With support from the United States Department of Agriculture, WVU researchers are looking at why entrepreneurship among women and minorities lags, especially in rural areas. (WVU Photo/David Malecki)

WVU researchers investigate barriers to entrepreneurship among women and minorities in rural areas

Self-employment and entrepreneurship rates among women and Black people lag behind those of white males, especially in rural areas. Supported by the United States Department of Agriculture, West Virginia University researchers aim to understand why.

The research, led by Heather Stephens, professor of resource economics and management and director of the Regional Research Institute, seeks to identify factors that support entrepreneurship for women and minorities, as well as barriers that hinder them from starting businesses. The project is a collaboration with Daniel Eades, a WVU Extension specialist in rural economics. The results will help local and regional economic development professionals establish policies and programs to facilitate success for these groups.

For the first part of the study, Stephens, postdoctoral fellow Xiaoyin Li, and a team of RRI PhD students from economics and natural resource economics collected and are analyzing county-level data.

According to Eades, the research findings will be translated into fact sheets and training materials for local policymakers and practitioners in rural entrepreneurial development ecosystems. This includes educators in Extension, business incubators, regional economic development agencies, financial service providers, and chambers of commerce.

“We’ll engage with these folks not just as end users but as experts in their own right,” he said. “They will help us better understand the findings and revise curriculum and outreach materials so they are easy to understand and can serve as useful tools to help affect change in local economic development policy.”

Evidence suggests small employers are more likely to buy locally and reinvest their earnings into the economy. Self-employment decisions for women and minority groups may differ from those of white men. For example, for women, self-employment may provide workforce entry while offering flexibility with home or family obligations.

“There’s been some research that suggests women entrepreneurs or self-employed women aren’t as successful as their male counterparts,” Stephens said. “So maybe we need to measure success by different metrics. Maybe things like flexibility and child care availability would be part of their success.”

“The previous research has not closely examined rural self-employment, especially for women or minorities. Thus, rural communities don’t yet know how they might help women or minorities start businesses or what factors might be more important.”

One challenge may be that in areas with historically large employers, such as mines, residents may lack an entrepreneurial mindset.

“This is important because if people could use their skills to start a business that could fill a gap in their community, provide income, and increase tax revenues, we might see economic growth in rural places,” Stephens said. “I’m excited about developing tools that will give local communities some answers about what they might do differently.”

Eades noted that economic development has traditionally been seen as a zero-sum game, where communities benefit by being the cheapest place to do business.

“In our view, entrepreneurship and local business development can change that narrative,” he said. “It’s about leveraging community skills and assets and viewing challenges as opportunities for change. It’s not about taking more of the pie; it’s about making the pie bigger for everyone.”

WVU is collaborating with colleagues from Penn State University and the University of Maine on the project.

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