COVID-19 disrupted the world. It sparked the sharpest global recession in recent history, upended personal and professional lives, and will forever change the way we operate. We also know that the pandemic had a disproportionate impact on women, as we addressed in “Empowering Women: How COVID-19 has Affected the Gender Gap”. In this study, we look at the impact of COVID-19 on female entrepreneurs, through the lens of the Goldman Sachs 10,000 Women and 10,000 Small Businesses Alumni.
“Womenomics1" refers to the significant impact and contribution that women make to a global economy, and women entrepreneurs are a powerful piece of the puzzle. According to the World Bank, there are more than 12 million women-owned firms in the US that contributed nearly $3 trillion annually to the economy. In developing countries, women entrepreneurship is rising and there are roughly 10 million small-and medium-sized enterprises with at least one women owner2.
Women have successfully been driving commercial outcomes, but gender barriers in entrepreneurship still exist. Globally, only 1 in 3 businesses are owned by women3. And according to the OECD, 5.3% of women are involved in business creation, compared to 7.9% of men4. With less representation, role models, and natural networks, only 43.4% of women report their capability to start a new business, a confidence gap of 12.2% relative to men5.
The COVID-19 pandemic exacerbated many of the challenges that women already faced, including access to financing, industry segmentation, family commitments, and confidence. The sectors in which women disproportionately work were hurt most by the pandemic, and the tightening of capital reserves amplified the financing gap. COVID-19 also intensified caregiving challenges, as school closures meant balancing a business with full-time parenting. Together, this all chipped away at confidence.