was noted in the Canadian assessment of policy, with recommendations to focus on solo workers. This was further evidenced in the financial practices, and while both soft (i.e., the U.S. example) and hard (i.e., Canada and Ireland) instruments were advocated in our sample, eligibility criteria were often quite complex, reflecting adherence to the regulative institutional pillar. Thus, policies and practices intended to support women entrepreneurs could, potentially, serve to further restrict them.
5.2 Regional Level Analysis
5.2.1 Canada
The search process documented an absence of public policy to frame the Women Entrepreneurship Strategy (WES). This is an important observation given the scale and scope of the WES in 2018 ($10B CDN) and WES in 2021 $6.5B (CDN).
Assessment of 2018 and 2021 WES eligibility criteria and capital allocation processes suggests a marked transition from a centrally managed program in 2018 to regional engagement in 2021. Regional parameters and partnerships are important given that a recent review of programs to address the lack of capital targeted at women entrepreneurs found that only eight provinces and one territory offer such programs (Wasif et al. 2021). There is a considerable overlap at the federal provincial and regional capital programs level.
Significant variations in women-focused capital program eligibility by region were reported (Expert Panel (“Panel”) on Championing and Mentorship for Women Entrepreneurs, 2015). Strict eligibility criteria extended to the specifics of what the financing could be used for (e.g., purchasing new equipment, marketing and developing new products) as well as guidelines in relation to company size (in terms of revenue and employees). The lack of women-focused financial support programming in Southern Ontario, Canada’s most populated and industrialized region, was deemed particularly problematic. Centralized equity funding reflects a de facto policy of cherry-picking promising firms in certain sectors, and hence negating the cross-sector characteristics of majority women-owned firms (Rosa and Sylla 2016).
In 2015, the “Panel” recommended that Business Development Bank of Canada set aside 30% of its profits toward a high-risk fund aimed at supporting enterprises unable to receive capital from traditional investors. The fund would be committed to serving entrepreneurs of every region, industry and size. The only necessary condition to access funding should be demonstrating growth potential, with a focus on enterprises demonstrating high growth potential (p. 3). The Panel also reported that women entrepreneurs’ lack of knowledge about available programs and the complexity (or labyrinth) of regional programs further constrain their access to resources. For example, it was estimated that less than 5% of the women entrepreneurs who participated in the project roundtables were aware of key (national) portals such as Canada Business Network (CBN), BizPal and Futurepreneur. The portals were described as ‘dated’ and ‘cumbersome’, with links that failed and contact numbers that did not connect to the appropriate person.
Related panel recommendations included a mentorship program for high-growth women entrepreneurs; an online hub for entrepreneurs to access information on government resources, connect to programs, receive advice on navigating government programs, share best practices and publicise success stories; a national marketing campaign to increase awareness of related federal programmes; a networking tool for entrepreneurs (e.g., an online platform to promote existing conferences and forums); a ‘matchmaking’ service for experts to share best practices; and various supplier diversity policies and programs. These recommendations have been obsessively operationalized through the 2018 and 2021 WES.
The 2021 WES program specifies federal partnerships with lead regional development agencies and 30 innovation centres in supporting women entrepreneurs. Whereas the 2018 WES employed a federally centred opaque adjudication process to award grants of $100,000 (CDN), and crown corporations to adjudicate loans and venture capital (i.e., Business Development Bank of Canada, Export Development Canada), the 2021 WES engages four specialized intermediaries: The Women’s Enterprise Organizations of Canada (WEOC), The National Aboriginal Capital Corporations Association (NACCA), The Northumberland Business Development Assistance Corp and SheEO. Regional criteria are specified within the intersectional attributes of “women-owned businesses”, specifically women in rural and remote regions which “includes, but is not limited to, women with disabilities; indigenous women; women in rural or remote regions; recent immigrants; visible minority women; women who identify as two-spirit, lesbian, gay, bisexual, transgender individuals; and women from Official Language Minority Communities (OLMCs).”
