Insight: women entrepreneurs

* by policy research organisation SBP

Drawing on data collected for their SME Growth Index – an annual study of established small and medium sized firms – research organisation SBP sheds some light on  women entrepreneurs in South Africa’s formal sector: the characteristics of their firms, their motivations for entering business, their growth orientations.

The emergence of a growing community of women entrepreneurs has been described by Professor Brush, Chair of Entrepreneurship at Babson College, as one of the most significant economic and social developments in the world.

This is no exaggeration.

Women are stepping up to own and run businesses in numbers that would have been hard to imagine a mere few decades ago. The ILO estimates that women entrepreneurs now account for a quarter to a third of all businesses in the formal economy worldwide. This is not merely redefining women’s economic roles; it is reshaping the modern global economy.

Small vs. big

In South Africa – as in much of the world – firms owned by women tend to be smaller than their male-owned counterparts. They are nonetheless a pioneering community. They are educated and well primed for their role as entrepreneurs. Many demonstrate excellent results and growth prospects.

As a whole, they are showing remarkably positive attitudes to the future – more positive than those of their male counterparts.

Social attitudes, while perhaps leaving significant room for improvement, are not a fatally constraining factor. It would appears that our country’s prospects for creating a growing pool of successful women entrepreneurs are good.

Perhaps the most striking finding emerging from the SME Growth Index data is that the differences between South Africa’s men and women entrepreneurs in formal-sector SMEs are overshadowed by the fundamental similarities.

Both are entrepreneurs first and foremost. They are driven by fundamentally commercial imperatives. The environment in which they operate is a difficult one.

Facing the same challenges

It appears that the challenges facing South Africa’s formal sector women entrepreneurs are much the same as those facing their male counterparts – and that gender plays little if any role in this. In this context, it is important to think clearly and carefully about measures intended to benefit women, including the very topical Women Empowerment and Gender Equality Bill.

Entering entrepreneurship is a risky and difficult commitment. Too few South Africans of either gender do so. There is much to be gained from expanding the pool of entrepreneurs, and women entrepreneurs in particular. But gender specific programmes, and legislation designed to impose a 50:50 gender ratio in the business environment, are unlikely to be the most effective means of doing so.

The Women Empowerment and Gender Equality Bill aims to redistribute existing opportunities. We would argue that a focus on enabling more people – men and women – to create their own opportunities would be far more empowering.

Interviewees demonstrated that their gender does not determine the sector in which they work, their aspirations for growth, or their optimism about the future. In fact, they’ve demonstrated precisely what a 2012 study of gender and entrepreneurship concluded: “Both men and women are equally capable of characteristics such as initiative taking and accomplishment, being active, independent, decisive, and self-confident.”

* SBP is an independent private sector development and research company specialising in improving the environment for doing business.