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Future of Work Q4 2021

Governments can do more to increase diversity in entrepreneurship

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David Halabisky

Economist, Organisation for Economic Co-operation and Development (OECD)

The COVID-19 pandemic has been devastating for entrepreneurs and this is especially true for women, immigrant, youth and senior entrepreneurs. Inclusive entrepreneurship policies can help governments “build back better” by untapping the potential in these groups.


Not everyone has an equal opportunity to transform their ideas into a business. If everyone was as active in business creation as 30-49 year old men, there would be 40% more entrepreneurs in OECD countries. Three-quarters of these “missing” entrepreneurs are women, half are over 50 years old and one-in-eight are under 30 years old.

All entrepreneurs face obstacles but people from some population groups (e.g. women, immigrants, youth, seniors and the unemployed) often face more and greater barriers. These include access to finance, discouraging social attitudes and skills gaps. For example, women in OECD countries are 75% as likely as men to report having the skills needed to start a business.

Three priorities for governments are to address finance gaps, boost entrepreneurship skills and increase the use of tailored support measures.

COVID-19 has exacerbated gaps

Women, youth and immigrant entrepreneurs were the most likely to face interruptions to business activities and business closure during the COVID-19 pandemic. For example, results from the OECD/Facebook/World Bank survey suggested that women entrepreneurs in Europe were 20% more likely than men to report in August 2020 that they had closed their business.

Women, youth and immigrant entrepreneurs are more likely to operate in the hardest hit sectors such as hospitality and personal service sectors. However, many struggled to access government support measures due to eligibility criteria such as revenue thresholds. 

Increasing diversity in entrepreneurship

Inclusive entrepreneurship policies aim to open up opportunities in entrepreneurship for those with an idea for a sustainable business, regardless of their background and characteristics. Harnessing this untapped potential can uncover new ideas, create jobs and contribute to economic growth.

While many governments deliver tailored entrepreneurship support for women, immigrants, youth, seniors and the unemployed, current offers are insufficient. They do not always adequately address biases in institutional conditions, nor do they sufficiently address the needs of diverse groups of entrepreneurs. 

Three priorities for governments are to address finance gaps, boost entrepreneurship skills and increase the use of tailored support measures. Governments can improve access to finance by injecting capital into microfinance markets to address unmet demand. 

Second, entrepreneurs need better skills programmes to support their aspirations, notably in the areas of financial literacy, digital skills and business management.

Finally, a greater use of tailored support is needed to address the needs of different groups of entrepreneurs. This can be achieved by engaging more diverse groups in policy design to help ensure that is it sensitive to varied needs.For further details, please see the Missing Entrepreneurs 2021 report. This report was prepared by the OECD and European Commission as part of a long-standing collaboration on inclusive entrepreneurship policy, which also includes policy briefs, country-specific reports and the Better Entrepreneurship Policy Tool.

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