Women Entrepreneurship: A Global Perspective
The number of
women entrepreneurs is increasing all over the world but the entrepreneurial
ventures in developing countries are quite low compared to the developed
countries. Women entrepreneurship is growing at a faster pace in countries like
U.S, U.K and
as an economic activity is largely dominated by men all over the world (Minniti
et. al., 2004). In recent years due to the change in economic and social
environment there has been an influx of women entrepreneurs (Adler, 2004).
Although there are no official statistics relating business to the gender of
their owners, there is a good deal of evidence to suggest a significant
increase in female entrepreneurship (Centre for
world, women-owned firms typically comprise between one-quarter and one-third
of the business population (Trieloff, 1998). Women entrepreneurship is growing
faster in developed countries than in developing countries. They are growing
very fast in developed countries like the U.S, U.K and Canada where 30 percent
of all small companies are women-owned and it is being contemplated that if
women continue to grow at the same pace then very soon their percentage will
rise to 50 percent (Peacock, 1998; Kelly, 1996; Jung, 1997; ‘Women wanted’,
1996; Cachan and Carter, 1989; OECD, 1993; Brush and Hisrich, 1991). However
not all developed countries have shown high growth rate. The Scandinavian
Women in developed countries with higher education tend to start business late in life than women in developing countries who are less educated or are illiterate(Minniti et al, 2004). Studies have found that women in developing countries start business in their late twenties and early thirties whereas women entrepreneurs in developed countries start business in their late thirties and early forties (OECD-report, 2004).
empowers women and gives them the opportunity to earn their own livelihood.
Earlier many women with higher education and academic degree did not consider
entrepreneurship as a career opportunity because education gave them access to
more interesting and better-paid occupations (Global Entrepreneurship Monitor
Report, 2004). They preferred
employment to entrepreneurship. Nowadays with changing times educated women
especially in developed countries are giving preference to entrepreneurship (United Nations, 2000). Exceptions are
In studies conducted so far no generalization has been made regarding the family background of women entrepreneurs. They seem to be coming from mixed background. In fact there was a time when women were not welcome in family businesses at all, except as office workers (Knight, 1989; Hugron, 1989). But gradually things are changing and now we find daughters and wives rise to leadership positions in family firms and daughters taking over businesses in traditionally male-dominated fields (Nelton, 1998). Godfrey (1992) in his study has suggested that family is a fertile training ground for subsequent business ownership and this is being witnessed in developed countries where there has been a marked growth in the second generation female entrepreneurs. Women who have been in business for many years are now encouraging their daughters to take over the businesses (Genasci, 1995).
Studies have shown that most people start firms in industries where they have worked previously (Bruderl et al., 1992). Men often have experience in manufacturing, finance or technical areas. Women in contrast usually have administrative experience, which is limited to the middle-management level, often in more service-related areas as education, secretarial work, or retail sales (Hisrich and Peters, 1995). In developing countries in particular women often enter business without prior experience (Watkins and Watkins, 1988). On the other hand in developed countries a high proportion of women entrepreneurs enter business with past experience.
World over women
employ less start-up capital as compared to men (Verheul and Thurik, 2001).
Often, starting a business is less expensive in developed countries than in
developing countries as they have a better physical infrastructure and more
advanced capital markets (Bygrave and Hunt, 2004). Majority of the women
entrepreneurs provide all the required start-up capital themselves therefore
most of them rely on personal and family savings or borrowings from friends and
relatives (Hisrich and Peters, 1995). Very few take bank loans.
