Research shows business-owning women have less appetite for risk than their male counterparts – but they earn more.

Women across the world may still be more reluctant to start their own businesses, but a report from Barclays Wealth and Investment Management shows female entrepreneurs now typically earn more than their male counterparts.

Drawing on a survey by Ledbury Research of more than 2,000 high net worth individuals (800 of whom were self-declared entrepreneurs), the Barclays report shows that the average female entrepreneur had an annual income of £382,000, 14 per cent higher than her male equivalent. But that lead was more than reversed among non-entrepreneurs, where men earned a fifth more than women.

The report, ‘Unlocking the Female Economy: The Path to Entrepreneurial Success’, suggests an evolving profile of women entrepreneurs around the world. According to related data for 2010 by Global Entrepreneurship Monitor, in almost every country worldwide business formation by women lags behind that of men – of the 59 countries investigated, Ghana was the notable exception. And the Barclays research shows that in some areas, the gap is extremely pronounced: just 20 per cent of entrepreneurs in South Korea, for example, are women, while in the US the proportion is 35 per cent (although in geek-heavy Silicon Valley that falls to an astonishing low of 10 per cent).

Those headline numbers need to change, argue the report’s authors, experts drawn from the worlds of business innovation, behavioural psychology and international finance: “Low rates of female entrepreneurship are not just a diversity issue, they are also an economic one because they demonstrate clearly that almost all countries are failing to make productive use of the tools available to enable economic growth.”

The different levels of commitment to entrepreneurial endeavour they observe may be due in part to attitudes to risk, success and failure: while men generally place high value on financial success, women are more likely to take into account a range of non-financial outcomes, the research indicates. They also differ in their appetite for risk: on average, men rate their tolerance of risk higher and, while 60 per cent of male entrepreneurs said their past failures made them more likely to succeed in the future, that fell to 51 per cent among women. As a result, men may be more willing to take advantage of volatility: 58 per cent of the survey group said the financial crisis had thrown up fresh opportunities, compared to 46 per cent of women.

Global economic imperative

The 200 female entrepreneurs polled had very similar sources of wealth to the men – property sales, inheritance, personal investments and so on – with two exceptions. Male entrepreneurs appear to have amassed more in bonus payments and are more frequently the beneficiaries of business sell-offs. Among the men surveyed, 23 per cent said a significant proportion of their wealth came from the sale of one or more companies, compared to just 13 per cent for women.

The report concludes that women should be given more support and encouragement to set up their own businesses. Making access to finance easier should be a government priority, its authors recommend, pointing out that women are under-represented among venture capitalists and that female entrepreneurs may sometimes be too candid in their business pitches.

Barbara-Ann King, who heads the female client focus at Barclays Wealth and Investment Management, says the community of female entrepreneurs is often overlooked. “By scrutinising the current levels of entrepreneurialism, and identifying the distinct behavioural traits of male and female business owners, we can identify what needs to be done to best support the current and future generations of entrepreneurs.”

And the importance of that should not be underestimated. “We know that women and the female economy are vital to economic growth, so encouraging an environment which supports women on their entrepreneurial journeys must now be considered a global imperative,” King argues.