A review of the challenges militating against women entrepreneurship in developing nations

Academic Paper , 2014 , 10 Pages , Grade: B

Gender Studies

Women entrepreneurship has recently received attention by the research community, particularly because the global economic and social impact of female entrepreneurs is beginning to gain prominence. The number of women entrepreneurs particularly in advanced markets and economies has continuously experienced increase. However the development of female entrepreneurship in developing nations is at very low ebb. Regardless of this fact, there exists a very limited literature addressing the challenges and development of female entrepreneurship in these nations.
Thus this paper seeks to explore the challenges faced by female entrepreneurs and also to address the gender issues in the developing nations with particular emphasis on Africa.

Inhalt

ABSTRACT

INTRODUCTION

ECONOMIC IMPACT OF WOMEN ENTREPRENEURSHIP

OBSTACLES FACING THE DEVELOPMENT OF FEMALE ENTREPRENEURSHIP

POLICY RECOMMENDATIONS

CONCLUSION

References

A REVIEW OF THE CHALLENGES MILITATING AGAINST WOMEN ENTREPRENEURSHIP IN DEVELOPING NATIONS

BY

Maxwell Ayodele Olokundun

Department of Business Management

College of Development Studies

Covenant University, Ota

Ogun State. Nigeria

&

Hezekiah Falola

Department of Business Management

College of Development Studies

Covenant University, Ota

Ogun State, Nigeria

&

Stephen Ibidunni

Department of Business Management

College of Development Studies

Covenant University, Ota

Ogun State, Nigeria

&

Augusta Amaihian

Department of Business Management

College of Development Studies

Covenant University, Ota

Ogun State, Nigeria

&

Chinonye Love Moses (Phd)

Department of Business Management

College of Development Studies

Covenant University, Ota

Ogun State, Nigeria

ABSTRACT

Women entrepreneurship has recently received attention by the research community, particularly because the global economic and social impact of female entrepreneurs is beginning to gain prominence. The number of women entrepreneurs particularly in advanced markets and economies has continuously experienced increase. However the development of female entrepreneurship in developing nations is at very low ebb. Regardless of this fact, there exists a very limited literature addressing the challenges and development of female entrepreneurship in these nations.

Thus this paper seeks to explore the challenges faced by female entrepreneurs and also to address the gender issues in the developing nations with particular emphasis on Africa.

INTRODUCTION

Recently there has been a focus on entrepreneurship by developing and developed nations as a panacea for persistent unemployment and a drive for economic Growth and Development. In the same vein female entrepreneurship has also received attention not only because it contributes to job creation and economic growth potential of a nation, but also because it presents a form of entrepreneurial diversity in an economy ( Jamali 2009; Acs et al; 2005; Langowitz and Minniti 2007; Verheul et al, 2006). However these benefits and gains remain largely untapped in many countries of the world particularly developing Nations ( Jamali 2009; Baughn et al 2006)

Various studies have shown that despite increased rate of female entrepreneurial activities in many nations (developing and developed alike) compared to their male counterparts, the level of female entrepreneurship is still significantly low ( Jamali 2009; Minniti et al 2005; Verheul et al 2006; Langwitz and Minniti 2007).

Thus this paper seeks to explore the obstacles militating against the development of female entrepreneurship with particular focus on developing nations. This study will also attempt to proffer possible policy recommendations that would facilitate the development of female entrepreneurship particularly in developing countries.

ECONOMIC IMPACT OF WOMEN ENTREPRENEURSHIP

Findings and research presented by the International Labour Office as regards female entrepreneurship in developing economies particularly in Africa, leads to substantial evidence that even women living under harsh and adverse conditions can still have notable economic impact by creating employment which most often than not is usually directed towards other women ( OECD 2004)

Research findings indicated that a sample of 118 women entrepreneurs interviewed in Zambia owned 114 firms providing 1013 persons with employment (OECD 2004; ILO 2003c). Another research statistics with relevance to women entrepreneurship in Africa also indicated that a sample of 128 women entrepreneurs interviewed in Tanzania provided 752 persons with jobs (OECD 2004; ILO 2003b). in the same vein 123 women entrepreneurs were interviewed in Ethiopia, these women owned firms that provided employment for 852 individuals.

The result of the research above, strongly indicate that women entrepreneurs particularly in developing countries have a potential and capacity to expand their enterprises thus facilitating job creation and economic development. Therefore the impact of women entrepreneurship cannot be overemphasized. Hence it is imperative to review obstacles impeding the development of women entrepreneurship targeted at fostering entrepreneurial activities particularly in Africa and other developing Nations.

