Women entrepreneurship: a market worthy of attention

Entrepreneurial activity creates growth, prosperity and solutions for social problems. Today’s trends show the global rise of female entrepreneurs: women-owned entities in the formal sector represent approximately 37% of enterprises globally.  

Will women be a driving force of entrepreneurial growth in the future? Is it easy for women to start their own business in contemporary society?

The fact that women were always expected to take care of their children and parents, makes it much harder for women to take an active role in running a business even in the 21 century. Many nations have longstanding cultural traditions that discourage women from working outside the home and from taking leadership positions. For example, the Republic of Korea, for instance, has a very male-dominated business culture which is why women face significant hurdles in breaking stereotypes about them trying to lead a business activity today.  This problem concerns many emerging countries such as India, Brazil, Turkey and Egypt where education and training play an important role in improving the economic position of women. Sometimes it happens that the population’s mentality is not ready to accept the changing role of women (India, Turkey or Japan). 

Even in developed countries there is a significant number of barriers for female entrepreneurship, specifically, in gaining access to capital, technology, markets or winning government contracts.

For example, in the U.S. men receive venture capital funding more frequently than women. One of the key – problems of developing countries is that without having access to banking systems women can’t receive loans. Often they must get permission from a man such as their husband or brother. Sometimes this banking system doesn’t even exist. 

All these barriers slow down the global development of female entrepreneurship and make women think that they are not capable of launching their own business.

What are the main fears of women to become entrepreneurs?

Despite the fact that more than 126 million women were launching or running new businesses in 2012 in 67 countries, they seem to be less confident about their skills and capacities than men, according to the Global Entrepreneurship Monitor 2012 Women's Report.

Being generally more afraid of failure than male entrepreneurs, women are more careful in taking risks which could be necessary for successful business. Some of the most developed regions, including Asia and Europe, have the highest levels of fear of failure. Why? It can be explained by the high level of risk that a woman takes starting her own business. When a woman has the choice between being an employee, especially when it goes with an attractive salary, job stability and other benefits, she has a lot of things to lose by entering entrepreneurship. In addition to that women are perfectionists and sometimes they underestimate their skills and talents. However the situation is not the same in different countries. 

For example, female entrepreneurs in sub-Saharan Africa have more confidence in their capabilities. For out of five women in such countries as Ghana, Malawi, Zambia, Nigeria and Uganda consider that they have all skills which could be necessary to launch their own business, according to the report. Their confidence is explained partly by direct interaction with other women entrepreneurs of the region, knowing that support and mentoring of role models are very important for women in launching of new activities. Meanwhile the typical business started by female entrepreneurs in these countries is often a small, consumer-oriented business with a few employees. Consequently the understanding of possible problems and the skills necessary to running successful businesses in African countries are not the same comparing with those of developed west regions where entrepreneurship requires more innovation, financial and technological resources. 

Global Entrepreneurship and Development Index (GEDI) presents the first Female Entrepreneurship ranking by country

The index is made up of 30 indicators and ranks 17 countries. These indicators of female entrepreneurs' success are connected not only with their personal strengths and aspirations, but with the environment in which they operate. 

The leader of the ranking is the U.S. thanks to their good institutional foundations and a strong entrepreneurial environment. Other top-ranking countries include Australia (No. 2), Germany (No. 3), France (No. 4), Mexico (No. 5) and UK (No. 6). Despite India’s recent economic growth, it ranked only No. 16. The same is true for Brazil with the 14th place. South Africa is at the 7th place, followed by China (No. 8) and Malaysia (No. 9). Other rankings include Russia (No. 10), Turkey (No. 11), Japan (No. 12), Morocco (No. 13), Egypt (No. 15), and Uganda (No. 17). 

Alena Z.