I strongly believe that female entrepreneurship is the gateway to getting more women into business, particularly into senior leadership positions. As such, it is also the gateway to faster economic growth, a higher rate of job creation and the more equal distribution of wealth within societies. This International Women’s Day (March 8th) the theme is #BeBoldForChange. So let’s have a closer look at what bold actions we can all take to help accelerate these female entrepreneurs.
According to the 2017 Global Entrepreneurship Index, a 10% improvement in the conditions that support entrepreneurship, which would include tapping into the true power of female entrepreneurship, could add as much as $22 trillion to global GDP. That’s a huge sum.
So what obstacles are stopping women from becoming entrepreneurs? And how can we remove those obstacles so that they can fulfill their entrepreneurial potential? I raised these questions during a recent panel discussion that I chaired on the role of digital technology in powering gender-inclusive growth. The discussion took place on 10 February 2017 as part of EY’s Mediterranean Strategic Growth Forum in Rome.
Five major obstacles to female entrepreneurship in the Mediterranean region were highlighted by the illustrious panel, which consisted of Marta Dassu, Senior Director of European Affairs at The Aspen Institute, Hela Fourati, Managing Director of the Tunisian American Enterprise Fund, Sanem Oktar, Managing Partner at marketing group directComm, and Gisbert Rühl, CEO of steel producer Klöckner & Co:
1. Access to capital. As they are more likely to work part-time and in lower-status jobs than men, women often struggle to build up their own capital and assets. Furthermore, inheritance laws that favor sons above daughters can disadvantage female entrepreneurs in some countries.
2. An inability to scale. To scale a business, it is usually essential to secure external funding. But banks are less attracted to the traditional businesses preferred by women than they are to the high-growth businesses normally founded by men. In any case, even where women are seen as credible borrowers, they often have a deep reluctance to take loans from third parties, believing that it is safer to grow a business organically or just to borrow money from family and friends.
3. A shortage of IT skills. Women are significantly underrepresented within the information, communication and technology (ICT) sector, which produces Europe’s fastest-growing start-ups. EU statistics suggest that less than one in five ICT managers and entrepreneurs is female while women represent less than 30% of the total ICT workforce in Europe.
4. A lack of role models. There are comparatively few high-profile female entrepreneurs for other aspiring female entrepreneurs to emulate, especially in tech. Women can also struggle to access the vital mentoring they need to support them as they grow and scale their businesses.
5. An imbalance between working and caring responsibilities. Socially constructed gender roles mean that the family is still the woman’s prerogative. Therefore talented women give up on their dreams mid-career because they are struggling to meet both family and work commitments. They either get out of the workplace altogether or move into part-time roles, both of which limit their ability to build up the capital necessary to start a business.
While the panelists agreed that female entrepreneurs face significant challenges, they also made five recommendations for bold actions of how those challenges could be overcome:
1. Women should be educated to take risks and believe in themselves. They will have to ‘oversell’ their ideas in the way men do if they want to raise funding. They should also banish the belief that they have just one shot at business success. Male entrepreneurs don’t always get business right first time. So it’s ok if women don’t either.
2. Female entrepreneurs who want to scale their businesses need to understand how networking can help them. Networking will connect them with valuable role models, mentors, and funding sources who can support the development and funding of their ideas.
3. Digitalization must be presented as a great opportunity for women to become entrepreneurs. According to the European Commission, Europe could face a shortage of more than 800,000 skilled ICT workers by 2020. To take advantage of digital opportunities, more women must be encouraged to study science, technology, engineering and math (STEM) subjects at school and university.
4. Technology should be used to help women to achieve a better life-balance. If women have employers who will support them to work in more flexible ways, they will progress further in their careers and develop the vital business skills they will need as entrepreneurs. Ultimately, it is in the interests of businesses to improve the diversity of their workforce, particularly at senior levels. Research shows that companies perform better when they have women on their board.
5. Men need to articulate the benefits of having more women in leadership teams. They should act as sponsors who can turn discussions on diversity into concrete actions.
Overall, I found the discussion fascinating and with International Women’s Day coming up, it is my hope that corporates, governments and entrepreneurs working together to #BeBoldForChange by taking the recommendations above and turning them into practical actions that serve to narrow the gender gap and drive global economic growth. The responsibility of creating a more equal, innovative and prosperous world lies in all our hands.
Find out what EY is doing to accelerate the achievement of gender parity in the workplace through our Women. Fast forward platform.
Author: Demet Ozdemir
Partner and EMEIA Strategic Growth Markets Leader at EY