More than half of the world’s economies don’t foster high-growth female-owned businesses. This was a finding in the 2015 Female Entrepreneurship Index (FEI) which revealed that 47 of the 77 countries surveyed scored below 50 points. From a local perspective, South Africa ranked 36th out of 77 countries with an FEI score of 44.2. In comparison, the United States ranked 1st with an FEI score of 82.9.
Gugu Mjadu, executive general manager of marketing: Business Partners Limited (BUSINESS/PARTNERS), says that these figures demonstrate that South Africans need to push even harder for equality in entrepreneurship, but, at the same time, warns that the country must be patient. “Research all over the world shows that when it comes to high growth entrepreneurship, female entrepreneurs are still in the minority. The move to equality is bound to be a slow, generational shift, but one that will require a conscious effort to complete,” says Mjadu.
“However, there is no doubt that women are steadily advancing in the acquisition of skills, with any remaining gaps in academic performance fast closing, and numerous examples of fields of study world-wide in which women as a group academically outperform men. But such advances take a while to filter through into entrepreneurship, as education is only one of the requirements.”
The FEI supports this view by reporting a global increase of 9% in the number of female entrepreneur who are highly educated and a 7% increase in female entrepreneurs who, in the next five years, intend to grow their business by 50% and employ 10 people.
Mjadu says that another key requirement in fostering high-growth female entrepreneurship is management experience and industry networks, which entrepreneurs only build up by spending some time working for someone else. “While women have academically already found their rightful place in nearly every academic discipline, apart from perhaps engineering and computer science, the world of work is less equal. As the workplace generally serves as the incubator of entrepreneurs, one cannot expect equal numbers of male and female entrepreneurs to flow from industries in which males still dominate.”
She says that one effort to shift inequality is affirmative action and, particularly its cousin in the world of entrepreneurship, namely affirmative procurement with its broad based black economic empowerment (BBBEE) scorecard. “While female entrepreneurs still score high under the BBBEE, the enticement of the corporate sector supported by Employment Equity policies will encourage more women to stay in their corporate jobs. This is mainly because they would probably make the same amount money, receive recognition without the risk of associated with running their own businesses.
“From the point of view of an individual aspiring female entrepreneur therefore, there are probably more opportunities for self-actualisation by remaining inside a corporate than stepping out and starting a business.”
But the BBBEE scorecard is just one aspect in which South Africans can and must give more weight to female entrepreneurship, says Mjadu. “Female entrepreneurship must continue to be celebrated. The 2014 Sanlam / Business Partners Entrepreneur of the Year®, for example, was female entrepreneur Adri Kruger, owner of Tzaneen Country Lodge. She was however the 16th female winner out of a total of 51 winners in the competition’s 27 years, thereby indicating the size of the gap that still needs to be bridged locally.”
In terms of improvements needed to raise FEI scores, the index reported that women’s access to bank accounts and financial training programs also needed improvement in Sub-Saharan Africa.
Mjadu says that this, coupled with the index’s finding that there is growing appreciation that the conditions that support women’s ability to start and grow ventures may be different from those that help men, is behind the fundamentals of BUSINESS/PARTNERS’ recently launched Women in Business Fund. Specially aimed at increasing access to finance for female entrepreneurs, the Fund seeks to afford South African women a fair and equal opportunity to start, expand or purchase an existing business.
“Entrepreneurship is the lifeline of a healthy economy and, by creating an environment to support more female-owned businesses, these entrepreneurs can play a significant role by creating their own wealth, improving South Africa’s economy and contributing to much-needed job creation,” concludes Mjadu.
For more information on the BUSINESS/PARTNERS Women in Business Fund, please visit our Women in Business Fund section.