InnoEnergy’s Innovation Director, Elena Bou, discusses the increasingly important role female entrepreneurs play within in the sustainable energy sector, given today’s rapidly changing energy market.
In 1975 the UN declared 8 March as International Women’s Day (IWD). Originally, this day was to promote equal rights between men and women at work. Today, it is a general celebration of the role of women in society and their economic, political and social achievements.
Talking about women and work can be a sensitive topic. Analysis all too often becomes subjective, based on personal experiences or gets waylaid into a “gender battle”. I prefer to go with the facts.
Statistics say that 31 per cent of entrepreneurs in Europe are women. And, in my field – sustainable energy – it falls to an even narrower minority, around 11 per cent. These figures are not encouraging, especially when talking about innovation and entrepreneurship in a field that is crucial for our economical development and welfare of our society.
Why is gender equality especially relevant in innovation and entrepreneurship?
One of the key aspects for creating disruptive innovation is the creativity potential. This potential is positively correlated with the level of diversity. Diversity is proven to create the so-called “creative abrasion” that is the source of innovative ideas. That is why we look for complementary teams, with different knowledge backgrounds, different nationalities, and, also, different gender. The lack of women in entrepreneurial teams diminishes this creativity potential and ultimately reduces the opportunities for innovation.
This is one of the reasons why in most studies of start-ups and their ecosystems gender equality and the presence of foreign employees are used as proxy indicators of this creativity potential (e.g. The Global Startup Ecosystem Ranking 2015 by Compas, Global Women Entreprenuership Scorecard by Dell, 2015).
Based on start-up ecosystem studies, the lack of female entrepreneurs is not only a European problem and despite an 80 per cent increase in female founders in the last three years, according to ECommerceGenome Global Start-up Ecosystem Ranking, no ecosystem in the world comes close to an equal share of male and female entrepreneurs.
Another more generic reason comes from demographics. Today in Europe, female population exceeds the male one. 51 per cent of European citizens are women. Can we afford to waste this talent? This is even more paradoxical when we are living through a transition in our companies. Before we were talking about “human resources” – today about “human capital”. If this is the case, it is a social responsibility to tackle this topic seriously and – importantly – understand the reasons behind this change.
A photograph of our InnoEnergy Women Entrepreneurs
At InnoEnergy – the largest accelerator in sustainable energy worldwide, we have actively begun researching why the number of women entrepreneurs is so low. In our current portfolio of 150+ supported companies we found that just 15 per cent have women entrepreneurs, slightly above the European average. When it comes to nationalities, Sweden and France take the lead on the number of female entrepreneurs and the academic background of these women is equally distributed between business and STEM studies.
If we review the type of technology or markets that these women are working in, the sample is diverse. In our portfolio, women entrepreneurs are found in fields across the board, including smart buildings, energy efficiency, storage, renewable energy and even energy for chemical fuels. However, there are two interesting aspects. In start-ups where they are applying cross-innovation between health/biomedical and energy, women have a predominant role. Also, more women created start-ups based on software, and trying to solve problems on mobility and smart housing, when compared with hardware.
All our entrepreneurs – regardless of gender – share the same motivations to start a company. But in the case of female founders there are two motivations that appear more frequently: the lack of opportunity to develop in their previous working environment and the desire to do something good. This is, to have a positive impact on society.
Our analysis seems to confirm some of the aspects highlighted by literature and statistics. There is a strong correlation between education and entrepreneurship in sustainable energy . Women make up only one quarter of the STEM classrooms on average across Europe (Eurostat, 2015). This partially explains a potential supply problem. However, when innovation comes from “complementary” teams or cross-innovation, women have more opportunities because they represent the majority of people in tertiary education in social sciences, business and law, and health and welfare.
Culture and social aspects also have an influence. It is not a coincidence that most of our women entrepreneurs are in Sweden – it is a country that is putting a lot of effort on gender mainstreaming.
When asked about the main barriers to start-up in this field, access to social capital was the most commonly quoted hurdle. Entering into a typical “boy’s network” is especially challenging and most women need to rely on their male colleagues and peers to obtain initial introductions into professional networks. Conscious of this barrier, most successful female entrepreneurs began building networks from day one and demonstrate a pro-active attitude towards it. This finding confirms the conclusions of previous studies on women entrepreneurs, that access to social capital is one of the main barriers. (Farr-Wharton, R., & Brunetto, Y. (2007). Women entrepreneurs, opportunity recognition and government-sponsored business networks: A social capital perspective. Women In Management Review, 22(3), 187–207.)
However, against common belief and statistical data, access to finance was not perceived as a barrier for our female entrepreneurs. Inquiring about this topic, we came to the conclusion that most of our women entrepreneurs resort to their family for funding. Some possible reasons are that they have less ambitious plans and their need of capital is not so high, especially because many of them are in non-capital intensive technologies within the field of sustainable energy. One interesting finding is that women are more effective at raising funds as a result of face-to-face meetings. This is especially the case if they resort to bank loans for funding.
The light at the end of the tunnel
InnoEnergy’s initial study of our female entrepreneurs has allowed us to begin exploring this issue on depth. Indeed, this is just a first step, but we are convinced that mobilising all our European talent towards innovation and entrepreneurship in sustainable energy will have a positive impact on solving our society’s energy challenges.
Despite the low number of women entrepreneurs in sustainable energy, the context is promising. Our energy market is changing, new business models are appearing and the Winter Package from the EC about the future of energy is highlighting new areas of development, putting the consumer at the centre. This new context requires high doses of creativity, high-potential and diverse teams and a multidisciplinary approach to face energy challenges. In this context, I am hopeful that entrepreneurial women in sustainable energy can begin to play a more active role.
Ruest-Archambault, E., von Tunzelmann, N., Iammarino, S., Jagger, N., & Miller, L. (2011). Benchmarking Policy Measures for Gender Equality in Science, 1–164.
Bullough, A., de Luque, M. S., Abdelzaher, D., & Heim, W. (2015). Developing Women Leaders through Entrepreneurship Education and Training. Academy of Management Perspectives, 29(2), 250–270.