Size and Growth
entrepreneur have always been characterized by small company size (Kirsi,
2005). Firms owned by women are significantly more likely to have no employees
compared to firms owned by men (Franco et al., 2002). Most enterprises are run
by them single handedly or with the help of their family members (Bezhani,
2001). The number of additional jobs that a business expects to create is an
indicator of the growth of business. Women entrepreneurs are expected to create
no jobs or 1 to 5 jobs within a 5 year period (OECD-report, 2004). Even if they
employ they employ cheap women employees, working part-time, who consequently
have few rights in terms of employment protection (Goffee and Scase, 1985). Women
entrepreneurs have little interest in expanding their business. However women
entrepreneurs are expanding their business in countries like US,
Women in general are predominantly into conventional entrepreneurship which means that they tend to create businesses in service sectors where they are already economically active as managers, owners or employees (Anderson and Woodcock, 1996). However there are a few women who have rejected to be conventional. They are the radical women entrepreneurs who are the elite women in the cities are highly educated and have acquired technical skills (Vinze 1987). They are moving rapidly into fields that have been traditionally male dominated such as production, construction, computers (IT), electronics, bio-technology and stock exchange (Tulsi et. al., 1995; Bennett and Susan, 2000). Women in these non-conventional fields are doing well and in some cases doing better than their male counterparts. In fact the top growth industries for women entrepreneurs in the US have been construction, wholesale trade, transportation, communication, agri based business and manufacturing firms (National Foundation for Women Business Owners, 1997). Thus conventional women entrepreneurship is mostly found in developing countries and the radical women entrepreneurship is mostly found in the developed countries.
Women in developed countries face less competition than women in developing countries. This is because women in developed countries pursue opportunity entrepreneurship. Businesses created to pursue opportunities rather than out of necessities tend to be in newer, growing markets and tend to adapt newer technologies thus reducing competition for women entrepreneur (OECD-report, 2004).
For women the choice to start a new business is often linked to financial security (Lisowska, 1996) and flexibility of time (Welsch and Pistruti, 1994; Gundry and Ben-Yoseph, 1998). Women are found in two types of entrepreneurship -Opportunity Entrepreneurship and Necessity Entrepreneurship. In opportunity entrepreneurship women choose to become entrepreneurs because they see better opportunities like growth, independence and work satisfaction in an entrepreneurial venture (Beegam, 2006). They are more likely to be motivated by non market factors such as ambition, family events or chance, family role models (Oconnor and Humphreys, 1988) frustration with the present job, dissatisfaction with the way men are running business, market gaps and the challenge of doing business (Vokins,1993; Storey and Strange, 1993; Anderson and Woodcock, 1996).
On the other hand in necessity entrepreneurship women are forced to take up entrepreneurship as they do not have any other means of livelihood. In developing countries where people are living in extreme poverty and there are no means of livelihood entrepreneurship is seen as the only solution to their problem. In these countries it is not the aspiration of women that turn them into entrepreneurs. They take up this career in the absence of other means of contributing to family income (Karim, 2000). Most of them start business only after all their attempt to secure a regular and salaried job fails (Jacob, 1998; Jyothi and Prasad, 1993). Thus opportunity entrepreneurship is more widespread among women in developed countries and necessity entrepreneurship is more widespread among women in developing countries (Minniti et al 2004).
Gender plays an important role in the choices made by entrepreneurs. In most countries
Men are widely believed to be more competent than women, except when performing
Feminine tasks. Substantial evidence indicates that entrepreneurship is stereotypical as a
masculine task (DiMaggio, 1997; Holmquist et al., 2002) therefore woman’s task is often
defined on the basis of her gender. She starts and manages firms in areas different
from men (Duchenaut, 1997; Franco and Winqvist 2002; Reynolds and White 1997).
Countries where opportunity based entrepreneurship is
practiced seem to have less gender gap. These are the developed countries where
due to targeted programs, cultural changes and entrepreneurial education women
are getting equal opportunity as men. However there are exceptions in this
regard. Developed countries like
Occupational closure is defined as the de jure or de facto exclusion of specific groups of people from particular line of work. De jure occupational closure is almost negligible in developed countries but is quite prevalent in developing countries. In some of the developing countries a strong legal prohibitions still prevail on women entering particular professions and occupations. Hence women are not provided equal opportunity to develop their technical skills as they work with their male colleagues. By confining women’s roles in economic development or by hindering access to occupations governments indirectly discourage entrepreneurial behaviour. De facto occupational closure is found both in developed and developing countries. In developed countries though there are no legally endorsed occupational closure, occupational segregation still exists on gender basis. This affects women’s ability to start and manage firms. Women world over do not have easy access to top management position. Glass ceiling is a phenomenon experienced by women both in developed and developing nations. This obstructs women to develop high quality management experience and professional network.