Regional specification is further evidenced in the 2021 WES “Inclusive Women Venture Capital Initiative.” The equity program advances funding up to $5,000,000 (CDN) for projects that demonstrate capacity to reach a national or multi-regional audience. Projects are also expected to serve a minimum of five provinces or territories. Projects must be delivered in Canada’s two official languages (French and English) with a priority to applicant projects “…that deliver services in all provinces and territories …that include a focus on or intention to.”
5.2.2 Ireland
In contrast to the Canadian document, the Irish entrepreneurship policy document has an embedded regional focus; this is not surprising, given Ireland’s size, rurality and island context. ‘Region’ and ‘local’ are clearly articulated within the policy’s vision:
Embracing and implementing the approach set out in this statement will result in Ireland having excellent support networks at local and national level and strong policy frameworks within which businesses can be born and flourish (p. 7).
The regional focus is carried through into the policy’s strategic objectives, for example, to: ‘Build world-class entrepreneurial hubs and achieve greater regional spread of such hubs, facilitating entrepreneurial leadership’ (p. 14). This is further evidenced in explicit intentions to ‘enhance the spirit of entrepreneurship within every region in Ireland’, focus on ‘the regional start-up ecosystem’ (pp. 47–48), and ‘develop the regional spread of start-up activity by enhancing the start-up environment outside of Dublin’ (p. 47). Promoting entrepreneurship ‘at the local level’ is a key objective, and this is further highlighted within the section on recommended ‘Key Actions’ where the policy narrative focuses on intentions around specific local and regional support initiatives, including:
Improve the effect of mentoring as a tool to support entrepreneurship (p. 50).
Test market on a regional pilot basis the establishment of an interactive searchable portal for mentors accessible to all enterprises (p. 50).
Encourage networking amongst companies in the same sector or region to share knowledge (p. 46).
Initiatives will be developed at local and regional levels to encourage businesses to work with LEOs and Údaras na Gaelteachta to support more start-ups, establish survive and grow (e.g. through mentoring and networks) (p. 32).
Mentoring and networking are the intended means by which entrepreneurship policies are to be regionalized/localized in Ireland; however, the policy acknowledges that some regions face greater challenges than others, i.e., rural, Gaelteacht (Irish speaking) and border areas. Rural areas, which account for 57% of Ireland’s population, are some of the most remote regions in Ireland. They suffered a greater detrimental effect of the recession than urban areas and did not experience the same level of economic turnaround. Border regions are those with towns/cities located on or close to the border with Northern Ireland. Many of these regions are still suffering the economic and social disadvantages caused by the ‘troubles’.
The Irish policy document describes bank lending, micro-finance and credit guarantee schemes, venture capital, EU initiatives, and alternative and innovative sources of finance. It identifies a series of specific actions in relation to improving access to financial capital for entrepreneurs. These have a clear regional dimension and focus mainly on competitive funding: ‘Using competitive funds available to the LEOs to seek proposals for entrepreneurship hubs at regional level’ (p. 49), and ‘Build on the success of the competitive feasibility funds to launch three regionally targeted competitive feasibility funds (Cork, South East and Midlands) (p. 43). Only one of these competitive funds is dedicated to female entrepreneurs; this despite the considerable attention paid in the policy document to the significantly fewer number of female entrepreneurs, the notable gender gap in high potential start-ups (HPSUs), the need to exploit the untapped female entrepreneurial potential, a commitment to the promotion of female entrepreneurship (p. 23), and an acknowledgement that access to financing is a particular challenge to female entrepreneurship (p. 22).
Launch six competitive start funds in 2014, including schemes targeted towards female entrepreneurs, the aviation and manufacturing sector and, for the first time, towards graduates (p. 43).
