Women Entrepreneurship: Transforming from domestic household to financial independence
Relevance: Sociology: Women Empowerment: Role of women In Economy; Patriarchy and sexual division of labour; Education Social Change; marriage and family: Changing family structure; & G.S paper I: Society and social Issues: Role of Women in Economy
Context:
Dubai and UAE are committed to engaging women and DIFC FinTech Hive has a women-only accelerator programme – AccelerateHer. This mentorship programme is aimed at equipping budding female professionals with necessary tools and experience to become more active in the region’s fintech landscape development. Research, she however, concedes, indicates that women remain significantly under-represented in the upper levels of financial services. AccelerateHer is designed to fill the gender gap and attract young female talent to a diverse range of experiences.
Introduction
Due to expanding economic opportunities over the past 30 years, many female workers have been drawn into the labor market and thus women’s labor force participation increased. Women made up more than 40 percent of the global labor force by the year 2008 (World Bank 2011a).
Nonetheless, in the current established economic environment, women perform 66 percent of the world’s work, produce 50 percent of the food globally, but earn only 10 percent of the income and own 1-2 percent of the property (UNICEF 2009).
Differential patterns of access for women and men to land, capital and training tend to be influenced by gender roles, norms and biases in institutions (UNIFEM 1999). Throughout the globe, discrimination against women and the non-recognition of the value of their contribution to society has been common. When laws reinforced traditional prejudices, this resulted in women’s having less access to resources, credit, education, employment, decision-making positions, and thus lower income (Walters, Mason 1994).
Gender-based stereotypes in business limit opportunities for women. Also women’s abilities and potentials are not optimized enough to enable them to make full contribution. There are many stereotypic beliefs in the workplace that pose an invisible threat to women leaders. When people commonly talk about effective leadership, according to gender stereotypes, women are seen as lacking leadership qualities (Catalyst 2005).
Female talents are shifting to entrepreneurial activities and leaving organizations. Some of the reasons for this shift are limited upward mobility for women within corporations and unequal rates of pay. Also, it is a fact that women are able to manage independent-care responsibilities more effectively with a greater flexibility in a private business (Catalyst 1998).
Thus, they are not leaving companies to stay at home and take care of children but they are leaving companies to work in private sector or to pursue their own entrepreneurial goals. New and small businesses are increasingly being appreciated and recognized for their importance in the economy worldwide. The fact that entrepreneurs and new businesses being established by women can be a significant driver of improvements in the welfare of society is gaining acknowledgment among economists, academics and policy makers.
According to ILO (2008), where women entrepreneurs have been identified as a target group for specific policy measures, women-owned firms are increasingly becoming important source for economic growth and employment. Nevertheless, according to the findings of Kelley et al. (2011), women’s participation in entrepreneurial activity varies widely around the globe. Although many economic opportunities are opening for women in the marketplace and in the area of entrepreneurial activities, they are still facing many challenges. In our opinion, only when women achieve equality of access and opportunity they will realize their full contributing potential to economic and social well-being. When women have more voice, they can drive institutional investments in a way that favors children. Thus, when women have more rights in the political arena, the nature of public investment itself also changes (World Bank 2011).
- Gender equality and women’s empowerment
Gender is clearly a social construct. To Mayoux and Mackie (2009), gender inequality cannot be determined by biological differences; this is not enough to determine gender inequality. The fact that the forms and justifications for gender inequality vary according to the context – inequality is built socially through gendered power relations. In addition, gender is not just related to women; it means both women and men. Both genders are affected by gender-based discrimination. However, through most statistical data it is justified that women are less advantaged and most discriminated. Genders are different in their ability to make effective choices around the world, yet, women are still at disadvantage.
According to Stearns (2007), it is not easy to define which gender system promotes the status of the women. Nevertheless, the author argues that only during the hunting and gathering period both genders contributed with important economic assets and there was considerable gender equality. However, this equality turned out to be unbalanced as other systems transformed the role of women into a more decorative and domestic one. The present historical moment may bring women’s economic participation back to appropriate level closer to men’s thus bringing greater balance and equality between genders.
As social barriers against women entering paid labor force regain prominence, their participation rates fall. Nevertheless, as countries develop, advancements in women’s education and wages move them back into the labor market. Over time, women’s employment has also been driven by changes in education and family structure. More women have been brought into the labor market by lower fertility rates and delays in the timing of marriage and childbearing. In the labor market, women are more active than ever.
Much of the progress for women has been driven by economic growth; through higher household incomes, better service delivery, and new labor market opportunities. Women have had impressive gains in rights, educational attainment, health outcomes, and labor force participation across countries but have not yet reached satisfactory levels.
Kabeer (1999) defines women’s empowerment as women’s ability to make strategic life choices where this ability had been previously denied. Women are still economically and socially disadvantaged in many countries, so the promotion of gender equality and empowerment of women is one of the United Nation’s Millennium Development Goals.
The World Bank (2011) also presents the necessity to seek gender equality in order to enhance productivity and improve development outcomes, highlighting gender differences in employment, access to land and credit, and access to networks and its impacts towards entrepreneurship. A fundamental reform of policies both on a national and global level is necessary for addressing remaining economic and social inequities.
