Women and Entrepreneurship

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Professor Susan Marlow of De Monfort University, draws upon her research to comment on the tricky conundrum present when women broach the business of becoming entrepreneurs

In recent years the entrepreneur has been feted as an economic hero, heralded as an innovative creator of new jobs and wealth. This is a far cry from the image of the past. The transformation in the role and credibility of the entrepreneur in society reflects a broader trend away from the collective thinking articulated through expectations the state should provide us with jobs, welfare and housing. The ‘contemporary entrepreneurial project’ has been enthusiastically embraced by governments of all persuasions across the globe.

Since the 1980s in the UK, for example, successive Labour and Conservative administrations have funded public initiatives to encourage self employment. This has spilled over in secondary and tertiary education in efforts to instill an entrepreneurial mindset into young people. Yet despite the wholesale engagement with, and promotion of, an enterprising society some groups remain consistently underrepresented as entrepreneurs. One such group are women. They currently represent about 26 per cent of the self-employed and 15 per cent of small firm owners. Indeed, women’s share of the self-employed population has hardly changed since 1992.Although more women are becoming entrepreneurs, at the same time high rates of business closures and exits mean such degrees of ‘churn’ ensure a static share of the sector. As a consequence, women’s performance as entrepreneurs has been considered problematic.

Governments consistently express concern that this under representation means women are not fulfilling their entrepreneurial potential, but are also failing to contribute appropriately to wealth and employment creation. Further, it is suggested women’s enterprises under perform as, for the most part, they remain very small. In effect, we see few women operating in high growth, entrepreneurial sectors. There are also concerns over fairness and access to the sector.

Finally, it is argued that self employment is a good choice for women as they can transform into ‘mummypreneurs’ and so use self employment as a flexible solution to combining child care, domestic work and income generation. Thus, since the early 2000s, policy has focused upon encouraging more women to become self-employed by supporting Women’s Enterprise Organisations (previously government funded, now emerging in the third sector) to offer bespoke training, advice and support; identifying positive role models of female entrepreneurs and focusing on the benefits of self employment. Yet, from my research I would argue this focus is misguided and will be unproductive.

The under-performance thesis suggests women are reluctant to grow their firms and do not want to maximise wealth and employment opportunities. This argument rests upon two very fragile assumptions. First, that given the sectors where women’s firms are concentrated there is scope to grow them; and secondly, their firms differ notably from the norm (that is, male owned firms).

To take the former point, it is evident women-owned firms are concentrated within lower order services (reflecting employment profiles) where, in fact, there is very little scope for growth given the degree of crowding and limited profitability margins. This is not under-performance but constrained performance — a sector effect. In the case of the latter issue, any analysis of the small firm sector reveals most are located in lower order services given the low start-up costs and ease of founding such firms.

The majority are marginal performers and this is also a sector effect. The only odd thing here is that it is women who are singled out as under-performing. This criticism is not leveled at their male counterparts. Furthermore, the problems with sectoral crowding and tight margins are unlikely to be solved through women’s advisory agencies as these are market-related constraints rather than barriers addressed through business support initiatives. Undoubtedly, the popular image of the entrepreneur is male.

Ask people to name an entrepreneur and this will generate a list of men’s names —Richard Branson, Bill Gates, Mark Zuckerberg. Ask them to name women and sadly, the response usually focuses upon the deceased — Anita Roddick, Laura Ashley — or the ‘grumpy Deborah’ (being more of a man than the men) from Dragons’ Den. Hereraising the profile of women as entrepreneurs, making this role more normal for girls and expanding entrepreneurship education will be influential.

The only caveat being, of course, that if women are still more likely to experience occupational segregation into lower status, lower paid work — and we know entrepreneurial activity maps onto prior employment — we may just be encouraging more women to reproduce employment disadvantages within entrepreneurship. The final point that entrepreneurship offers a credible solution to flexible working is just wrong.

Extensive research suggests locating firms in the home and operating them on a part time basis reduces credibility with other stakeholders, positions ‘work’ as apermanent feature of the household and trying to accommodate caring merely compromises profitability or means working at night while children sleep. Being a ‘mummypreneur’ works where a constrained income and a limited client base are feasible; that is, as a second income.

As a prime income, it is highly unlikely to be a viable solution. If it is so disadvantageous to concentrate in lower order services and home-based enterprise, and is unlikely to realise high returns, why do women not locate in high growth sectors, as both support agencies and government policy advocate? Well, for the same reasons they do not feature highly as senior and executive managers in such industries. Just like broken career paths disrupt progression for female employees, so they constrain the opportunity for women to accrue entrepreneurial capital in such arenas. Thus, women have less managerial experiences, fewer network connections and generally, less accumulated savings to invest in businesses requiring high levels of capital. Plus, women’s minority status in growth sectors such as high technology, bio-meds and creative industries ensures difficulties in accessing the fraternal cultures that define these industries.

The ‘gendered effect’ happening here is unlikely to be addressed through current policies on enterprise and entrepreneurship. Women certainly have the talent to be entrepreneurial. Establishing and celebrating positive role models is to been couraged, but perhaps it might be just as useful to stop presenting women in negative lights. This will support the notion successful female entrepreneurs are not exceptional women but exceptional entrepreneurs.
This removes gender from the equation and, instead, focuses upon achievement. Encouraging more women as high growth entrepreneurs is laudable, but such women are likely to emerge from the cadre of senior employees. Women must certainly take up opportunities to act entrepreneurially, but asking why more do not do so is not likely to be revealed by current policy and practice that tends to blame the victim rather than solve the crime.

Indeed, this final point is important. The current trend for individualism does not recognise structural and/or collective forces of disadvantage as an excuse for lack of achievement. Rather, we are all expected to negotiate such challenges using our own resources and wiles. For women entrepreneurs they might find they are blamed for being too few, too marginal, too risk-averse and just not like men. The chances of entrepreneurship offering women new opportunities to forge individualised paths where their talent and hard work will win the day might work for some, but is unlikely to be an easily accessible solution for most.

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