Consistent with the Canadian example, no proximal program characteristics are cited within the Irish practice document. The strong regional focus that was so clearly evident in Ireland’s overarching entrepreneurship policy is not reflected in the operationalisation of the main instrument designed to improve access to financial capital for women entrepreneurs, i.e., the ‘competitive start fund.’ Indeed, contrary to the policy’s intention to regionalize financial supports, the practice data for Ireland revealed no mention of some of the key regional signifiers that we found scattered throughout the policy document. This is surprising given the blatant policy focus on specific regions/region proxies such as rural, Gaeltacht, BMW and border areas. The absence of a regional focus within the practice document becomes more blatant through the use of terms such as international, overseas and High Potential Start-ups (HPSUs) – terms that could be interpreted as being almost the opposite of ‘region’.
Finally, our analysis noted that guidance in relation to applying for the ‘competitive start fund’ appeared to be centralized to the capital (Dublin), with information evenings for applicants held in Dublin, and additional support for successful applicants to be offered by the Dublin Business Innovation Centre (BIC) accelerator program. Although Ireland is well-served by local Business Innovation Centres (BICs) and campus-based incubation centres, none is dedicated to women entrepreneurs.
5.2.3 The U.S.
The U.S. policy document highlighted in this paper was produced by the National Women’s Business Council (NWBC). Created in 1988 as a part of the Women’s Business Ownership Act, the NWBC’s charge is to identify barriers to success for women-owned businesses and to report annually to the President and Congress on their findings (http://www.nwbc.gov). As one might anticipate given the size of the United States, the U.S. policy document incorporates a very strong regional focus, recognizing the unique characteristics of regional ecosystems:
NWBC convened a group of senior level investment professionals in New York and the Bay Area to discuss the challenges and opportunities for women-owned businesses to gain better access to private equity funding… (NWBC 2012: 8).
The document also mentions outreach activities in other major cities, including Washington D.C., Atlanta, GA, Shreveport, LA, and Indianapolis, IN (NWBC 2012: 10–11). In other instances, the regional focus is more implicit. For example, the document includes a section on the importance of timely and reliable Census Bureau data for policy and practice formulation at the regional and local level noting that:
Publicly available datasets and products of commonly agreed-upon baseline data allow disparate organizations within and outside the government to extract data required for their program and policy activities. (NWBC 2012: 18)
The above quote suggests that both policy and practice need to be developed at the regional and local level, and that the federal government can support these activities by providing reliable data for use in decision-making.
One of our more interesting findings from the U.S. policy document was the pervasive notion that policy formulation is not a one-way street but rather an iterative process involving regional and local individuals and organizations as well as federal agencies. This suggests that, for federal policy to be effective, it needs to integrate the priorities, experience and insights of regional and local constituencies.
The U.S. policy document also identifies the need to get ‘…more money into the hands of entrepreneurs and business owners, in particular women business owners’ (NWBC 2012: 16). The report also recognizes the role of regional entities in achieving this goal:
To calibrate supply and demand, we urge increasing support and technical assistance for women entrepreneurs through continued funding of organizations such as Women Business Centers, SCORE chapters and Small Business Development Centers, for women entrepreneurs to gain better access to capital through loans from retail banks and other lending entities. (NWBC 2012: 17)
The organizations cited above are ‘resource partners’ of the U.S. Small Business Administration (SBA).[3] From the standpoint of access to financial capital, the SBA and its various resource partners provide support in the form of education, training, mentoring, networks and access to financing typically in the form of loans granted through regional and local lending institutions and guaranteed by the SBA. With the exception of services provided through the Women’s Business Centers, these activities and sources of capital are not specifically targeted at women at either national or regional levels. The policy also suggests additional strategies to benefit growth-oriented women entrepreneurs by ‘reaching out to higher education/graduate school programs for recruiting and educating women as analysts in investment fields’, and ‘creating pathways for an enhanced environment for growth through mechanisms such as crowdfunding…’ (NWBC 2012: 17). Although neither strategy designates a specific regional player, both universities and crowdfunding platforms are based in different parts of the country and reflect the needs and priorities of their respective regions.
