{"id":32319,"date":"2021-06-24T12:41:06","date_gmt":"2021-06-24T11:41:06","guid":{"rendered":"https:\/\/digileaders.com\/?p=32319"},"modified":"2021-06-24T14:01:21","modified_gmt":"2021-06-24T13:01:21","slug":"what-works-to-boost-diversity-in-entrepreneurship","status":"publish","type":"post","link":"https:\/\/digileaders.com\/what-works-to-boost-diversity-in-entrepreneurship\/","title":{"rendered":"What works to boost diversity in entrepreneurship?"},"content":{"rendered":"
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Women<\/a>\u00a0and\u00a0minority ethnic<\/a>\u00a0entrepreneurs combined contribute around \u00a3130 billion to the UK economy. Despite their sizeable economic \u2013 and social \u2013 contribution, women and minority ethnic founders still face disproportionate\u00a0barriers<\/a>\u00a0when it comes to starting and growing a business. They experience worse\u00a0access to finance<\/a>, are less likely to rely on\u00a0formal support<\/a>\u00a0and struggle to secure\u00a0government or corporate contracts<\/a>. Tackling these barriers could add at least\u00a0\u00a3250 billion<\/a>\u00a0of additional value to the economy. Although the barriers to entrepreneurship are increasingly well documented, we still know little about which interventions are most effective to address them.<\/p>\n<\/div>\n

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This blog summarises the evidence base on boosting diversity in entrepreneurship. We illustrate how experimental methods can be useful to design interventions and evaluate whether these interventions actually result in better business outcomes for under-represented entrepreneurs.<\/p>\n

 <\/p>\n<\/div>\n

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How can we diversify the pool of entrepreneurs?<\/h3>\n

Women and minority ethnic<\/a>\u00a0groups are less likely to start and grow a business, especially in high-growth tech sectors. While some of these differences in entrepreneurial activity can be explained by different\u00a0growth motivations or business preferences<\/a>, a large body of research demonstrates that\u00a0minority ethnic<\/a>\u00a0and\u00a0women founders<\/a>\u00a0are held back by unequal access to finance, markets and networks. This makes it harder for them to realise their entrepreneurial ambitions and to thrive as business owners.<\/p>\n

A growing number of initiatives are set up to help more\u00a0women<\/a>\u00a0and minority ethnic people become entrepreneurs. These include exposing\u00a0school children to entrepreneurship<\/a>,\u00a0creating youth entrepreneurship programmes<\/a>, and offering\u00a0business building bootcamps<\/a>\u00a0to accelerate their entry into entrepreneurship. However, the impact of these initiatives is only rarely rigorously evaluated, so we do not yet know whether they result in increased business ownership among women or minority ethnic groups.<\/p>\n

This is why experiments are important: they can help identify which interventions are most effective. For example, some trials demonstrated that role models play a crucial role in fostering positive entrepreneurial attitudes. One trial, carried out at a German university,\u00a0examined whether exposure to a female entrepreneurial role model would boost entrepreneurial aspirations<\/a>\u00a0among female students. As part of an entrepreneurship course, students were randomly assigned to help a female or male entrepreneur prepare a business plan. Female students that were matched with female entrepreneurs reported higher entrepreneurial intentions and more favourable attitudes towards entrepreneurship, offering robust evidence on the role that same-gender models play.<\/p>\n

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How can we tailor support to diverse groups of entrepreneurs?<\/h3>\n

Interventions to increase entrepreneurial aspirations among women and minority ethnic groups need to be complemented with tailored support programmes that go\u00a0beyond \u2018fixing\u2019 entrepreneurs<\/a>, but, rather, fix the inequalities they face. Such interventions can range from creating novel funding mechanisms, such as\u00a0peer-selected investment<\/a>, developing\u00a0targeted mentoring programmes<\/a>, to setting up dedicated\u00a0incubator and accelerator programmes<\/a>. However, to our knowledge, the impact of many of these interventions on women and minority ethnic entrepreneurs is yet to be experimentally evaluated.<\/p>\n

Project GATE<\/a>\u00a0(Growing America Through Entrepreneurship), a large-scale randomised experiment in the US, illustrates why business support programmes should be evaluated with a specific target group in mind. The GATE project offered free entrepreneurship training to those interested in starting or growing a business. Applicants were randomly assigned to a treatment group (which received the training) or a control group (which received no services). Surprisingly, the training did not have long-term effects on business ownership rates, earnings or growth. In fact, those in the treatment group were as likely as those in the control group to have started or grown a business. What\u2019s more, the project\u00a0perpetuated existing gaps<\/a>\u00a0in entrepreneurship, as White entrepreneurs were more likely to benefit from the training compared to Black entrepreneurs. White entrepreneurs who received the training had better access to finance, which enabled them to start a business following the training. If the training was complemented with financial assistance, perhaps the project could have supported more Black entrepreneurs to start a business. These findings demonstrate that interventions can have counterproductive effects on some entrepreneurs if they are not designed with their needs in mind.<\/p>\n

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How can we engage a diverse group of entrepreneurs with business support?<\/h3>\n

Even when business support is available, women and minority ethnic entrepreneurs may be reluctant to engage with it. The\u00a0What Works Centre for Local Economic Growth<\/a>\u00a0suggests various reasons why support take-up may be low, many of which are likely to pose greater barriers for women and minority ethnic entrepreneurs. They may struggle to comply with requirements or they may not perceive the support as suitable for them. Some entrepreneurs may also distrust external advisors, or the support simply is not easily accessible due to the location or time. Finally, there may be a social stigma attached to receiving support.<\/p>\n