- Gender and entrepreneurship: women’s enterprise development
Entrepreneurship, defined as the resources and processes which individuals utilize through opportunities in the market by the creation of new firms is a relatively new concept (Naudé 2010).
Greene et al. (2003) in their overview of research and theory on women entrepreneurs, point out that the first publication focused on women entrepreneurs was in 1976 from Eleanor Schwartz.
An obstacle to understanding the challenges to women’s entrepreneurship and their impact on economic growth is still scarce in the realm of reliable and valid data. Although entrepreneurship and the gender system have been widely researched, they have been mainly researched separately.
Women’s entrepreneurship has had relatively little attention, but gender system plays an important role in shaping entrepreneurship, economic growth and all other sections of society.
According to the ILO (2009), enterprise development can make a significant contribution to women’s empowerment and gender equality and has a key role in gender strategies.
There are three phases of enterprise development: Micro – often not registered; Small – usually registered, with a few employees; and Medium – beyond self-employment.
Lamy (2012) points out that access to more and better-paying jobs for women can come when women’s business enterprises (WBEs), i.e., enterprises run by and employing women, enhance their participation in the international economy. Achieving gender equality brings along positive developmental benefits. It is necessary to generate more and better economic opportunities for women to reap the maximum benefit from WBEs. By doing this, it is possible to improve societies and enable women to play a more central role in the global economy.
In general, in terms of entrepreneurship, the literature found is about information on the similarities and differences between men and women’s characteristics, attitudes, values, beliefs, aspirations, reasons to start a business, business goals, barriers and challenges, motivations and expectations, management styles, and stereotypes towards entrepreneurship. There is also literature referring to societal attitudes and their impacts over male and female entrepreneurial activities.
And also on how entrepreneurship is basically perceived in two ways: promoted by the necessity or by the opportunity. To the World Bank (2011), people see female entrepreneurs more as “necessity” entrepreneurs (who view entrepreneurship as a last resort) and less as “opportunity” entrepreneurs.
However, one may not overlook that entrepreneurship is about identifying and exploiting the opportunity. If people believe that they have the skills to exploit the opportunity, then the engagement in entrepreneurship happens (OECD 2004). Academic studies draw differences between men and women’s characteristics varying from the propensity to start their own firm, lack of business training or experience, leadership style, and barriers such as access to land-ownership and credit.
A major barrier is access to credit, and as women tend to start small firms, they tend to seek small personal loans. As the profit margins are too narrow, banks are reluctant to grant credits or offer microcredits (Jalbert 2000).
While female entrepreneurship is rising as a significant economic activity, some authors (Moore and Buttner 1997, Catalyst, 1998, Sharp 1999) state the reasons for women to leave the corporate world to establish their own businesses. Barriers such as the “glass ceiling” phenomenon, lack of flexibility and control, not fitting in the corporate culture and discrimination are mentioned as reasons for making this leap to the entrepreneurial world.
The importance of strategic objectives to promote women’s entrepreneurship is stressed by ILO (2009). They include removing barriers to start-up and growth; improving access to markets; improving access to resources; strengthening social inclusion; and fostering a supportive climate and culture. Enterprise development is emphasized by ILO (2009) as an agent of significant contribution to women’s empowerment and gender equality.
Part of overall impact of women on society today is due to their increasing role as business owners, which makes them a vital economic force. According to Kelley et al. (2011) in 2010, 104 million women in 59 economies—which represent more than 52 percent of the world’s population and 84 percent of world GDP – started and managed new business ventures.
These women entrepreneurs made up between 1.5 percent and 45.4 percent of the adult female population in their respective economies. Another 83 million women across those regions ran businesses they had launched at least three and a half years before.
Together, these 187 million exemplify the contribution women make to worldwide entrepreneurship and business ownership. Although entrepreneurial activity among women is highest in emerging economies (45.5 percent), the proportion of all entrepreneurs who are women varies considerably among the economies: from 16 percent in the Republic of Korea to 55 percent in Ghana–the only economy with more women than men entrepreneurs.
Fenwick (2000) highlights fundamental differences between women’s entrepreneurship and men’s entrepreneurship. What makes women’s situation special is that they are shaping new models of leadership, experiencing unique processes, values of work and family, and the personal dynamics of change with the processes of developing and leading their businesses.
- Shared value creation
Few academic works were found relating female owned businesses to shared value creation and generally they are under other big umbrellas, such as health or nutrition issues. Shared value studies are about main topics such as healthcare, poverty relief, nutrition, environmental sustainability, education and rural development. Some women issues are included in these topics. Until the present moment, we could not find articles correlating the topic of this research: women’s enterprise development and shared value creation. This posed a limitation for the study and comparisons could not be made, and we could not adapt or reduplicate previous applied methodology, either. However, Fortson (2003) refers to studies according to which women invest 90 percent of their income in their households, as opposed to men’s 30-40 percent. Moreover, Terjesem and Elam (2012), point out the particularity of women entrepreneurship because of different goals, access to resources, family responsibilities and business credibility combined with the available opportunities.