The U.S. practice documents focused on Titles II and III of the JOBS Act. Title II eliminated the prohibition against general solicitation or advertising for securities sales to accredited investors, allowing issuers to take their message and requests for funding directly to potential investors. Our review of Title II revealed no regional signifiers. In light of that, the research team also reviewed the Security and Exchange Commission’s Final Rules for implementing Title II (published on July 10, 2013), which provides more detail. The document notes that there were 49,740 unique issuers between 2009 and 2012 including many smaller businesses which are more likely to be regionally based. Accredited investors are somewhat regionally based in that they are more likely to cluster in or near wealthy and financially sophisticated communities. Other than this, we did not find evidence of an explicit regional focus in either Title II itself or in the SEC’s Final Rules for its adoption.
Title III includes two important components: it authorizes equity crowdfunding to be conducted through broker-dealers or funding portals and opens it up to both accredited and non-accredited investors, creating a new funding source and a larger pool of potential investors. A review of Title III revealed a greater focus on the regional dimension through use of the term ‘state’ or some variation thereof to explain the ways in which the authority and laws of the individual states will interface with those of the federal government in the implementation of Title III, and how funding portals will be set up in different parts of the country. The SEC’s Final Rules for Crowdfunding provide additional insights into the intent and scope of this amendment. Their emphasis on the use of funding portals capable of targeting many small investors suggests that Congress was seeking ways to broaden the entrepreneurial ecosystem beyond traditional entrepreneurial hubs and high net worth investors. The digital nature of these funding portals also allows financial capital to be raised across states lines. suggesting that legislators were amenable to a more regional approach to raising financial capital and funding entrepreneurial firms.
6 Discussion
In this section we discuss our findings, further examining our selected policies and practices through the lens of our institutional framework. We focus on the regulative, normative and cultural-cognitive institutional pillars (Scott 1995, 2008), and in so doing, we expect to demonstrate that policies and practices are not only nationally articulated and regionally operationalized in different ways in different geographical contexts, but they reflect their local institutional contexts to varying degrees. Thus, we highlight the heterogeneity of women’s entrepreneurship policies and practices and add further weight to the view that ‘one size’ policy solutions do not ‘fit all’ (Mason and Brown 2014).
6.1 Regulative and Normative Pillars
The particular legislative framework within which entrepreneurship policies and practices operate differs across our three sample countries. Our analysis shows policy development to be a mainly centralized process, articulated and operationalized through different formal institutions in each country, such as federal or regional economic development agencies. Policies are developed over time, and reflect the values, expectations and standards of their respective societies, including elected party ideologies. Hence, with respect to policy making, regulative and normative dimensions are intertwined. For this reason, we discuss these two pillars together.
In Canada, governing structures and implementation of capital market programs were determined through the federal government (Innovation, Science and Economic Development) and executed in partnership with regional economic development agencies and women’s enterprise support organizations (e.g., SheEO, Women’s Enterprise Organizations of Canada). Since the initial gathering of the Canadian data, there have been substantial changes in the regulatory framework with further normative support for women entrepreneurs. For example, in 2015 the liberal government of Justin Trudeau announced significant commitments to support women entrepreneurs, including a mandate to increase women entrepreneurs’ access to capital, access to business innovation programming, help in growing women-owned businesses, and the enhancement of data and knowledge about women entrepreneurs.[4] In July 2018, the federal government released the first Women’s Enterprise Strategy in Canadian history. In 2021, the second tranche of WES funding was announced.
In Ireland, entrepreneurship policy is developed at the national government level, with consultative input from a wide range of stakeholders including academics, practitioners, agencies, individuals and Government Ministers and Departments (DJEI 2014, p. 4). While there is growing interest in women’s entrepreneurship at the national and regional levels (i.e., the normative institutions play in favour of women entrepreneurs), to date, this has not yet spilled over to the regulatory institutions – there is no dedicated national policy on women’s entrepreneurship.[5] However, a strong regulatory framework and normative commitment to women’s entrepreneurship is reflected in the Irish practice example examined in this study.
