The Entrepreneurial Glass Ceiling: Recognising Bias in Business
Statistics show that women and non-binary people are still significantly underrepresented in leadership positions and as entrepreneurs. This lack of diversity not only inhibits economic growth, but also sustains social and economic inequalities. It’s a problem that must be addressed if we hope to create a more equitable future.
In Finland, we live in a seemingly equal society. Alongside other universities, Aalto University School of Business has increasingly paid more attention to inclusivity and equality each year. However, even on campus one can still overhear undeniably many misconceptions and outdated opinions of how gender stereotypes and biases affect our daily lives and careers. Last spring the column Mitä v*ttua nyt taas by Siiri Varis brought up the cold reality of how female students are too often understated and downplayed in our student community. This brought up a broader discussion of how this corresponds to the aspired values of equality and diversion at Aalto University (Aalto University. 2022. Onko naisista johtajiksi?).
I recently joined wednesday., an Aaltoes project aiming to encourage more women and non-binary people to embark on their entrepreneurial journey. Is this type of project truly needed, some may ask. Before wednesday, the events at Startup Sauna had an unfortunately large gender gap in attendees and volunteers. The majority of the ecosystem consisted of men, and we noticed other people feeling a bit afraid to approach it – a bit out of place, unsure if they were welcome.
For our first events, Startup Sauna was full of new faces. Many sympathized with our teams’ experiences of feeling out of place, not sure how to approach the ecosystem or seek advice on their entrepreneurial journey. These encounters clearly showed us that a project like this was very much needed. For some reason, there is still a high threshold for women and non-binary people to step foot into the world of entrepreneurship.
The surrounding society and culture fail to encourage women and non-binary people to develop an entrepreneurial mindset the same way it encourages men.
Let’s debunk some stereotypes. The concept of meritocracy has often been used to justify inequality regarding social status and career advancements. Thinking that success is based solely on hard work and merits lacks comprehension of the systematic barriers women, non-binary people and other minorities face when trying to become entrepreneurs and grow their businesses. As Antonia Ford wrote in her article 4 essential ways to expose the myth of meritocracy and build inclusive ecosystems for all: “Talent is universal. Opportunity is not.” (2020.) The article explains how debunking the myth of meritocracy helps us realize how underrepresented groups must work harder to gain the same capital of funding, networks and overcome biases, in addition to all the other challenges every entrepreneur faces on their path. Unfortunately, not all aspiring entrepreneurs have equal starting points. Unconscious biases regarding gender, ethnicity and social status still affect greatly how and at what pace we advance in life. This phenomenon is, naturally, pronounced in the already very polarized US, but even in Finland where everyone is often assumed to start from the same line, the way our background affects us, cannot be denied (Kuisma, S. 2016. Väitös: Vanhempien sosioekonominen asema vaikuttaa lapsen tulotasoon läpi elämän. Helsingin Sanomat.).
Another classic counterargument to the absence of women and non-binary people in entrepreneurship is their supposed lack of interest or skill. In the article Gender and Entrepreneurship: Advancing Debate and Challenging Myths; Exploring the Mystery of the Under-Performing Female Entrepreneur by Marlow and McAdam (2013. International Journal of Entrepreneurial Behaviour & Research), it is argued that the lack of women in entrepreneurship does not stem from their unwillingness or inability to engage with science, engineering, and technology (SET) fields or to develop related entrepreneurial ventures. Instead, it lies in the perpetuation of particular masculinized cultures, actions, and behaviors that exclude women from such opportunities. The surrounding society and culture fail to encourage women and non-binary people to develop an entrepreneurial mindset the same way it encourages men. This effect gets amplified when you take socioeconomic status into consideration, making it even harder for more oppressed groups, such as people from low-income families, to build an entrepreneurial identity (Tan & Yang. 2021. Social status and entrepreneurial identity: Implications for new venture creation.).
The restraints do not end when women decide to start striving toward entrepreneurship despite the societal and cultural challenges they might face. Research shows that lack of access to funding is a significant barrier for women entrepreneurs. Herminia Ibarra discusses this gap in her article A Lack of Sponsorship Is Keeping Women from Advancing into Leadership (2015. Harvard Business Review.). The Unconventional Ventures report of 2022 shows how in the Nordics 91,7% of capital funding was invested in all-male founding teams, with only 7,6% invested in mixed teams and just 0,7% in all-female teams. On another note, the McKinsey & Company Women in the Workplace 2022 report states that women are also more likely to quit because of work environments that do not adequately drive equality and support their careers. For a woman interested in building her career, it is incredibly discouraging to constantly run into social and financial obstacles on the pathway up. Sponsors hold a large amount of power, and their bias-based lack of belief in women translates straight into our society, playing for the team of inequality.
It’s a shame that we have to justify the importance of diversity and drive equality in work environments by translating it into monetary- and performance-based benefits.
Despite the obvious need for overall gender equality in the world, why should we opt for diversity and gender equality in business? There is a lot of research that explains how diverse teams simply perform better. Diversity has been shown to promote innovation, creativity, better problem-solving, and generally results in a wider range of outlooks which decrease the risk of making decisions based on consensus (Rock, D. & Grant, H. 2016. Why Diverse Teams Are Smarter. Harvard Business Review.). Another report states that diversity results in better financial performance. In the Why Diversity Matters –report author Dame Vivian Hunt brings up that companies with the highest diversion in ethnicity are 35% more likely to have above-average profitability, whereas, for companies with higher gender diversity, the difference is 15% (2015. McKinsey & Company.).
Of course it goes without saying that the benefits of diversity go beyond financial performance and have a positive impact on society as a whole. It’s a shame that we have to justify the importance of diversity and drive equality in work environments by translating it into monetary- and performance-based benefits. We should drive equality and diversity from the perspective of wanting to create a world where everyone can strive towards their dreams, no matter their background.
wednesday. is a community powered by Aaltoes that unites, inspires, and uplifts entrepreneurial-minded women and non-binary students by organizing free events, excursions and community get-togethers. You can find them under the name @wednesday.aaltoes from social media.
