CEO/Photo: Midhat Poturovic;

Entrepreneurship: the ‘she’ factor

How to give wings to female entrepreneurs

In the past two decades, female entrepreneurs have accounted for around a third of all businesses in the UK, 26% in France and 37% all businesses in the USA. Yet, women constitute of 52% of the total population in Europe. Recognising the typical challenges faced by women entrepreneurs inspired founders of the international EU-funded WINGS project to take action and offer some support. This article outlines current trends in female entrepreneurship providing food for thought to inform the design of future support mechanisms.

Specificities of women-owned start-ups

Women face many challenges in relation to entrepreneurship. The main problem is a lack of business ideas and knowledge, psychological constraints such as fear of failure and low entrepreneurial self-efficacy. That’s according to my own research published in 2013. It reveals a common belief considering money as the most important factor to launch a company. However, actual studies show that women don’t just simply become entrepreneurs automatically, even if they have a relatively easy access to financing. What matters most is whether they have a business idea and are not hampered by psychological constraints.

Further research shows that when women start their businesses, it is usually a solo initiative. And their growth aspirations are usually low. Besides, more than half of female-led enterprises operate in the consumer service sector. This means that education, distribution, personal services, health and social entrepreneurship are the most obvious choices for female entrepreneurs. These sectors are usually associated with lower profitability than sectors currently dominated by men, such as IT, high-tech manufacturing etc.

In parallel, in recent years, we have observed a new and growing phenomenon in respect to female entrepreneurship, related to the growing role of migrants. According to an OECD study, this is a case for example in Italy where there were 109,000 firms launched by foreign women. The most active are Chinese migrants–with more than 20,000 entrepreneurs–and Romanians–with about 9,000 women.

Economic context

What is more, in some areas of Europe the financial crisis has had an impact on the overall level of enterpreneurship. For example in Spain, Greece or Portugal, incentives for entrepreneurs have decreased significantly during the recession. According to a 2014 EC study documenting women entrepreneurship, the number of people who considered entrepreneurship as a good professional option declined from 70% down to 55% between 2005 and 2013. Currently, no more than 12% of the total female workforce are entrepreneurs in Spain. And those who start their business do it our of economic necessity.

By contrast, young female entrepreneurs already constitute of around 40% of all start-ups in Austria. There and in a growing number of countries like Poland, women launch companies to grasp opportunities, rather than out of necessity, according to a 2014 Global Entrepreneurship and Development Institute study.

In Poland, this trend is explained by women’s emancipation combined with the availability of policy and programmes designed to support entrepreneurs. By contrast, countries like Italy, Greece and Hungary, have much lower indicators of female entrepreneurship, according to the 2014 Global Entrepreneurship Monitor study. It could arguably be partly linked to cultural reasons.

Multiple support programmes

In some countries, programmes supporting women-owned start-ups are booming. For example, in Poland between 2007 and 2013, nearly half were designed for women who wanted to launch their own firms. Zooming down to one Polish region of Lower Silesia, 27 projects offered financial support for female start-ups. In addition, there were almost 100 workshops on entrepreneurial skills development addressing exclusively women. As a result, over 600 small and medium enterprises were launched by women during that period, according to my own unpublished research.

By comparison, during the same period, 17 projects exclusively supporting female entrepreneurship took place across all Scandinavian countries. No programme of this type was recorded in Hungary. And only very few were available in Slovakia and in the Czech Republic. It is worth adding that the disparities between countries in Europe are not merely related to geography but to variations in culture and entrepreneurial support policies.

Entrepreneurial wings

Recognising the challenges faced by female entrepreneurs led the founders of the EU-funded research project WINGS to developed an online resource for them.

WINGS also organises free round tables and conferences across Europe to help raise awareness of available support mechanisms it offers. These include access to a mentors network, good practice information, and links to European institutions operating in the field of female entrepreneurship. It also offers some advice and support for users to implement e-business solutions.

So far, the platform, which is available in nine European languages, reaches out to users in 24 countries, with nearly 22 000 visitors. And this is only the beginning.

Agnieszka Klucznik-Törő

Agnieszka is founder and general manager of a consultancy called the International Center for Entrepreneurship (ICE). She is also involved in a activity of Climate-KIC, Tataj Innovation, Henley Business School, teaching and start-ups coaching in Hungary, Sweden, Slovenia, Turkey, the UK, Germany, Denmark and her native Poland.

Featured image credit: CEO Photo: Midhat Poturovic

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