Equality

Why more entrepreneurial diversity is crucial for the Nordics

Nevertheless, Nordic investors spend 92 out of 100 euros on male entrepreneurs.

- It is important that we change this quickly, not least for the sake of the green shift, says Hege Guttormsen.

- The great lack of equality among entrepreneurs, weakens innovation and competitiveness, says Trine Moa.

They are both a part of the Nordic Innovation Diversity Task Force, which was started in 2019. This is an initiative from Nordic Innovation, and it consists of members from the Nordic innovation organizations, the Nordic Council of Ministers Secretariat, and their office in Latvia.  The task force works to promote diversity in the entrepreneurial ecosystem in the Nordic region.

Hege Guttormsen and Trine Moa holding a presentation at the Nordic Energy Equality Conference

Heads the wrong way

Increasing diversity among entrepreneurs has proven to be demanding. In fact, the development has gone in the wrong direction. In 2016, 1.2% of Nordic investments went to all women entrepreneur teams. Four years later, the share was almost halved to 0.7%.

- Many people are shocked when they hear the numbers, because they are used to the Nordic countries being far ahead when it comes to gender equality, says Trine Moa.

In many other areas of society, the Nordic region is among the best in the world when it comes to gender equality. The World Economic Forum has created a gender equality index, Global Gender Gap Index rankings. Year after year the Nordic countries are at the very top. But when it comes to entrepreneurship the story is a very different one.

- It happens that other countries and regions in the world reach out to us. They assume the Nordics are ahead when it comes to diversity and entrepreneurship. They are surprised when they understand that there are many countries doing far better than Nordics, says Hege Guttormsen.

Men bet on men

To increase diversity among the entrepreneurs, the Task Force focuses on the entire entrepreneurial ecosystem.

- Also among investors, there is a large predominance of men. And the male investors have a greater tendency to invest money in projects lead by men, says Trine Moa.

Surveys shows that women have a longer and heavier way to get support to start new businesses.

- Women must go more rounds than men to get investors on the team. In many ways, the eye of the needle is narrower for women. But that can only explain some of the very low proportion of female entrepreneurs, says Trine Moa.

Another contributing factor may be the lack of role models and networks.

- When there are few female founders in the first place, there are also fewer role models and networks. If we increase that share somewhat, one can hope this will be easier, says Trine Moa.

Discussions with Trine Moa and Hege Guttormsen at the Nordic Energy Equality Conference

Importance to the green shift

The great lack of diversity among entrepreneurs is surprising in several ways. Studies show that female entrepreneurs do better than men. The report Unconventional Ventures-Nordic Startup Funding (2020) states that the difference is significant: «Female founded companies perform 45% better than male founded companies when looking at revenue to funding ratio».

Increasing the proportion of women among founders is important for another reason. It turns out that men and women tend to start quite different types of companies.

- Men dominate the start-up of tech companies, while women more often start companies related to for example health care and education, says Hege Guttormsen.

When it comes to sustainability and the green shift, women can play a key role. Women and mixed gender entrepreneur teams turn out to have a 73% greater chance of start companies that have a positive impact on the sustainability goals. This according to «The Startup Funding Report» from 2021.

- If we are to succeed with sustainability, more diversity is necessary, says Hege Guttormsen.

Changing the entrepreneurial ecosystem

The Nordic Innovation Diversity Task Force works to gather and share information about the Nordic entrepreneurial ecosystem. A second area is making analyzes and reports to provide insight and understanding of the biases that exist and what can be done. A third focus area is policy making.

- We have close contact with many organizations and government agencies in the Nordic region that work with innovation, says Trine Moa.

An important goal is to contribute to policy development, and the task force have been in in contact with EU bodies for innovation.

- We look forward to contributing to developing new policies, aiming to bring more diversity into entrepreneurship. We need that to ensure competitiveness for the Nordic countries and to accelerate the green shift.

- It is important to bring more awareness and focus on the importance of diversity. We need to motivate everyone who works with start-ups and investments so that changes can take place, says Hege Guttormsen.

- We need to make changes quickly. We need a lot of innovation to succeed with the green shift, and we need greater diversity to ensure more competitive and greener companies, says Trine Moa.

Contacts

Portriat of Trine Moa

Trine Moa

Senior Adviser Strategy and Governance
Trine has more than 14 years of experience working with strategic planning, developing and implementing methodology and tools for results management, evaluation and learning, with an innovative and solutions-oriented approach to her work.

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Hege Louise Guttormsen - Higher Executive Officer

Hege Louise Guttormsen

Higher Executive Officer
Hege began working at Nordic Innovation in January 2022 after finishing her internship there. Her focus areas include circular business models; mobility and connectivity; as well as Nordic Innovation’s Nordic Task Force for Diversity. She holds a master’s degree in international relations and has previously interned at the Norwegian Consulate General in Mumbai and Lightup Norway.

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Marthe Haugland Senior Innovation Adviser

Marthe Haugland

Senior Innovation Adviser
Marthe combines her international experience with her knowledge of business development and innovation to promote Nordic cooperation within the circular economy. She belives Nordic cooperation can drive the systemic change and give Nordic companies a competitive edge going forward.

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