Magazine

That Fighting Yankee Spirit


When it comes to starting a business, more American women give it a go than those in other developed countries. But American women are less likely than others to turn their startup into a successful company.

In 2005, 9.7% of U.S. women were engaged in early entrepreneurial activity, compared with an average of 3.9% in 18 other developed countries, according to the 2005 Report on Women & Entrepreneurship issued in March by the Global Entrepreneurship Monitor. Yet the percentage of American women whose companies were open after three years was just 3.4%, compared with 4.4% abroad.

The disparity boils down to differences in laws and culture. In other countries, social welfare programs act as disincentives, offering greater job security and better benefits than U.S. employees have. (A similar effect is seen in men.) Plus, financing a small business is even tougher overseas. A failed venture can be more detrimental to one's credit abroad, says Maria Minniti, who co-authored the study with fellow Babson College professors Elaine Allen and Nan Langowitz.

In the U.S., the high rate of attempts helps keep the economy dynamic. And the lower startup and failure costs lead more women to become entrepreneurs. So while bad ideas overseas tend to get shot down before companies are actually launched, Americans are willing to try and try again.

By James Mehring


Ebola Rising
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