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Apples to Oranges? Women and Entrepreneurship in Country Context

Karen Hughes, author of Female Enterprise in the New Economy, and I have been corresponding in preparation for our opening remarks for the Power Shift Forum.  We are working on a way to frame the comparisons to be made between the circumstances for women entrepreneurs in developing versus developed nations. As the dialogue has evolved, I began to think it might make provocative reading and that maybe some would want to offer opinions of their own.  So here are our first two installments:

Hi, Karen,

I think the main service will be to try and provide some unifying viewpoint because we have a back-and-forth throughout the two days on developed versus developing economies.  I think it would be helpful if we can manage to frame in terms of the similarities and the differences.  I think most people think there are only differences, not similarities—yet they are also seldom aware of what the differences really are.

I am attaching the case that will be taught the following morning. I think it is a really good statement of the kinds of problems that I see all over the developing world for women, not just in coffee.  The problems of ownership, control over money, mobility, training of all sorts, time poverty, and violence are simply always there.

My feeling is that women in the West face these same issues to some degree. Certainly time poverty and training.  I don’t think anyone has looked at the impact of violence, but I do feel that it is probably an issue (especially domestic violence) and we just haven’t asked the question.  I think that what women do with their money  and what they think they are accomplishing through business is probably very similar in both domains: supporting children is a major motivator, earning a living the primary objective.  One big difference is that women in the developing world usually do not have formal employment as an option at all because it isn’t available even for men.  And, of course, property rights are a major problem. 

I often wonder about the money issues for women in the West.  There is all this work about how women don’t get collateralized loans, use credit card debt, are more risk averse, etc.  I sometimes think these phenomena may be related in that the women don’t really control family assets—or are very hesitant to use or encumber them for a business, as compared to men.  So, even though they have property rights, they functionally don’t use them?  Is there anything in that? In some countries in Africa, the women legally have property rights, but the government can’t enforce them, the tribal councils ignore them, and the male kin will just beat up or rape a woman who tries to exercise them.  So that if you just look at what the formal legal rights are, it doesn’t tell you anything.

I wonder about the level to which women in the West register their businesses?  I expect they do?  In the developing world, that is a big question.  We don’t think they do, but we really don’t know for sure. Linda Hi again Linda, Yes, I agree that thinking about similarities and differences is helpful, and that many of us might assume more differences than similarities when comparing women entrepreneurs across broad economic regions (e.g. developed/developing, high-/low-income, or factor-driven/efficiency-driven/innovation-driven economies as in the Global Entrepreneurship Monitor [GEM] reports).

Certainly, striking differences exist — whether we’re talking about the level of start up activity, established businesses, necessity-based entrepreneurship, or the age and educational background of women across high- and low-income regions. These are clear in the most recent GEM report on women entrepreneurs which I’ll talk about at the forum.

Having said this, we also see similarities across high- and low-income regions.  Part of the reason for this stems from the fact that there is actually great diversity amongst women entrepreneurs within the SAME region or national context. In Female Enterprise in the New Economy I argue that it’s difficult to talk about “women entrepreneurs” as a unified group, as they bring varied motivations and business approaches to the table. So, for instance, necessity-based entrepreneurship cuts across all countries (though levels and reasons for it vary), and women motivated by this in high-income regions may have more in common with similarly motivated women in other countries, than with highly educated, growth-oriented entrepreneurs in their own national or economic region. Likewise, family motivations may be a common thread for women, as you’ve already noted.  And both necessity and family factors may be intertwined, given the rise of female breadwinners, as well as family breakdown which can often spark poverty and economic need.

Other similarities or differences?  Context and relative constraints are important I think. The perception of high-income countries is that they differ markedly from low–income contexts — offering better formal labour market opportunities, as well as gender equality measures (e.g. maternity leave, childcare provisions) that have a dampening effect on entrepreneurship comparatively speaking. Certainly this is true, but good opportunities are not equally distributed in high-income contexts, and the formal economy is still marred by various types of ‘second generation’ gender bias that limit women’s economic returns, future opportunities, and independence.

So yes, women in high-income regions do have more formal protections, such as the legal right to work and own property, but they still face gender-based constraints in the labour market. Additionally, ‘risk’ and precarity are key features of many high-income economies, and certain groups are more vulnerable. So while constraints may not be as great as they are in low-income regions, they do exist — leading many women to want (or have) to create their own opportunities. As far as how women practice entrepreneurship, there are diverse motivations and approaches in high-income countries, and it would be interesting to think about how these cut across regions in ways we might not expect  For some women in Canada, and other similar economies, high-growth business is the ideal, bringing many of the same challenges you note below around training, expertise, securing financing, and accessing markets. In some regions, such as Canada, the high-growth sector for women is expanding, as more women enter less traditional, higher return sectors. There is also strong support for growing women-led business through various agencies and associations (e.g. women’s enterprise networks, WE Connect Canada).

Some women, however, don’t want to grow their businesses, and rates of incorporation remain low.  I’m not sure how this would compare to women in developing / low-income regions, but controlled growth and low-growth are two patterns we can also observe in high-income regions. In some cases, this may be due to life stage, or women’s family obligations, but for others it reflects a different perspective on business and economic life. Here we can see links to ideals of independence, meaningful work, and sustainability. Again, I’m not sure how this would compare to other regions but I expect this approach is a luxury for many. While I hope to talk about other issues as well at the forum, such as the impact of women’s business(e.g. financial performance, quality of work life), I’ll stop here for now.

Look forward to talking more about some of the common threads and diverse patterns we see. Karen

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