Women entrepreneurs all over the world find it difficult to balance work with family. Their career is considered secondary to that of their husbands (Brannon, 1999). As they play multiple roles they are also left with less time to devote to business (Lisowska, 1996). Their duties are given priority as a wife, mother, daughter-in-law and daughter of the family. Duties as owners of small business come last in order of priority. Trying to cope up with the home front and work units is exceptionally demanding (Rao and Rao, 1985).
Balancing work and family is very important for women entrepreneurs all over the world and the role of family policy has been identified as very crucial in this regard. It is understood that with greater availability of child care facility women will tend to increase their time for participation in entrepreneurship. The developed countries in comparison to the developing countries have been more forthcoming in formulating family policies. However the child care facility in the developed countries has had a negative response. It has been found that the Scandinavian countries (Finland, Denmark and Sweden) (Kirsi, 2005), which have low women entrepreneurship provide universally the child care and maternity benefits to their women, whereas countries like US, Australia and the UK which have high level of women entrepreneurship, neither provide government aid nor have adopted policies that guarantee access to child care. Thus instead of being a facilitating factor family policy in these countries have become an obstruction in the growth of entrepreneurship. High levels of child care provisions often accompany high levels of women’s employment but low levels of women’s entrepreneurship.
psychological factors often pose insurmountable obstacles for women even when
credit, capital and skills are made available to them (Sasikumar, 2002). The
subjective perception about one’s own skills, likelihood of failure and the
existence of opportunities are all highly and significantly correlated to a
woman’s decision to start new business (Kollinger et al., 2004). Studies have
indicated that subjective perception of available opportunity has been a
crucial component in starting new venture in developed countries than in
developing countries. Likewise the subjective perception of having sufficient
skill has also been an important factor in starting a new venture. According to
Minniti et al (2004) majority of women in developed nations do not believe they
have the skills and knowledge necessary to start a new business. The lowest
belief in ones own skill is found in women of
Lack of knowledge and experience
Many times women
entrepreneurs are not fully conversant with the various laws, formalities and
regulations prevailing in their state (Vinze, 1987). Many of them are
unfamiliar with market techniques, or do not possess the experience and ability
needed to expand their businesses. In developing countries of Asia and
Most of the developing countries have weak infrastructure which hampers the growth of business. Women especially in African countries have problem in accessing appropriate and affordable premises. Most of the women entrepreneurs operate their business enterprises on the street (ILO report, 2000).
Credit is one of
the biggest problems, which women entrepreneurs face all over the world. They
complain about the rigid formalities and procedures for availing credit
(Ramanunny, 2003). In developing nations in particular women have limited
access to material resources such as land and capital. Banks and other
financial institutions are hesitant while providing finance to women
entrepreneurs because they don’t have property rights and security (Gerard et.
at., 2004). Banks ask for guarantee from their fathers and husbands which they
seldom get. Banks also demand collateral for getting loans and as women have
fewer rights to parent’s and spouse’s property they are unable to offer
collateral which further restricts their access to bank credit ( Karim, 2000).
Due to weak social position, they are not allowed to seek finance themselves
instead their husbands or brothers seek finance on their behalf (Mayoux, 2001).
Developed countries in comparison are better then developing countries but here
too women mostly rely on own savings. They seldom depend upon external finance
for their business. Exceptions to this are
Network and Role models
Networks are major source of knowledge about women’s entrepreneurship and they are increasingly recognized as a valuable tool for its development and promotion. Networks are providers of information, possibilities and support. In developing countries women have significantly smaller networks compared to women in developed countries.
There exist a strong connection between the presence of role models and the emergence of entrepreneurs (Shapero and Sokol, 1982). Almost all over the world a strong positive and significant correlation exists between knowing another entrepreneur and a woman’s involvement with starting a new business. The influence of role model is gender related. That is an individual will be more influenced by another individual of the same sex, as ones aspirations and choices tend to be more influenced by persons of the same sex (Deaux and Lafrance, 1998). Role models are found more in developed countries than in developing countries.
