Challenges for Female Entrepreneurs  (Part I) by Margie Worthington-Smith

Challenges for Female Entrepreneurs (Part I) by Margie Worthington-Smith

The fact that we still make a distinction between entrepreneurs and female entrepreneurs is a striking sign of how little progress the world has made. If the world were a truly equal place there would be no reason to make such a distinction.  Some of the factors that conspire to make us perpetuate such inequality are obvious but there are also not-so-obvious ones.

To start, let’s look to the outliers – those women who have been able to  “lean in” and be accepted on merit as successful.  Sheryl Sandberg, COO of Facebook had this to say about equality:

“A truly equal world would be one where women ran half our countries and companies and men ran half our homes. I believe that this would be a better world. The laws of economics and many studies of diversity tell us that if we tapped the entire pool of human resources and talent, our collective performance would improve.

Legendary investor Warren Buffett has stated generously that one of the reasons for his great success was that he was competing with only half of the population. The Warren Buffetts of my generation are still largely enjoying this advantage.

When more people get in the race, more records will be broken. And the achievements will extend beyond those individuals to benefit us all … Conditions for all women will improve when there are more women in leadership roles giving strong and powerful voice to their needs and concerns.”

The most obvious factor

Let us now name the most obvious difference between men and women.  Women are equipped to give birth.  Many do and when they do they take on a role that is totally consuming both physically and emotionally over a long period of time.  While men naturally have a role to play in this dynamic it is a fact that this additional responsibility minimally if not rarely influences their work commitments. In contrast, it requires of women to either exit the workplace race (briefly or forever) or participate in it with an additional facet not required by men.

There are many delightful anecdotes by working women of the challenges that they face in the juggling act of home and work.  The practical reality is that many women exit the race because the energy required is overwhelming.  The workplace is not accommodating of mothers and to try to take on leadership responsibilities while rearing children requires compromise one way or the other.  Those women who are able to get to a position of leadership are positioned in the public eye (and more importantly other female eyes) as role models.  Without these role models other women cannot see the possibilities.  However, this leadership very often comes at a cost and certainly takes courage and resilience.

Factors specific to South Africa

How does South Africa match up to the rest of the world in terms of the courage of our women entrepreneurs and what are the factors that are holding us back?

One only has to have scant knowledge of South Africa’s history to know that small a country as we are, we have for a long time punched way above our weight. We have an enviable infrastructure and have unlocked remarkable natural resources making us a serious player in many (particularly mineral and agricultural) exports.

However, a review of that same history will also show that what could be perceived as a major threat – but which is in fact a major opportunity – is the fact that the potential of our human resources remain largely untapped.  The most exciting opportunity created by the miracle of 1994 was the possibility of unlocking this huge unutilised resource – which, combined with the already unlocked natural resources, would put us way up there on many economic and other rankings.

Depressingly, 22 years after political freedom, we remain possibly worse off on this measure than ever before.

A glance at the diagram below shows the glaring deficiencies in South Africa’s human development when we are compared to the rest of the world.  Not surprisingly (due to a disastrously poor education system) startup skills are way below the world average.

Human capital development (as mentioned already) shows up as devastatingly poor and, not surprisingly given the poor previous two factors, the appetite to risk capital on such low level human capital and poor skills is negligible.

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Seen through a more positive lens, South Africa can still unlock its human potential and be an even greater entrepreneurial player.

Courageous Women

Nevertheless, in the three decades of working in the development sector, specifically in job creation and entrepreneurship development, time and again we have found that it is the women who seize the opportunities for skills development.  They are driven by the responsibility to provide for their children and they are the ones who show the grit and determination to succeed.  The South African Institute for Entrepreneurship (SAIE), which has been training and supporting emerging entrepreneurs for 21 years, works primarily with female entrepreneurs.  This year, of the 18 agricultural cooperatives that were assessed and selected for the training, 88% of members were women.  In addition, SAIE ran a SETA-funded New Ventures Creation course in 2016 where 83% of the participants were women.

The Female Entrepreneurial Index (FEI)[1] ranks South Africa at no. 36 in the world ahead of Montenegro and following Uruguay (out of 77 participating nations) with a Global Entrepreneurship Index (GEI)[2] score of 44.2 (the highest being the USA at 82.9 and the lowest being Pakistan at 15.2).

Critical bottlenecks

In examining what the enablers and barriers are to women entrepreneurs – certainly the inequalities of the world and the fact of motherhood are key elements.  However, there are other critical bottlenecks too.  In order for the sweet spot of entrepreneurship to be attained there needs to be an even balance between the abilities and aspirations of the woman and the attitudes of society.

There have been recent studies done that measure the state of entrepreneurship in South Africa.  Besides the annual Global Entrepreneurship Monitor (GEM), the GEI and the FEI as previously mentioned also do the same.  However, the two latter studies include research on three pillars namely Attitude (societies’ attitudes towards entrepreneurship), Ability (entrepreneurs’ characteristics) and Aspirations (quality aspects of startups and new businesses) to identify how well entrepreneurs are faring.

The 2016 GEI information on South Africa’s entrepreneurial status shows that it is strong on product innovation (the aspiration pillar), competition (the ability pillar) and on process innovation (also the aspiration pillar).  Added to that, the FEI indicates that women in South Africa fare well in terms of equal rights, technology absorption and innovation.

For the GEI, the bottlenecks in South Africa are startup skills (attitudes), our human capital (abilities) and our technology absorption (also abilities).  FEI’s research shows that bottlenecks in South Africa for women are technology sector business, internet and networks, a lack of highly educated owners and poor research and development expenditure.

You will notice that although South Africa is rated low by the GEI on technology absorption, the FEI has found that technology absorption for women entrepreneurs is an enabling (institutional) factor.  This paradox would be interesting to unpack in a further, more comprehensive analysis.

So the key positive takeaways from this research are that the country as a whole appears to be relatively strong in its ability to produce new products more cheaply or to adopt or imitate existing products.  It also has proven to be able to create new technology or perhaps apply the latest technology while maintaining its market uniqueness.  Through its sound constitution South Africa has created an environment where women’s equal rights are good with a parity of laws around capacity, property and employment.  The research also found female ICT role models in senior positions and in senior government.  There is a good firm-level technology absorptions capability in the country, which has been found to be one of the strengths of women entrepreneurs.

On the downside, however, the most damning findings confirm what we know and are painfully aware of: the fact that our education system has failed us.  The wonderful opportunity we had 22 years ago to renew and rejuvenate has not been realised. Poor management, vision and will have resulted in massive unemployment, poor skills and as yet still unlocked human potential.

In Part II of this discussion we will look at how a lack of education, specifically startup skills, influence female entrepreneurs.

 

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