Added to the gender issue and to entrepreneurship, another concept central to this paper is shared value creation.
The shared value concept was introduced in 2006 and was expanded in a more recent article pointing that shared value is about creating new economic and social value for business and society.
According to Porter and Kramer (2011) it is about examining economic and social linkages in order to create economic and social benefit (rather than distributing existing value). Shared Value is an approach to meeting business objectives that create a competitive advantage for corporations through innovations that address needs and challenges of the society. The authors state that the connections between societal and economic progress are the main focus of the concept. Companies are more aware that long-term success can be achieved through the creation of the same value for shareholders and the community in which they operate. In order to maximize shared value, Hills and Pfitzer (2012) state that companies should examine how long-term competitiveness can also help address critical social problems. It is necessary to understand why a company should be concerned about what happens to the communities in which they operate, and the impact of its operation.
By incorporating social issues into the core business strategies to benefit society and business long-term competitiveness, such companies seek to create shared value.
In addition, to Porter and Kramer (2006) the idea that both business decisions and social policies must follow the principle of shared value is an implication of the mutual dependence between corporations and society. A business will find itself on a dangerous path if it pursues policies that just benefit its own interests at the expense of the society, and vice-versa.
Porter and Kramer (2006) argue that corporations must redefine their purposes towards the creation of shared value, not just profit per se. Companies must reconnect business success with social progress, reconceiving the intersection between society and corporate performance to create shared value. The authors also believe that companies need to avoid short-term actions that are environmentally wasteful and socially detrimental, therefore investing in long-term economic performance.
Women’s economic and non-economic rewards are more likely to be shared with other people. Besides, women are more likely to work for and buy for the community. Especially in countries that are about to exponentially increase the impact of new venture creation, investment in women’s entrepreneurship is critical. In order to obtain more sustainable and successful economic development in all countries, finding ways to empower women’s participation and success in entrepreneurship is very important.
Women’s empowerment, if understood as investment concept, can bring long-term value creation and better investment performance (Keefe 2011). Moreover, what is known about women in the economy today is that women-owned business enterprises are among the fastest-growing segments in many countries.
To tackle this disparity, WEConnect International is promoting equal access and opportunity for them to compete, instead of implementing quotas. Large organizations tend to engage with a limited pool of vendors, which excludes qualified women-owned businesses, therefore, missing out on cost savings and profit, and possibly on some important innovations.
The WEConnect International initiative aims to locate women-owned businesses, certify them and introduce them to business opportunities, besides developing their capacity to compete. Women business owners play a powerful role in driving innovation, increasing competitive advantage, accelerating growth and raising profitability, and nowadays this is more and more acknowledged (WEConnect International 2013).
- Conclusion
When it comes to women’s economic opportunities, the country’s social attitudes and customs should be taken into account, not only the laws. Considering this, one can still see that women’s participation in the formal labor force remains well below that of men.
Men continue to dominate in sectors with higher wage-earning potential, such as technology and finance, whereas women are paid less than their male counterparts. Enterprising women encounter gender specific obstacles such as access to finance and credit, to market opportunities, to business education and specific management training, and the opportunity to be the owners of the land in both developing and developed countries, in spite of their great potential to expand their businesses.
Where entrepreneurship is important and opportunities are abundant, all members of society will profit. Hence encouraging entrepreneurship in general is crucial to women’s entrepreneurship. The important role which women entrepreneurs play in the entrepreneurial economy is due to both their ability to create jobs for themselves and to create jobs for others. Women’s entrepreneurship is about the role of entrepreneurship in a society as well as about women’s position in that society.
Although across countries there are many women entrepreneurs, they are far from being a homogeneous group, and nowadays their global impact is just beginning to gain intensity. More and more small and medium enterprises are female owned and they engage in international trade which will be a strategic source of economic growth and development in the world economy of the 21st century.
Moreover, supporting female entrepreneurship by creating more means to access capital and land, education and training, and business market opportunities can impact on women’s economic empowerment resulting in female businesses development. In terms of research, the gender and shared value framework has not been explored and, as seen, further studies need to be developed.
Achieving gender equality and empowerment, encouraging women’s enterprise development and creating shared value could be the gateway for numerous social-economic new possibilities for society’s challenging environment. One might say that there is a gender impact on entrepreneurial activities and this can lead to development and economic growth. Although there is still a gap between the potentiality and what happens in the reality, progress has been made towards gender equality.
The current 21st century seems to bring new challenges and female entrepreneurship will certainly have a pronounced presence in the next decades. It is the beginning of a big transformation, perhaps towards gender equality, boosted by the importance of new roles attributed to men and women.
Some countries such as the United States and Canada have managed to put gender issues at the governmental agenda. Female entrepreneurship can be one of the keys to consistently open doors for women’s empowerment and advance.
As a consequence, through their more active economic participation, there will be a greater social impact as diversity comes along, innovation is accelerated and wealth is generated for the marketplace and the society.
Women-owned businesses are shifting from economically insignificant to growing contributors to the economy, so it is time they were perceived accordingly.
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