Women Entrepreneurs With Novel Ideas Less Likely To Face Bias


NEW YORK: People are likely to systematically discount the competence of female entrepreneurs and the investment-worthiness of their enterprises.

However, this bias is mitigated when women pitch a particularly novel business idea, a new study finds. UC Santa Barbara sociologist Sarah Thebaud asked participants in the study to review and rate business plans for their investment-worthiness.

The plans were identical, but she manipulated the first names of the entrepreneurs.

"Most businesses tend to replicate others that are similar - one pizza place may be a little different from another, but basically they're all serving the same thing.

"For those types of businesses, I found the participants systematically rated women-led businesses to be less investment-worthy and less likely to be successful," said Sarah Thebaud.

The participants also rated women to be less skilled and less competent as entrepreneurs than their male counterparts, regardless of the industry of their start-up.

But then Thebaud added a twist, she adjusted the business plans so the venture was particularly innovative.

"Each participant rated two businesses - one that was standard run-of-the-mill and one that was introducing a brand new product or service to the market," she said.

"Interestingly, innovation in the business plan didn't have a systematic effect on the ratings of men's businesses.

"However, when a woman was pitching an innovative plan, she was systematically rated to be more competent or skilled and more worthy of investment than her non-innovative female counterpart," said Thebaud.

So why the switch? Thebaud suggested that when female entrepreneurs propose innovative business ideas, they signal traits that characterize society's stereotype of what an entrepreneur is supposed to be: aggressive, ambitious, independent, creative, a risk-taker.

The study was published online in the journal Social Forces.

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Source: IANS