OBSTACLES FACING THE DEVELOPMENT OF FEMALE ENTREPRENEURSHIP

Considering the importance of female entrepreneurship to potential job creation and economic development in developing worlds, it is very necessary to review different barriers women might face while engaging in the entrepreneurial process.

Lack of entrepreneurial role models

There is a strong correlation between the presence of role models and the development of entrepreneurial competence in individuals ( Shapero and Sokol, 1982; OECD 2004). Thus the display of successful entrepreneurial attitudes and behavior by role models establishes a desirability and acceptance of entrepreneurship as a career option by individuals.

With particular regard to women entrepreneurship, the influence of role models is also believed to have a gender bias. Individuals have a tendency to be influenced by the aspirations and choices of individuals of the same sex ( Deaux and Lafrance 1998; OECD 2004). This suggests that the successful entrepreneurial attitudes and activities of role model women entrepreneurs will greatly influence women to opt for entrepreneurship as a viable career choice.

However, the presence of role models in women entrepreneurship is lacking in developing Nations where the percentage of entrepreneurial activities of women is still very low compared to their male counterparts. This accounts for the low entrepreneurial motivation and acceptance of entrepreneurship as a viable career option in women particularly in developing countries.

Lack of work experience

The entrepreneurship process largely depends on relevant experience. The theory of human capital suggests that the achievement of higher performance by individuals as regards the completion of work related tasks is a function of the quality of human capital possessed by the individuals (Becker 1964; OECD 2004;)

In this context human capital refers to the relevant skills and knowledge possessed by individuals geared at successfully identifying and exploiting business opportunities (OECD 2004). The disparity between individuals as regards their abilities to identify and exploit business opportunities is largely a function of prior education and work experience (Shane 2000; OECD 2004).

However women in developing nations particularly in Africa are disadvantaged as regards acquisition of relevant education and work experience often due to cultural and religious reasons. Hence women in developing nations lack the experience required to successfully identify and exploit business opportunities, thus a deterrent to the development of female entrepreneurship in these countries.

Lack of relevant social networks and societal positions

Social networks represent structures and processes describing how individuals are linked with each other and the relationship between individuals in the network respectively (Larson and Starr 1993; OECD 2004). An individual’s social position or relevance is largely dependent on the individual’s social networks. With relevance to entrepreneurship, interpersonal relationships differ in quality and quantity which directly impacts successful venture start ups by individuals ( Malecki 1994; OECD 2004)

Social networks are of utmost importance particularly because the actions of individuals are primarily a reflection of their social contexts or the circle of individuals they interact with (OECD 2004). Thus an individual’s network provides the necessary support vital to engaging in entrepreneurial activities successfully (Hansen 1995; Matthews and Moser 1995; OECD 2004).

However women particularly in developing nations generally have lower social positions than men which also reflect in the networks they have access to (Burt 2000; OECD 2004). The networks women in developing countries are involved in are usually a reflection of personal and traditional networks which at best facilitates family related tasks which may not support business purposes (Lin 1999; OECD 2004). Thus women in these countries have limited access to relevant resources, support and information provided by social networks which is required for venture start ups and management (OECD 2004).

Lack of capital assets

One of the key requirements for starting a business is to have adequate financial assets and the relevant knowledge assets (OECD 2004). Women’s position particularly in developing nations makes it difficult to acquire both assets categories (OECD 2004). Furthermore family obligations constrain women to work at full time jobs or to engage in a career. Consequently job opportunities for women in developing nations experience a downturn with reference to high paying jobs (OECD 2004). Thus at best most women in these nations take up part time jobs or low paying jobs which are not consistent with the creation of personal wealth. Hence wealth required for women to engage in entrepreneurial activities is usually lacking particularly in developing countries.

POLICY RECOMMENDATIONS

The following features a policy framework to support women entrepreneurship in developing nations:

Increased women participation in the labour force

Increasing the participation of women in the labour force can enhance the development of women entrepreneurship in developing nations. Women participation in the labour force can be enhanced by promoting policies of fair and equal treatment in the workplace. Regarding family obligations such as child care, child care centers could be established in workplaces at affordable costs to enhance concentration at work. The aim would be to afford women the work place experience and financial capability required to engage in entrepreneurial activities. This would increase the number of women adequately prepared for launching their business ventures (OECD 2004).

Giving prominence to women entrepreneurship

Increased focus on the activities of women entrepreneurs would go a long way to facilitate the development of women entrepreneurship in developing countries. Government offices for women entrepreneurship could be established. This would enhance the organization of workshops and seminars for women entrepreneurs targeted at disseminating information and knowledge towards improving and developing women entrepreneurship in developing nations. This will facilitate entrepreneurial human capital development in women in these countries. This in turn affords women the required education necessary for engaging in entrepreneurial activities (OECD 2004).

