Female entrepreneurs underrepresented in high-tech sector

In May 2008, the Centre for European Economic Research published a study analysing new developments in the high-technology sector. After years of decline, the ‘high-tech’ sector in Germany witnessed a number of business start-ups in 2007. However, female entrepreneurs remain underrepresented in the sector. To counter this trend, the study’s authors say that the natural sciences should be promoted among young women at school and university. This idea is supported by the social partners.

A recent study by the Centre for European Economic Research (Zentrum für Europäische Wirtschaftsforschung, ZEW) on developments in the high-technology sector in Germany in 2007 was published in May 2008. The study highlights the fact that a total of 248,000 new businesses were set up in 2007, representing a decline of 2% compared with 2006. This negative picture in terms of business creation, however, stands in sharp contrast to the latest developments in the ‘high-tech’ sector. In 2007, 19,200 business start-ups were recorded in this sector, constituting a 4% rise compared with 2006.

Female entrepreneurs in high-tech sector

The rising number of business start-ups in the high-tech sector can be attributed to the effects of the recent economic upturn in Germany. Nonetheless, the authors of the study stress the need to foster more business start-ups to sustain current developments.

In this context, the study reveals that female entrepreneurs in the high-tech sector are still greatly underrepresented compared with their male counterparts. According to the study, in 2007, only 8% of all business start-ups were undertaken by female managers or a team mainly consisting of female managers. A further 2% of business start-ups were headed by managerial teams with an equal number of men and women. The vast majority of high-tech business start-ups, however, were led by male managers or managerial teams consisting mostly of men (90% in 2007).

Most of the female entrepreneurs who launch a business in the high-tech sector choose to provide services. This preference is largely due to their educational background, with most female entrepreneurs in this sector having received commercial training or taken a similar university course. Male entrepreneurs, on the other hand, tend to have a technical qualification in natural sciences or engineering. The study found that the more profitable businesses in the high-tech sector, such as research-intensive businesses based on inventions in leading-edge technologies, are therefore mostly set up by male entrepreneurs.

Encouraging a greater proportion of female students to study natural sciences could also help to counter the lack of skilled labour currently affecting the high-tech sector (DE0707039I). An increase in skilled labour might, in turn, lead to a rising number of business start-ups. One way to create a new generation of high-tech entrepreneurs is therefore to spark greater interest in the natural sciences among schoolgirls and female students. A higher number of female entrepreneurs could ensure economic growth in the high-tech sector in the long run.

Social partners launch initiative for skilled labour

In May 2007, the German Confederation of Employers’ Associations (Bundesvereinigung der Deutschen Arbeitgeberverbände, BDA) and the Federation of German Industries (Bundesverband der Deutschen Industrie, BDI) jointly launched a new initiative (in German) targeting the lack of skilled labour. The initiative aims to encourage school and university students to take up studies in the fields of mathematics, computer sciences, natural sciences and technology. BDA President Dieter Hundt warned of the imminent consequences of a shortage of skilled labour in the high-tech sector, thus highlighting skilled labour as a prerequisite for innovation and growth in German industries. Mr Hundt emphasised that highly-qualified labour was needed not only by pioneering companies operating in the fields of nano and biotechnology, as well as information and communication technologies, but also in industries where developments require practical applications such as electrical, automotive and mechanical engineering, environmental technology and energy management. The Chair of the initiative, Thomas Sattelberger, added that the initiative seeks to inspire young people, particularly girls, to study related subjects.

In a press statement (in German), the Confederation of German Trade Unions (Deutscher Gewerkschaftsbund, DGB) also emphasised the need to better educate and train young people in order to counteract the shortage of skilled labour in the long run. According to DGB, while educational facilities such as universities and schools should be supported by increased financial investments, employers should also offer more training opportunities for young people, thereby increasing the pool of skilled labour.

Sandra Vogel, Cologne Institute for Economic Research (IW Köln)

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