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 Too few SA women become entrepreneurs, but it can change


 Why is it that, 24 years into our constitutional democracy which famously advocates for equality of the sexes, the level of entrepreneurship among South African men and women are still much less equal than the country’s economic peers?

Clearly, a progressive constitution, although it must help, is not nearly enough to ensure that women join the local community of entrepreneurs in equal numbers to men, says Gugu Mjadu, executive general manager: marketing at Business Partners Limited.

The latest figures from the 2017/2018 Global Entrepreneurship Monitor, which measures how many people are busy starting up businesses in a given year, show that 13 out of every 100 South African men are involved in total early-stage entrepreneurial activity, compared to just fewer than 9 out of every 100 women.

The research shows that the inequality goes deeper than just the headline figure. A higher percentage of women than men who do start their own ventures do so out of necessity (34.3% for women vs. 18% for men), because they have no choice. South African men are more likely to start a business in response to an opportunity (82% for men vs. 65.7% for women). This is an area of improvement as the difference impacts women’s economic status as the research shows that opportunity entrepreneurs are more likely to create wealth and further opportunities than necessity entrepreneurs.

The GEM study is an annual survey, and dishearteningly, a look at the GEM figures over a number of years shows no discernable trend towards closing the gap, while some of South Africa’s economic peers such as Brazil and Vietnam consistently show an equal number of men and women starting businesses.

One possibility, says Mjadu, is that gender parity in entrepreneurship needs a consistent stretch of truly high economic growth, north of 6%, to shake lose any remaining cultural, psychological and economic chains that are keeping women back. Unlike its counterparts, South Africa’s economic growth over the past few decades has seldom breached 4%, and has hovered around 3% since 1994.

This might also explain the general low levels of entrepreneurship in the South African population, among both men and women, compared to its economic peers – 11% of the South African population is involved in entrepreneurial activity. Wealth creating businesses start in response to opportunities, which multiply when economic growth is strong.

Short of a massive economic stimulus needed to propel South Africa’s economic growth upward, is there anything that can be done on an incremental level in order to establish entrepreneurial equality between men and women in South Africa?

Mjadu is adamant that there are many low-key ways in which to entice more women to become self-starters.

One place to start, she believes, is to focus on the income-generating side-lines that many South African women are engaged in. A scan of social media shows that South African women are not short of ideas nor initiative. From activities that are traditionally seen as female such as baking and sewing, to truly innovative social clubs and online initiatives seem to provide an outlet for many women’s entrepreneurial urges. Yet too few of them develop into proper full-time careers.

Programmes focused on women and their side-hustles might find fertile ground to grow them into fully fledged businesses.

Another factor that might entice more women to start businesses is more accessible finance. There is no easy solution, however. Mjadu says research shows that men are more likely to start looking for finance early when they launch their ventures. Women, on the other hand, are more likely to use own funds to start a business thus delay seeking finance until their venture is deep in trouble.

The solution, if any, lies in education and training deep enough to effect a significant shift in mindset. Given the poor state of the educational system, South Africa still has far to go, but it could be argued that any incremental improvement in the education system would boost the country’s levels of entrepreneurship.

It remains to be seen if an increase in gender equality and representivity among bankers and financiers may lead to improved access to finance for female entrepreneurs, but because it is a good thing in itself, gender parity in the finance industry is worth pursuing, says Mjadu.  

The celebration of female entrepreneurship in popular culture, social media and as part of cultural events remains important and probably cannot be overdone, believes Mjadu. Awareness of the possibility of success in the business world by females remains fundamental to any young woman’s decision to choose entrepreneurship.  

Finally, a strengthening of the profile of women’s business associations in South Africa can become an important factor in increasing the number of female entrepreneurs, says Mjadu. Organisations built by business women and that speak loudly and assertively for business women will send an unambiguous message that women belong in the community of entrepreneurs.




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