The Role Of Female Entrepreneurship In SME

The Business and Management of

Small and Medium Enterprises

INB 356

Literature Review:

The Role of Female Entrepreneurship in SME

Table of Content

Introduction……………………………………………………………………………………………………. 3

I – Environment of entrepreneurship……………………………………………………………….3

II – Profile of the female entrepreneur……………………………………………………………..5

III – Expanding Female entrepreneurship around the world……………………………7

Conclusion………………………………………………………………………………………………………..9

References……………….………………………………………………………………………………………10

Introduction

Women's entrepreneurship is not a new phenomenon, it has experienced a strong growth over the last fifteen years. The proportion of women entrepreneurs has increased by half between 1995 and 2010. Nowadays, three out of ten entrepreneurs are women and nearly three-quarters active in the service industry. The aim of this literature review is to provide a critical review of the literature on women in business. It includes research projects undertaken in the UK and in other parts of the world.

I – Environment of entrepreneurship

As defined by the International Labour Organisation (Capt, 1998), an entrepreneur is "someone who analyses the potential of its economic environment, find ways to improve it, mobilizes resources and acts to take advantage existing opportunities. It should be added an important feature, namely that an entrepreneur is someone who takes risks. The entrepreneurs are in many cases assimilated to heads of companies registered. It is estimated that there are currently 3.7 million small businesses in the UK (DTI, 1999), a substantial increase on the 1,321,100 businesses in the UK in 1980 (Ganguly, 1985). After sustained increases in the number of new UK businesses over the past twenty years, the growth in the number of new firms appears to have slowed considerably. Growth in net new firm formation also appears to have become more regionally concentrated. In 1998, London and south-east England experienced a net growth of 20,900 enterprises, compared with only 8,500 across the rest of Great Britain (Keeble, 2000). While there are a number of statistical sources capable of profiling the SME sector in the UK, few provide specific information on gender of business ownership. Women are often self-employed , they rarely recognize the status of entrepreneurs. It is therefore difficult to obtain statistics on women entrepreneurs.

While there have been fluctuations in the number of self-employed women over the past decade, the female share of self-employment has remained relatively constant. In 1990, women made up 24% of the self-employed population. In 1999 this had increased to 25.8% (Table 2). A larger increase has been seen in the rate of female self-employment which has grown from approximately 3.12% of total females economically active in 1979 to 6.76% in 1997. During the same period, the rate of male self-employment increased from 9.27% of total males economically active in 1979 to 15.43% in 1997 (Carter, 2000). Brooksbank’s (2000) analysis of the Labour Force Survey suggests that gender based interpretation of LFS self-employment data should be treated cautiously. In particular, Brooksbank suggests that the absolute rise in female self-employment between 1979 and 1997 appears to have been largely caused by the overall increase in the number of women in the labour market as a whole, rather than a dramatic spurt in female entrepreneurship.

Women represent nowadays 45% of the employed population, but their presence declines gradually as the hierarchical levels increase. They are virtually absent from the boards and still few to venture into entrepreneurship.

The main disadvantages that woman can have can be :

• Variety of roles (occupation, family)

• Social and cultural barriers (prejudices against women entrepreneurs)

• Psychological barriers (lack of confidence of women themselves)

• Lack of childcare facilities for infants

• Distrust of lenders

• Difficulty integrating into a network (the social relations and those informal discussions are often held at the beginning or end of day, time usually spent with family responsibilities)

• Latent discrimination, etc. ..

Nine per cents of working women are heads of companies, whereas this rate was 15% for men. From a global perspective, women represent 35% of entrepreneurs. According to the Trade Register, 25% of businesses are started by women. So, why only a quarter of enterprises are created by women, while nearly 35% of entrepreneurs are women?

Two main reasons (Meyer, Harabi, 1999). First of all, women often become more independent without creating a new society. They develop their business by buying a business or becoming associated (often in the company of their husbands). And secondly, women often create small businesses that are not included in the register of trade (turnover less than £70 000).

Also, the majority of women in business want to own their work, meet new challenges and influence their destiny. The need to reconcile family responsibilities and work is certainly not unconnected to the increasing number of women entrepreneurs who can manage their own schedule. Unlike men, the growth of the company and the profit motivation is rarely the priority objectives (Royston, 2003).

II - Profile of the female entrepreneur

Schrieir’s (1975) pilot study of female business

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