In the U.S., both strong regulatory and normative institutions are in place to support women’s entrepreneurship. The National Women’s Business Council (NWBC), author of the U.S. policy document, was created as part of the Women’s Business Ownership Act of 1988. Its role is to identify barriers to women’s entrepreneurship and to report annually to the President and Congress. Council members include eight women business owners or CEOs, six representatives drawn from national women’s business organizations, and a presidentially-appointed Chair. The NWBC plays a key role in shaping and articulating women’s entrepreneurship policy through the research it conducts and sponsors and through its annual reports. These reports attest to the importance of women’s voices in crafting regulatory and normative measures that will increase women’s access to financial capital. From a regulatory perspective, the 2012 Annual Report urges legislative and regulatory measures such as tax incentives for angel and VC investment in women-owned high growth businesses, passage of a bill to lift the dollar thresholds in the WOSB Federal Contract Program, and re-authorization of the Women’s Business Center Program. Similarly, the report provides a normative perspective through recommendations designed to increase the number of women receiving Small Business Investment Company funds, federal government contracts, and career opportunities in investment fields. The U.S. practice example, although not specifically focused on women, does respond to several of the NWBC’s policy priorities including women entrepreneurs’ lack of access to external equity capital and the corresponding lack of women professionals in the private equity field. In this sense, the U.S. practice example incorporates both regulatory and normative measures designed to increase the flow of equity capital to a more diverse array of entrepreneurs.
6.2 Cultural-Cognitive Pillar
Our findings show that despite strong emerging regulatory institutions, with normative support, the cultural-cognitive institutions implicitly still support a ‘deficit’ model of women’s entrepreneurship. In Canada, the Panel (2015) recommendation that BDC target high growth potential, women-owned firms is a notable exception. This recommendation is interesting in that it did not address a lack of support in regions (such as Southern Ontario) or funding of start-ups with moderate growth trajectories across all sectors. The recommendation also did not address the need for financial advisory and training support services given documented gender differences in financial knowledge (Coleman and Robb 2018). Prioritizing rapid growth enterprises, without consideration of other types of ventures such as social enterprises and co-operatives, does not align with the profile of most women-owned enterprises. It was misaligned with the mandate to support women’s economic empowerment by privileging a very small group of women. Assessment of Canada’s 2018 and 2021 WES showed evidence of a transition to focusing on women-owned businesses to intersectionality of race, class, education, non-binary sexual identities and other owner characteristics. The inference here is a transition from privileging white, able-bodied, educated and credentialed women to more diverse entrepreneurs.
The cultural-cognitive dimension of our institutional framework was clearly evident in the Irish policy and practice examples. The policy itself was structured around six components of the entrepreneurial ecosystem, and within these, human capital, education, networks and mentoring were highlighted. There was a focus on creating the right conditions for entrepreneurship and building entrepreneurial capability. This was especially the case for women entrepreneurs, who, however, were identified in the document as a minority or disadvantage group, with an underlying suggestion of ‘deficit’ and the need for this to be addressed through education and training. There was also mention of training banks to develop the necessary lending skills. Training and support were also articulated in the practice example, whereby successful applicants to the Competitive Start Fund would be required to participate in a Dublin-based accelerator support program.
