Efforts to promote female entrepreneurship are gaining traction, but significant challenges remain, especially in the male-dominated tech sector.

This article originally appeared in Moonshot.

While women-led startups are becoming more prevalent globally, they still make up only a small percentage of the total. Central and Eastern Europe stands out with the highest concentration of female founders in Europe, according to Statista.

A report by LSE Business Review sheds light on “borrowing discouragement,” a phenomenon where women-owned businesses hesitate to seek funding due to fears of rejection, even though there’s no evidence of gender bias from financial institutions. This reluctance is seen as a reaction to societal pressures rather than a flaw in the women themselves. The report highlights the importance of preparing future generations of women to navigate these barriers.

Educational attainment and financial literacy are identified as critical areas for improvement. A lack of confidence in numeracy and financial skills often undermines women entrepreneurs when applying for business finance. Despite similar performance levels, girls aged 9-14 show slightly less confidence in STEM subjects compared to boys, which can affect their future entrepreneurial pursuits.

The report also emphasizes the need for enhanced financial education in primary and secondary schools. Currently, only 1% of UK primary school teachers believe their students have adequate financial literacy. Without early financial education, many women may develop risk-averse attitudes and lack the confidence needed to pursue entrepreneurship.

Another significant challenge is the pervasive stereotype that business is inherently a male domain. The report calls for a concerted effort by policymakers, governments, and financial institutions to educate the public on the reasons behind the gender gap in entrepreneurship and to help build women’s confidence in this field.

Promoting successful female role models and fostering a culture of gender equality are also crucial. As Gen Z increasingly prioritizes gender parity in education and pay, there is a growing need to empower women from a young age. The World Economic Forum’s Global Gender Gap Report 2023 warns that it could take 169 years to close the global economic gender gap, though this timeline varies by region. For instance, Latin America might achieve parity by 2076, while East Asia could lag until 2212. The Women Entrepreneurs Finance Initiative estimates that fully supporting women entrepreneurs could add $5-6 trillion to the global economy.

Overall, addressing these issues is vital to closing the gender gap in entrepreneurship and paving the way for a more equitable and prosperous future.

Head over to Moonshot to see all the key findings and statistics.