Europe’s entrepreneurial equality paradox

Nima Sanandaji, Kristoffer Melinder and Klas Tikkanen

September 15, 2022

According to studies such as the Gender Gap Report, European nations are at the forefront of gender equality. It is also evident from the World Value Survey that European societies are characterised by gender-equal values.

However, while studying high-end entrepreneurship around the world, we find that Europe has a general lack of entrepreneurship and a particular lack of women in entrepreneurship. In places such as China, a considerably higher share of the most successful entrepreneurs are women. We believe that this entrepreneurial equality paradox is linked to policy.

The UK and other nations in western and northern Europe have policies that limit the opportunities for entrepreneurship in women-dominated sectors such as education, health care, and elderly care. Europe needs reforms to boost entrepreneurship in general, and in particular among women.

The ‘superentrepreneurs’ project is about studying high-end entrepreneurship, focusing on the close to 2,500 individuals in the world who have built up billion-dollar fortunes by creating new companies or growing small businesses into large successful ventures. The point is to measure the tip of the iceberg; by looking at superentrepreneurs, we can understand which countries are more conducive to free enterprise in general.

The top 10 ranking of countries with the most superentrepreneurs per capita includes Switzerland and Cyprus on top, as well as Sweden, Ireland, and the UK. Yet while half of the top 10 list is made up of European countries, Europe is lagging considerably behind.

The reason is that large European countries such as France, Spain, Italy, and even Germany are largely relying on old economic structures—and have a deficit of superentrepreneurs. While the eastern European economies are growing, and largely embracing free market policies, they lack both the size and research and development investments, to give rise to more than a few high-impact entrepreneurs.

There are 3.1 superentrepreneurs per million adults in the US, far outpacing other large economies. This can be compared to 1.7 superentrepreneurs per million adults in Canada, 1.1 in Oceania, 0.9 in China, and merely 0.8 in Europe. Thus, Europe does not only have fewer high-end entrepreneurs than China but in fact a slightly lower concentration also in relation to the population.

What is perhaps even more surprising, is how far behind Europe is in women’s entrepreneurship. In all regions of the world, most of the entrepreneurs that have managed to build up billion-dollar fortunes are men, with only one out of twenty billionaire entrepreneurs being women. This is still a development over time, as billionaire entrepreneurs previously were nearly exclusively men.

Many of the female superentrepreneurs of the world are found in China, where 71 women have created billion-dollar fortunes through entrepreneurship. In the rest of Asia, there are 13 female superentrepreneurs. In comparison, there are 28 female superentrepreneurs in the US and as few as 8 in Europe.

We must ask ourselves: Why is it that the European countries are so far behind in women’s high-end entrepreneurship?

We believe that an important reason is that education, health, and elderly care in European systems are limited by public sector oligopolies and regulations. In Europe, women-dominated parts of the economy, therefore, offer limited opportunities for high-impact entrepreneurship. The US, as well as Asian economies such as China, are more open to entrepreneurship in health and education, which explains why otherwise gender-equal Europe is so far behind in this regard.

Our study shows that there are numerous policies that are positively linked to fostering superentrepreneurs. Strengthening property rights, making it easier to run businesses, lowering the taxes on profits and capital gains, and improving the knowledge level in schools, are the changes that are needed for countries to have more high-end entrepreneurs.

Another finding is that high-end entrepreneurship is strongly linked to job creation. One more superentrepreneur per million adult inhabitants is linked to 0.88 percentage points lower unemployment. The effect is strongest for the broad middle class with intermediate education, for whom one more superentrepreneur per million adults is linked to 1.1 percentage points lower unemployment.

There are good reasons for Europe to foster high-end entrepreneurship in general, but the gap in women’s high-end entrepreneurship needs to be highlighted. For European policymakers, the challenge is to foster business-friendly reforms, encourage further integration of a common European market, and remove barriers to entrepreneurship in women-dominated fields of the economy, such as education, health, and elderly care. Europe needs a boost in entrepreneurship in general, especially in the women-dominated fields of the economy.


Written by Nima Sanandaji, Kristoffer Melinder and Klas Tikkanen

Nima is the Director of European Centre for Entrepreneurship and Policy Reform, Kristoffer is Managing Partner at Nordic Capital and Klas is Chief Operating Officer at Nordic Capital

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