In Ireland men are three times more likely than women to be self-employed
Entrepreneurship policy is a key component of a country’s overarching economic support system. It promotes entrepreneurship, alleviates barriers and facilitates new venture creation and growth.
However, such policies are often gender biased, designed around traditional male models of entrepreneurship and inadvertently discriminate against women.
This was one of the findings of a new report – Entrepreneurship Policies Through a Gender Lens – authored by the OECD and the Global Women’s Entrepreneurship Policy Research Network (globalwep.org). The report offers policy insights from 27 countries across Europe, Africa, North and South America and Australasia.
The report found countries where there was no women’s entrepreneurship policy; countries where the prevailing women’s entrepreneurship policies didn’t work; policies without programmes in operation on the ground and, in some cases, programmes without overarching policies.
The absence of a dedicated women’s entrepreneurship policy, while not uncommon, is a fundamental flaw in efforts designed to encourage and support women entrepreneurs and is partly responsible for the generally lower number of women entrepreneurs throughout the world.
In Ireland, for example, men are three times more likely than women to be self-employed, and there are approximately 1.8 men for every woman who is an early-stage entrepreneur.
The report also revealed that, where women were mentioned within a country’s generic entrepreneurship policy, they tended to be included within the ‘disadvantaged’ or ‘minority’ group, referred to as ‘lacking in skills’, ‘in deficit’ or needing to be ‘fixed’.
Accordingly, most policies and programmes targeted at women entrepreneurs comprised soft skills development, training, mentoring and networking support.
Access to finance was identified as a major barrier to women’s entrepreneurship in several countries, including Ireland, Italy, Spain and the US. Issues around financial literacy, funding criteria and overly complicated application processes further hampered women’s access to available funds.
Across the 27 countries covered in the report, women-targeted financial supports focused on high growth, high tech and export-oriented sectors, yet these are not sectors where women predominate.
Lack of access to financial capital is particularly concerning for women entrepreneurs in Ireland where currently less than 10pc of venture capital funding goes to women-founded companies. In addition, micro and smaller enterprises make less use of external financing instruments than their larger peers and, unfortunately, most women’s businesses fall into this category.
Around 60pc of women-led Irish businesses are in the consumer services – a sector hardest hit by the pandemic and one that will need significant financial support to help it recover.
With only 4pc of women entrepreneurs in Ireland engaged in medium or high-tech businesses compared with 12pc of men, one must wonder why existing higher-level policies and programmes continue to be focused on these sectors.
The report also found that failings in policy and programme support were deemed to be due to poor design, a privileging of traditional male models of entrepreneurship, weak regulatory systems, a disconnect from the wider entrepreneurial ecosystem, a lack of understanding of the real needs of women entrepreneurs, and the absence of women/women entrepreneurs’ voice in policy/programme management and delivery.
Even countries typically associated with more forward thinking, gender-balanced policies, such as Germany and Sweden, were viewed by the research teams as prioritising male entrepreneurship models.
If governments are serious about ensuring gender equality and sustainability in entrepreneurship support, they need to embed women’s entrepreneurship into their country’s overarching policy framework.
Without a formal government mandate to promote women’s entrepreneurship, effective programmes in operation on the ground risk becoming unsustainable, potentially running out of funding or loosing experienced staff as well as dedicated women’s entrepreneurship champions.
Ireland is in the interesting position of having some effective women-dedicated HPSU (high potential start-up) programmes in operation but lacks the overarching women-dedicated policies to support and sustain them.
In order to improve access to finance for women entrepreneurs in Ireland, government needs to increase the number of women-dedicated funds. Alongside this, the range of eligible sectors and business categories that can receive higher level financial support should be widened to include those in which women predominate, including those with modest growth trajectories, those engaged in locally traded services and those focusing on the domestic market.
While, understandably, government economists may have difficulty prioritising small scale, women-owned service-based businesses over larger male dominated high-tech/high-growth sectors, the sheer volume of women’s businesses and their multiplier effect means that they make a significant collective contribution to the economy – one that cannot be ignored. Targets should be staggered to avoid being seen as off-putting or unrealistic to early-stage women entrepreneurs and substantive financial support packages should be accessible to all women entrepreneurs, especially in rural, remote and disadvantaged areas.
Prof Colette Henry is Head of Business Studies at Dundalk Institute of Technology