Experiments can help disentangle which of these mechanisms drive low uptake of support and can test ways to increase uptake. For example,\u00a0one trial<\/a>\u00a0aimed to test whether a \u2018de-biased\u2019 invitation message would increase the number of women who apply for a tech skills course. The \u2018de-biased\u2019 message was designed to counteract stereotypes about women in tech, for example by emphasising that firms were actively recruiting women. The de-biased message resulted in double the applications compared to a generic message, indicating how carefully designed messages can be an effective tool to increase entrepreneurs\u2019 engagement with business support.<\/p>\n

In addition to improving outreach messages, other \u2013 yet to be experimentally tested \u2013 interventions to increase support uptake include setting up satellite offices in communities with under-represented entrepreneurs, providing a mix of on-demand and live content, and offering support to complete applications, for example by hosting optional information sessions.<\/p>\n

 <\/p>\n<\/div>\n

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Work with us to design and test interventions to boost diversity<\/h3>\n

At IGL, we work with innovation agencies, city councils, policymakers and many others to make innovation and entrepreneurship policies more experimental and evidence-based.\u00a0For example, as part of our work with the\u00a0National League of Cities<\/a>, we supported city departments to increase business diversity by learning how experimentation can improve their procurement processes.<\/p>\n

Get in touch with\u00a0innovationgrowthlab@nesta.org.uk<\/a>\u00a0to discuss how we can help your organisation design and test novel ways to support a diverse range of entrepreneurs.<\/p>\n

The<\/i>\u00a0Innovation Growth Lab (IGL)<\/i><\/a>\u00a0is one of Nesta\u2019s specialist enterprises. Led by Nesta in collaboration with government partners, IGL works globally to promote experimentation and ensure that innovation and growth policy is informed by new ideas and robust evidence.\u00a0<\/i><\/p>\n<\/div>\n

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Originally posted here<\/a><\/p>\n

More thought leadership <\/i><\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Women\u00a0and\u00a0minority ethnic\u00a0entrepreneurs combined contribute around \u00a3130 billion to the UK economy. Despite their sizeable economic \u2013 and social \u2013 contribution, women and minority ethnic founders still face disproportionate\u00a0barriers\u00a0when it comes to starting and growing a business. They experience worse\u00a0access to finance, are less likely to […]<\/p>\n","protected":false},"author":51,"featured_media":32321,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"class_list":["post-32319","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","topic-digital-inclusion","topic-diversity"],"acf":[],"yoast_head":"\nWhat works to boost diversity in entrepreneurship? | Digital Leaders<\/title>\n<meta name=\"description\" content=\"This blog summarises the evidence base on boosting diversity in entrepreneurship.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/digileaders.com\/what-works-to-boost-diversity-in-entrepreneurship\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What works to boost diversity in entrepreneurship?\" \/>\n<meta property=\"og:description\" content=\"This blog summarises the evidence base on boosting diversity in entrepreneurship.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/digileaders.com\/what-works-to-boost-diversity-in-entrepreneurship\/\" \/>\n<meta property=\"og:site_name\" content=\"Digital Leaders\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/digitalleadersprogramme\" \/>\n<meta property=\"article:published_time\" content=\"2021-06-24T11:41:06+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-06-24T13:01:21+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/digileaders.com\/wp-content\/uploads\/2021\/06\/pexels-alexander-suhorucov-6457579-scaled-e1624534806752.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"533\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Louise Westcott\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"What works to boost diversity in entrepreneurship?\" \/>\n<meta name=\"twitter:description\" content=\"This blog summarises the evidence base on boosting diversity in entrepreneurship.\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/digileaders.com\/wp-content\/uploads\/2021\/06\/pexels-alexander-suhorucov-6457579-scaled-e1624534806752.jpg\" \/>\n<meta name=\"twitter:creator\" content=\"@DigiLeaders\" \/>\n<meta name=\"twitter:site\" content=\"@DigiLeaders\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Louise Westcott\" \/>\n\t<meta name=\"twitter:label2\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/digileaders.com\/what-works-to-boost-diversity-in-entrepreneurship\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/digileaders.com\/what-works-to-boost-diversity-in-entrepreneurship\/\"},\"author\":{\"name\":\"Louise Westcott\",\"@id\":\"https:\/\/digileaders.com\/#\/schema\/person\/50d407d47f6db15304462e27d166bef1\"},\"headline\":\"What works to boost diversity in entrepreneurship?\",\"datePublished\":\"2021-06-24T11:41:06+00:00\",\"dateModified\":\"2021-06-24T13:01:21+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/digileaders.com\/what-works-to-boost-diversity-in-entrepreneurship\/\"},\"wordCount\":1092,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/digileaders.com\/#organization\"},\"image\":{\"@id\":\"https:\/\/digileaders.com\/what-works-to-boost-diversity-in-entrepreneurship\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/digileaders.com\/wp-content\/uploads\/2021\/06\/Untitled-presentation-71-e1624535173435.png\",\"inLanguage\":\"en-GB\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/digileaders.com\/what-works-to-boost-diversity-in-entrepreneurship\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/digileaders.com\/what-works-to-boost-diversity-in-entrepreneurship\/\",\"url\":\"https:\/\/digileaders.com\/what-works-to-boost-diversity-in-entrepreneurship\/\",\"name\":\"What works to boost diversity in entrepreneurship? 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