Entrepreneurship is a powerful driver of economic growth, and as we explore in this episode of the INSEAD Explains Entrepreneurship series, also plays a vital role in finding new solutions to complex sustainability and social challenges. 

Kaisa Snellman, Associate Professor of Organisational Behaviour and Associate Dean of Diversity and Inclusion, points to notable examples in practice, such as how Impossible Foods has made plant-based alternatives mainstream or how Zipline achieves social impact by using drones to deliver medical supplies to remote areas in Rwanda and Ghana.

Entrepreneurship can also foster more flexible work opportunities and challenge traditional industry practices. Yet despite these potential benefits, Snellman highlights how the entrepreneurial journey is susceptible to bias at every stage. This can range from investors asking male and female founders different questions to who receives bank loans. First-time founders from certain demographics can also struggle with network access, particularly those who lack connections to investor circles.

For example, in the United States, female founders received only two percent of venture capital funding in recent years. These numbers don’t necessarily reflect a lack of effort but could stem from systemic barriers to networks, early-stage capital and mentorship. Many promising entrepreneurs from underrepresented groups struggle to secure initial "family and friends" funding because of wealth gaps in their communities. Such biases create a vicious circle where early inequalities lead to missed opportunities. This in turn stops innovative solutions from reaching the market, further perpetuating economic inequalities. 

Investors must take active steps to address this by diversifying their networks and where they look for potential investments. They can reduce bias by standardising their evaluation processes, ensuring consistent questions and criteria for all founders. Critically, investors must actively challenge their assumptions about what a successful founder looks like. 

Tech platforms and digital tools are democratising entrepreneurship by enabling businesses to be started with less capital. When these barriers are removed, entrepreneurship can become a powerful lever for social mobility. Social enterprises, for instance, are directly addressing inequality through innovative business models, such as by providing affordable financial services to underserved communities. Ultimately, when diverse entrepreneurs succeed, they become role models for their communities and create lasting positive change.