ESADE study: Women are more likely to lead social enterprises

Forty years old, with a 65% chance of being married or living with a partner. This is the profile of the women who become social entrepreneurs in Spain, according to a new study conducted by ESADE’s Institute for Social Innovation with the support of the Abertis Foundation and the EY Foundation. The report, entitled “Women with Impact: The Ecosystem of Women Social Entrepreneurs in Spain”, provides a snapshot of this community. Based on surveys of approximately 70 women who lead or co-lead a social enterprise, the study found differences between women social entrepreneurs and women entrepreneurs in general with regard to age and education level. “Most of the women surveyed say they became entrepreneurs after having gained experience in social endeavours,” commented Mar Cordobés, a researcher at ESADE’s Institute of Social Innovation and director of the study. “They also have a higher level of education than women entrepreneurs in general.” Sonia Navarro, Director of ESADE’s Institute for Social Innovation, added: “Ninety-three percent of the women surveyed have a higher education, compared with 65% for women entrepreneurs in general, as reported by the Global Entrepreneurship Monitor. In fact, 60% of our respondents have a master’s or postgraduate degree and another 18% have a doctorate.”

The main characteristics of women social entrepreneurs are their passion and determination to achieve a particular social impact. A majority of the entrepreneurs surveyed said that these traits were key factors for success. The second most important factor, according to the survey, is having the right team. This factor was considered to be very important by 81% of the women surveyed, whereas leadership ability was valued to the same degree by just 49% of the women. These figures appear to corroborate the “female humility” effect that often leads women to attribute success collectively rather than individually.

Entrepreneurial vocation and professional growth

As for women’s reasons for becoming social entrepreneurs, the study found that 78% wanted most of all to create a business based on their personal values – in 84% of cases, the business’s theme or mission had to do with a personal experience – and 86% said that entrepreneurship was the best way for them to grow professionally. In contrast, economic ambition – deemed important by only 13% of respondents – was not a particularly influential factor. Economic need, cited by just 10% of the women surveyed, was even less common. More than a third of the women interviewed, however, said that work-family balance was a major factor in their decision to start the business.

The largest barrier to success mentioned by the surveyed women was the lack of an adequate legal framework and specific support measures for social entrepreneurship in Spain. The second-largest barrier was a lack of understanding regarding social enterprises on the part of potential investors and/or society in general, as well as difficulty securing financing.

According to the study, 58% of respondents reported that lack of access to financing was a fairly or very important obstacle to the success of their enterprise. Nearly half of respondents said they had to self-fund more than 75% of the investment required to build their business. Subsidies and donations comprised the second most common source of financing. Seventy-eight percent of the women surveyed said they had not used bank loans, and another 88% said they had never received impact investment. Other barriers perceived as important were those related to the social nature of the enterprises – the lack of an adequate legal framework and specific publicly funded support measures for social enterprises was regarded as a fairly or very important barrier by 70% of respondents – as well as barriers related to specific sectors, especially the technology sector. The most important sources of support mentioned by the women surveyed were family (65%) and having the right contacts (59%).

Gender differences?

Although a majority of the women surveyed said they haven’t faced more difficulties than their male counterparts, 87% said that social entrepreneurship offers a new way of doing business that is better aligned with women’s understanding of management. In fact, 56% of respondents said that women have a different business outlook than men, with a more integrative, less hierarchical approach and a greater reliance on one’s network. The 44% of respondents who noticed no differences between men’s and women’s management approaches said that sensitivity and empathy – fundamental elements of social entrepreneurship – are not gendered traits but rather individual characteristics.

Predominant themes: women’s empowerment and social inclusion

According to the study, most of the social enterprises led or co-led by women in Spain take the legal form of a limited liability partnership (60%), while 15% are registered as non-profit associations. The predominant themes addressed by the enterprises were women’s empowerment and the social and occupational inclusion of vulnerable or disadvantaged groups. Consistent with these themes, most of the projects were aimed at the general public, women, children and young people, or people with disabilities.

Sixteen percent of the companies owned by the survey respondents have not yet earned any income, while another 19% have made less than €10,000. Most of the initiatives in these two categories are young, with a track record of less than one year – a very early stage of development. However, 29% of the companies surveyed – most of which have been in business for more than 10 years – earn more than €100,000 per year.

Finally, in addition to pursuing particular social goals, most of the respondents placed a high value on collaborating with customers to meet their needs (a practice embraced by 59% of the companies) and ethical selection policies for vendors and collaborators (54%).