Compared to developed countries women in developing countries have low savings. With a low income it is difficult to save money and hence the probability of becoming an entrepreneur diminishes as well. In developing countries in particular it is very difficult to save money for women for business purpose because at any moment a male family member (husband, brother, brother-in-law) can confiscate the accumulated capital for no other reason than that he is allowed to and there exists no protection for women in this respect (de Groot, 2001; Mayoux, 2001). The relationship between income, saving and propensity to engage in entrepreneurship is well documented in number of countries such as Sweden, UK, and US (Delmer et al, 2000; Cressy, 1996; Aldrich, 1999;Reynolds et al., 1997) where women entrepreneurship has increased at a fast pace. Thus the higher the ability to save the higher is the probability to enter into self-employment.
There is a strong positive correlation between Entrepreneurship rate of men and the entrepreneurship rate of women. Countries with a higher men’s entrepreneurial rate are also likely to have higher percentage of women entrepreneurs.
entrepreneurship is growing faster in developed countries than in developing
countries. They have grown faster in developed countries like the U.S, U.K and
Women in developed countries start business late in life than women in developing countries.
women in developed countries are giving preference to entrepreneurship. Exceptions are
There has been a marked growth in the second-generation female entrepreneurs in some of the developed countries. In US especially women who have been in business for many years are encouraging their daughters to take over the businesses.
In developing countries in particular women often enter business without prior experience on the other hand in developed countries a high proportion of women entrepreneurs enter business with past experience.
developed as well as developing countries women employ less start-up capital
than those of men. Majority of the women entrepreneurs provide all the required
start-up capital themselves and therefore most of them rely on personal
savings. Very few take bank loans.
Women entrepreneur have always been characterized by small company size. Firms owned by women are more likely to have no employees compared to firms owned by men. Women entrepreneurs have little interest in expanding their business however women entrepreneurs are expanding their business in some developed countries where they are creating and providing new jobs to others at a high rate. As far as developing countries are concerned job creation and growth are almost negligible.
Women in general are predominantly into conventional entrepreneurship however there are a few radical women entrepreneurs in developed countries who are moving rapidly into fields that have been traditionally male dominated such as production, construction, computers (IT), electronics, bio-technology and stock exchange.
World over for
women the choice to start a new business is often linked to financial security
and flexibility of time besides women also choose to become entrepreneurs out
of necessities or opportunities.
countries seem to have less gender gap, however there are exceptions. Countries
De jure occupational closure is almost negligible in developed countries but is quite prevalent in developing countries. De facto occupational closure is found both in developed as well as in developing countries.
Women entrepreneurs all over the world find it difficult to balance work with family. As
they play multiple roles they are also left with less time to devote to business.
The developed countries in comparison to the developing countries have been more forthcoming in formulating family policies. It has been found that instead of being a facilitating factor family policy in developed countries has become an obstruction in the growth of entrepreneurship.
Subjective perception of available opportunity has been a crucial component in starting new venture in developed countries than in developing countries. The subjective perception of having sufficient skill is also an important factor in starting a new venture. Majority of women in developed nations do not believe they have the skills and knowledge necessary to start a new business while majority of women in developing countries do believe they have the skills and knowledge necessary to start a new business.
countries of Asia and
Most of the developing countries have weak infrastructure, which hampers the growth of business. Women especially in African countries have problem in accessing appropriate and affordable premises
is one of the biggest problems, which women entrepreneurs face all over the
world. In developing nations in particular women have little access to
institutional and non institutional credit facilities. Banks and other
financial institutions are hesitant while providing finance to them. The social
position of women in developed countries in comparison to developing countries
is better but here too women rely mostly on personal savings. They seldom
depend upon external finance for their business. Exceptions to this are
In developing countries women have significantly smaller networks than women in developed countries. Similarly role models are found more in developed countries than in developing countries.
The higher the
ability to save the higher is the probability to enter into self-employment.
This has been witnessed in developed countries like
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