Only one-quarter of the UK's self-employed are women
The report - "Unequal entrepreneurs: why female enterprise is an uphill struggle" - blames the government for failing to support self-employed women.
It recommends increased government support for UK businesswomen, such as a National Centre for Women's Enterprise, and an Office for Women's Business Ownership under the auspices of the Department of Trade and Industry.
The report also calls for a "women's business charter", which would encourage better treatment for women from law firms, banks and financial advisers.
Unequal labour
Women business-owners tend to be younger than male entrepreneurs - 43% are under 44 compared with 30% of men.
The Industrial Society believes that this is a major disincentive to women who want to set-up on their own - only 26% of the UK's self-employed are women - and the number has hardly increased since 1990.
This is despite a greater number of working women, and the expansion of traditionally "feminised" service sectors.
Inferior position
Dr Eleanor Shaw of Strathclyde University said: "Most women hold low-paid, unskilled or semi-skilled positions, women earn on average 72% of male earnings and only 10% of the UK's 200 largest companies have female board members.
Women's experience of the labour market are a major constraint on their ability to set up their own business."
In contrast to the situation in the UK, business women in America have made a greater impact in recent years.
The proportion of women entrepreneurs has increased from just 5% in 1970 to 38% of all small business in 1999.
American businesswomen now account for $2.3 trillion in sales and employ 23.8 million employees.
Predictions suggest that by 2005 there will be 4.7 milion self-employed women in the US - an increase of 77% since 1983, compared with a 6% increase in self-employed men.
American women have also broken into non-traditional sectors, such as construction, wholesaling and transportation.
For example, between 1987 and 1992, the number of women-owned business operating in construction grew by 94%.
Will Hutton, chief executive of the Industrial Society said: "In the British labour market, women are still second class citizens... Less well documented is the discrimination women entrepreneurs encounter when it comes to establishing themselves in business."