On Female Entreprenuership

1/18/2026

Jungsuk Kim, a Professor at Sejong University in South Korea, presented at the January 15th ISSER conference on the following topic:  Innovation and Economic Growth in Middle Income Countries: A Cross-Country Empirical Analysis with Female Entrepreneurship. Her study examined 86 economies over an approximate 20 year period (2002-2021), and two types of entrepreneurship.  

Let me digress, because I didn’t even know there were two types!  For those interested, I learned there is:

• “Necessity driven” entrepreneurship (sometimes called “survival” entrepreneurship or “push” entrepreneurship because someone lacks better work options and may be unemployed, so they are pushed to start a business instead of pursuing a job at an existing opportunity)

• “Opportunity driven” entrepreneurship (there is an opportunity to start a business offering a product or service not offered or not offered in the way the entrepreneur envisions, essentially filling a gap or market need)

(I would put my mother and her business somewhere between “necessity” and “opportunity” because she left an existing job and practice, voluntarily, to start her own practice and improve her earning potential and autonomy by doing so. I’m not sure what this is called, but it seems like a combination of these two.)

Professor Kim examined female entrepreneurship in particular, and found that both opportunity driven and necessity driven entrepreneurship most definitely has a statistically significant impact on economic growth (I’m halfway through my AP Statistics course this year, so I hear those words, “statistically significant,” a lot).

However, Professor Kim found that in middle income countries, where there is less institutional support for women (for example, more limited access to obtaining start-up financing from venture based entities or private banks), this constrains the economic growth of those countries. This reminds me of the consistent theme in Why Nations Fail that unbridled entrepreneurship across the board is a key factor in countries’ economic expansion, growth and success. In contrast, a country’s political suppression of “creative destruction” does the opposite. Why Nations Fail describes “creative destruction” as not allowing entrepreneurs to be innovative and creative, and therefore not allowing them to destroy old and less efficient systems and ways of operating. This, Why Nations Fails says, stifles opportunities that make economic growth possible.

Professor Kim’s presentation showed her conclusions, finding that just a 1% increase in total female entrepreneurship activity results in an 0.11% increase in annual GDP growth. She also notes an 0.11% increase in GDP growth caused by opportunity driven entrepreneurship and a 0.2% increase from necessity driven entrepreneurship While .11% does not seem “statistically significant,” in the area of gross domestic product, seemingly minor increases such as these can have massive effects on an economy, especially over a long period of time. For example, over a period of 20 years or so, a country can improve its economic growth by about 2-4% and therefore increase its power, simply by supporting female entrepreneurs.

Cool!  Go Mom!!!!