Women entrepreneurship, an underutilized potential for economic growth

Women entrepreneurship, an underutilized potential for economic growth

In the mid 2000s, the OECD recognized female entrepreneurship as a potential under-utilized for economic growth. Recognizing there are gender differences in entrepreneurship, it is no longer a hypothesis but a fact verified by relevant studies. According to the 2013 summary of the report Women Entrepreneurship in OECD, the probability of owning a business is more than 3 times higher for men than for women

Differences that can be overcome.


Women rarely hold a large business. Cultural norms, stereotypes and lack of critical mass of female role models in business often demobilized women to follow the path of entrepreneurship and eroded their confidence in the success of such an initiative.


When, however, women take the step towards entrepreneurship, the challenges of lack of time and the composition of their professional network leads them to start small businesses, with low capital and bank financing. These obstacles are translated into productivity by 5% to 30% lower for women-owned companies compared to those held by men, according to the report cited above.


Importance of women entrepreneurship.


Why is it important to talk about the women entrepreneurship in Romania? Because of two interrelated reasons:

  1. It represents a growth potential for our economy that’s grossly underutilized, and
  2. Women’s presence in entrepreneurship was in the background, both in society, and in the business environment.


I invite you to discuss each one briefly.


1.        An underutilized potential for growth


Women entrepreneurs create new jobs both for themselves and for others. So far nothing new. That's what men entrepreneurs do as well. What is different for women is the specific manner of thinking a business and giving different solutions than men in management, organization and solving business challenges, and also in terms of the opportunities.


If men have rather an egocentric motivation when they decide to become entrepreneurs, women most often pursue social goals and visions that include a positive impact on the community. Academic studies argue that, in Romania, women are more motivated to open a business because their need for independence and professional fulfillment that they could not fulfil in the workplace, while men are driven by the need to control and overcome challenges.


Also, sociological studies show that businesses run / owned by women are 14% more oriented opportunities and initiatives, 10% focused on ethics and integrity, 9% more oriented towards efficiency and effectiveness, and 8% more active in employee development.


2.        Presence of women in entrepreneuship


In Romania, women are a minority in the business community, even though they account for 51% of the population. According to the Mastercard[1] survey for 2017 on women entrepreneurship carried out in 54 countries around the world, Romania is ranked 28th with only 25.3% of the total number of businesses owned by women, compared to 30.8% in Spain, 29.6% in Poland and 27.8% in Hungary.


Not only that the number women in entrepreneurship is significantly lower than that of men, also the areas that they choose for business development are different. Women preferred industries are trade, education and services, which often are perceived as less important for economic growth and development than, for example, the IT&C industry or production.


Moreover, the regulatory framework and programs in place to support entrepreneurship seem not to take into account the specific needs of women in general and women entrepreneurs specifically – the difficulty to combine family with professional life, discouragement, distrust, and the sexist stereotypes which demonstrates that collective mentality on women in business in Romania is still in development.


The consequence is that equality is suspended. Even if you can name some good initiatives, they addressed general objectives including support to women entrepreneurs or were merely an exercise to meet the EU requirements, without a substantial strengthening of the female entrepreneurship.          


What needs to be done? Proposal for actions. 


·         Create a government department responsible for supporting female entrepreneurship by creating business centers for women, organizing seminars and business meetings, providing relevant information for women entrepreneurs and helping improve conditions for the development of businesses held by women.

·         Undertaking an impact study of the role women play in developing the business environment. Integrating the aspects of women entrepreneurship in policies concerning SMEs, taking into account in the design phase of these policies the impact thereof on female entrepreneurship.

·         Creation of organizations for women entrepreneurs in each city to transfer knowledge about entrepreneurship, provide development tools and its promotion, but also advice and mentoring. Fostering the collaboration between these organizations, building partnerships with similar organizations in other countries and joining international networks supporting female entrepreneurship.

·         Establishment of a body representing the interests of women entrepreneurship to propose draft laws and amendments to the current regulatory framework on female entrepreneurship.

·         Creating an online platform for sharing success stories, learning from challenges encountered by other entrepreneurs and to carry out mentoring programs with participation of national and even international mentors.

·         Regular assessment of the impact of the policy on women-owned businesses and the extent to which businesses benefit from this policy, with the objective of identifying ways of selection and continuous improvement of the legislative framework.


[1] Mastercard Index of Women Entrepreneur 2017