Promoting women entrepreneur network

The development of women entrepreneur networks is pivotal to the advancement of women entrepreneurship in developing nations. Women entrepreneur networks would go a long way to provide valuable sources of information and knowledge about women entrepreneurship and important ingredients for its development. National and international networks could facilitate cooperation and partnerships that would enhance increased women entrepreneurial activities particularly in developing nations. Furthermore Government policies should accommodate more women in political positions; this will improve the societal status and positions of women which would also have a positive impact on their social networks. This as earlier stated will provide the right support and interaction that could facilitate venture start ups and management (OECD 2004).

Periodic evaluation of SME policies on the success of women entrepreneurship

A periodic evaluation of the impact of SME policies as regards women entrepreneurship is pertinent to the development of women entrepreneurship in developing nations. The goal would be to highlight the policies that should be retained and how to improve them for enhanced effectiveness. For instance policy framework for SME financing should accommodate easy access to funds particularly for women entrepreneurs. This would be aimed at encouraging women to engage more in entrepreneurial activities (OECD 2004).

CONCLUSION

This study reviewed the obstacles and constraints facing women entrepreneurs in most developing nations of the world. Considering the impact of women entrepreneurship to job creation and economic development as well as the promotion of entrepreneurial activities in these countries, the following policy recommendations were made; increased women participation in labour force, giving prominence to women entrepreneurship, promoting women entrepreneur network, and finally a periodic evaluation of SME policies as regards the development of women entrepreneurship in developing nations.

References

Acs, Z, Arenius, P., Hay, M. and Minniti, M. (2005) 2004 Global Entrepreneurship Monitor- Exclusive Report, London Business School, London and Babson College, Babson Park, MA.

Baughn, C., Chua, B.L. and Neupert, K. (2006), “The normative context for women’s participation in entrepreneurship: a multi-country study”, Entrepreneurship Theory & Practice, Vol. 30 No. 5, pp. 687-708.

Becker, G.S. 1964. Human Capital. Chicago: University of Chicago Press.

Burt, R.S. 200. The network entrepreneur. In R. Swedberg (Ed.), Entrepreneurship: The Social Science View: 281-307. Oxford: England: Oxford University Press.

Deaux, K., & Lafrance, M. 1998. Gender. In D.T. Gilbert, S.T. Fiske, & G. Lindzey (Eds.), The Handbook of Social Psychology, Vol. 1 : 788-827. Boston: McGraw Hill.

Hansen., E.L. 1995. Entrepreneurial network and new organizational growth. Entrepreneurship Theory and Practice, 19(4): 7-19

Jamali, D. (2009), Constraints and Opportunities Facing Women Entrepreneurs in Developing Countries: A relational Perspective, Gender in Management: An International Journal, Vol. 24 No.4, pp 232 -251.

Langowitz, N. and Minniti, M. (2007), “The entrepreneurial propensity of women” Entrepreneurship Theory & Practice, Vol. 31 No.3, pp. 581-94.

Larson, A., & Starr, J.A. 1993. A network model of organizational formation. Entrepreneurship Theory & Practice, 17(2): 5-15.

Lin, N. 1999. Social networks and status attainment. Annual Review of Sociology, 25: 467-487.

Malecki, E.J. 1994. Entrepreneurship in regional and local development. International Regional Science Review, 16(1): 119-153.

Mattthews, C.H., & Moser, S.B. 1995. Family Background and gender: implications for interest in small firm ownership. Entrepreneurship & Regional Development, &: 365-377.

OECD (2004). Women’s Entrepreneurship: Issues and Policies. 2nd OECD Conference of Ministers Responsible For Small and Medium-Sized Enterprises (SMEs). Promoting Entrepreneurship and Innovative SMEs in Global Economy: Towards a Responsible and Inclusive Globalisation. Istanbul Turkey

Shapero, A., & Sokol, L. 1982. The social dimensions of entrepreneurship. In C.A. Kent, D.L. Sexton, & K.H. Vesper (Eds), Encylopedia of Entrepreneurship: 72-90. Engelswoods Cliffs, NJ: Prentice-Hall.

Shane S. 2000. Prior Knowledge and the discovery of entrepreneurial opportunities. Organization Science. 11(4): 448-469.

• Grade: B
• Authors: Maxwell Olokundun (Author), Hezekiah Falola (Author), Stephen Ibidunni (Author), Augusta Amaihian (Author), Chinonye Love Moses (Author)
• Publication Year: 2014
• Pages: 10
• Catalog Number: V286621
• ISBN (eBook): 9783656869122
• ISBN (Book): 9783656869139
• Language: English