Women and Entrepreneurship (Part II)

Does the subject of women’s entrepreneurship deserve separate consideration? Why does it deserve separate and specific policy responses, both from governments and from organizations such as the International Labor Organization? The concerns and needs of women entrepreneurs are distinct and need to be studied separately for two reasons:

• Women’s entrepreneurship constitutes an important untapped source of economic growth, often for gender-specific reasons, and
• The topic remains largely neglected. Mainstream research, polices and programs often do not capture data about women or take into account the specific needs of women entrepreneurs and potential entrepreneurs. And even where the issue has been studied extensively, the policy follow-up is often lacking.

These points are interconnected. Let’s consider them in turn:

Gender-specific policy issues

Many differences occur because women’s life experiences contrast with those of men in terms of the education they receive, their involvement with their families, the social spaces they occupy and the circles in which they mix.

The details differ around the world, but this is a universal phenomenon. As a result of their experiences, women may lack the confidence, skills and resources to successfully start and run a business.

Perhaps there exists a societal or cultural resistance to women in business. Perhaps the major issue is women’s traditionally more significant role relative to men in balancing work and home responsibilities, or women’s overlapping productive and reproductive roles.

Let me explore each of these:

Socio-cultural resistance to women in business

Such resistance may be well engrained in otherwise very different societies, at all levels of development, and the effects may begin from childhood.

Limited or inadequate access to education may limit a woman’s business potential, as may the notion that certain fields of endeavor are inappropriate or off-limits.

These attitudes may have a number of potential consequences. A woman may not consider business as a career option or may lack the confidence to start up and run a business. If she does start up a business, social attitudes may affect her choice of sector and her investment behavior.

The evidence indicates women-run enterprises tend to be smaller than those of men both in terms of employees and in terms of the presence and value of fixed assets.

Women’s enterprises also tend to be concentrated in low investment, less remunerative subsectors which build on traditional skills, while men’s enterprises tend to be concentrated in more dynamic subsectors. Lastly, women engaged in economic activities may not perceive themselves as “business women” and therefore may not register their business, thereby restricting access to business development services.

Balancing home and work responsibilities

Women’s potential in business is often limited by their traditionally (indeed, I would say universally) more significant role relative to men in balancing work and home responsibilities.

The demands of motherhood and the division of labor between men and women in the household may reduce the amount of time, energy and concentration women have to expend on their business.

Women may prefer businesses that maintain close links between the personal and business. Women may invest less in their business and more in their family than men.

On top of these differences (and perhaps reflecting them), laws that discriminate on the basis of sex — directly or indirectly — can be constraints on entrepreneurship. For example, in some countries women lack the legal status to establish a contract, represent themselves in legal cases and/or hold property in their own name.

A recent IFC Africa survey of legal and regulatory impediments to the growth of women’s enterprises illustrates this point. It found:

• Only 7% of the female respondents surveyed could own land
• Many women respondents lacked legal property assets to serve as collateral
• 30% of women operated their businesses from registered premises, as opposed to 51% of men.

At the same time, a legal framework that does not provide for the overlapping productive and reproductive roles of women may also indirectly discriminate against women. Laws can facilitate the ability of women to participate in the labor force, for example by ensuring equal treatment (and safety) in the workplace. Governments may also be able to address concerns such as the availability of affordable childcare.We need to encourage our governments to listen to the voices of women entrepreneurs, and to mainstream and incorporate a women’s entrepreneurial dimension in the formation of all entrepreneurship and small and medium-sized enterprise-related policies.

To do this effectively, they and the international organizations that assist them (such as the International Labor Organization, or ILO) need to improve the factual and analytic underpinnings of our understanding of the role of women entrepreneurs in the economy.

In short, gender-specific constraints to entrepreneurship require well-supported specific policy responses. These responses need to be both practical and political.

Women need targeted training in how to start, manage and grow their businesses. But they also must lend their voices to efforts to identify and address laws and policies that do not adequately consider the needs of women entrepreneurs and sometimes further exacerbate gender-specific constraints to entrepreneurship.

How can the ILO and IOE help?

The ILO is actively engaged in promoting women’s entrepreneurship globally through its program on Women’s Entrepreneurship Development and Gender Equality (WEDGE) within its Small Enterprise Development program.

WEDGE seeks to develop a knowledge base, innovative support services and products, and an advocacy voice for women entrepreneurs.

Employer organizations exist both to inform and advise governments and international bodies such as the ILO on appropriate policies, and to provide useful services to our business members. It is important that such services consider the needs of both women and men entrepreneurs.

I want to conclude with a quotation from The Economist magazine. “There is a saying that women must do twice as well as men to be thought half as good. Luckily, that is not so difficult.”