The U.S. policy document addresses the cultural-cognitive pillar in a variety of ways. Significantly, there are a number of recommendations directed toward changing the ecosystem in ways that will alter how women entrepreneurs are perceived and valued. As an example, in 2012, the NWBC launched a ‘Collective Voice’ initiative to provide ‘…a consistent and compelling shared story about the value represented by all segments of women-owned businesses’ (NWBC 2012:13). Simultaneously, however, the U.S. policy document also includes multiple recommendations geared toward ‘fixing the women’ through further training and education, suggesting that women are not hampered by environmental barriers but rather by their own lack of knowledge and skills. Typically, these types of training and education are offered through regionally based offices of the U.S. Small Business Administration and its ‘Resource Partners’ that include Women’s Business Centers, Small Business Development Centers, and the Service Corps of Retired Executives (SCORE) (now merely called SCORE). As noted above, the U.S. practice example does not focus on women, but it does focus on changing the entrepreneurial ecosystem in ways intended to benefit a more diverse array of entrepreneurs as well as smaller firms, both of which could make it easier for women to secure equity financing. Whether the government actually achieves that goal is somewhat dependent on where, and by whom, the regionally-based equity crowdfunding portals are set up. For example, if they are set up by a group of tech-focused men in Silicon Valley, they will likely reflect the same gender imbalance in investors and funded companies currently found in angel and VC investing. At the time of writing, however, although Regulation Crowdfunding as authorized by Title III is still concentrated in tech-heavy California and New York, it is also represented in all but three states, thus providing opportunities for capital access to a broader array of entrepreneurs (OASB 2021, p. 14). Consistent with that, 40% of founders funded through Regulation Crowdfunding in 2020 were either women or minorities (OASB 2021, p. 16).
In summary, across all three countries, it is clear from our analysis of the selected policy documents that respect for entrepreneurship is high; that entrepreneurial endeavour across society is seen as valuable, and of considerable importance to the economy on both a national and regional level. Against this backdrop, women’s entrepreneurship is identified as important, and access to financial capital is highlighted as a critical component of the entrepreneurial ecosystem of supports. In this regard, the policy documents identified women entrepreneurs as requiring support additional to that typically available to their male counterparts. Indeed, fixing the women by way of providing ‘more’ (usually ‘more’ training, education or experience) was an implicit underlying theme across most of our sample policy and practice documents.
6.3 Limitations
Notwithstanding the valuable insights that we feel can be derived from our study in relation to women’s entrepreneurship, the authors fully acknowledge the inherent limitations. While we focus specifically on access to financing and examine how policies and practices are articulated and operationalized at national and regional level in three different countries, our findings might have been different if based on an alternative selection of policies/practices across a greater number of countries. In addition to documentary analysis, the methodology also draws on the authors’ knowledge and insights of women’s enterprise policy in their respective countries, and this in itself could have inadvertently introduced some element of bias.
7 Conclusions
This paper seeks to examine women’s entrepreneurship policies and practices in three different countries by applying an institutional lens. We explore how policies and practices designed to improve women entrepreneurs’ access to financing are articulated and operationalized at both national and regional level in Canada, Ireland and the U.S.
Our findings demonstrate that the policies and practices in our three chosen countries are different in terms of their focus, content and regional accommodation. While not all of the policies focused on women entrepreneurs, each identified the need to encourage and support women in entrepreneurship, highlighting the importance of access to financing in this process. While our selected practices focus on access to financial capital, not all focus on women entrepreneurs.
We observe a disconnect between how policies are articulated nationally and operationalized regionally, with some contradiction evident. While policies paid attention to the regional dimension, such attention was often missing within the practices. Even where practices were known to exist regionally, the overarching policy required to manage and co-ordinate them was not necessarily evidenced nationally. An unexpected finding is the considerable vulnerability of women’s enterprise policies to political change, as evidenced by the Canadian example. This example illustrates the gendered political context in which women’s entrepreneurship is positioned – within economic and regional development and financial policies.
In summary, our study highlights the importance of institutional fit not only between national and regional policy levels, but also between the different pillars of the institutional framework. Even when the regulatory and normative institutions are in place and support women’s entrepreneurship, the disconnect between regulatory/normative pillars and cultural-cognitive institutions can result in a dated support model for women’s entrepreneurship, as shown by our findings. While research increasingly embraces the heterogeneity of entrepreneurship (Welter et al. 2017), this diversity obviously is not yet reflected in the underlying cultural-cognitive institutions governing women’s entrepreneurship policies. Here, we contribute a novel perspective on women’s entrepreneurship policies, drawing attention to the underlying institutional pillars and the importance of institutional fit in informing a coherent and future-looking policy framework.
7.1 Implications for Future Regional Policy and Practice
Our study suggests that those involved in women’s entrepreneurship policymaking at the national level cannot assume automatic roll-out (or take up) of their policies and practices at the regional level. Specific plans need to be put in place to utilize what is, in many cases, the valuable and well-established networked infrastructure of regional offices, centers and expertise that already exists. Simply put, the regional focus articulated at the national level must also be evident at the regional level. This is important in order to encourage entrepreneurship across every region, including those disadvantaged by their rural or peripheral location, and to avoid the perception that entrepreneurship is the prerogative of those based in the capital or large cities where the majority of supports are often concentrated.
7.2 Avenues for Future Research
The findings of this study suggest a number of areas worthy of future research. First, while we have focused on ‘access to financial capital’ and entrepreneurship policies in Canada, Ireland and the U.S., future studies would benefit from diversifying and expanding these geographical contexts beyond the developed Western, ‘high income’ economies to include under-developed and developing (low and middle income) countries. Second, while our study focused on mainstream entrepreneurship policies, future studies might include broader supporting policies in relation to gender equality, welfare and support, as these also influence and shape entrepreneurship policies and practices. Third, given that our findings indicate a disconnect between how policies are articulated nationally and operationalized regionally, future studies that incorporate in-depth qualitative interviews with policymakers and practice/program managers might – potentially – offer insights as to why this is the case and what measures might be taken to correct this deficit.
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Articles in the same Issue
- Frontmatter
- Introduction: Gender and Entrepreneurship
- Invited Editorials
- Research on Gender Stereotyping and Entrepreneurship: Suggestions for Some Paths Worth Pursuing
- Gender and Entrepreneurship in the New Era: New Perspectives on the Role of Gender and Entrepreneurial Activity
- Invited Research Article
- Women’s Entrepreneurship Policy and Access to Financial Capital in Different Countries: An Institutional Perspective
- Competitive Research Articles
- Tacking into the Wind: How Women Entrepreneurs can Sail Through Family-to-Work Conflict to Ensure their Firms’ Entrepreneurial Orientation
- Should I Start My Own Venture? Moderating Effect of Pull Factors on the Relationship of Push Factors with Women Entrepreneurial Intentions
- Impact of Accelerators, as Education & Training Programs, on Female Entrepreneurs
- Nascent Entrepreneurs, Entrepreneurial Self-Efficacy, and the Moderators of Race, Gender, and Government Support
- Barriers and Mitigating Strategies of Entrepreneurial Business Growth: The Role of Entrepreneur Race and Gender
- Are the Liabilities of Newness and Smallness the Same for Male and Female Informal Entrepreneurs? Evidence from Brazil
Articles in the same Issue
- Frontmatter
- Introduction: Gender and Entrepreneurship
- Invited Editorials
- Research on Gender Stereotyping and Entrepreneurship: Suggestions for Some Paths Worth Pursuing
- Gender and Entrepreneurship in the New Era: New Perspectives on the Role of Gender and Entrepreneurial Activity
- Invited Research Article
- Women’s Entrepreneurship Policy and Access to Financial Capital in Different Countries: An Institutional Perspective
- Competitive Research Articles
- Tacking into the Wind: How Women Entrepreneurs can Sail Through Family-to-Work Conflict to Ensure their Firms’ Entrepreneurial Orientation
- Should I Start My Own Venture? Moderating Effect of Pull Factors on the Relationship of Push Factors with Women Entrepreneurial Intentions
- Impact of Accelerators, as Education & Training Programs, on Female Entrepreneurs
- Nascent Entrepreneurs, Entrepreneurial Self-Efficacy, and the Moderators of Race, Gender, and Government Support
- Barriers and Mitigating Strategies of Entrepreneurial Business Growth: The Role of Entrepreneur Race and Gender
- Are the Liabilities of Newness and Smallness the Same for Male and Female Informal Entrepreneurs? Evidence from Brazil
