Women Entrepreneurs In The Industrialized World – Female entrepreneurs play a vital role in creating wealth and jobs. In the face of global competition, large manufacturers in the industrialized world are constantly “downsizing” by reorganizing and laying off workers.
The resulting uncertainties are of great political, social, and economic concern. In this unstable economic environment, entrepreneurial firms are creators of jobs.
Firms with fewer than twenty employees provide a quarter of all jobs. A growing number of these small, new companies are led by women.
In the United States companies owned by women provide 12 million jobs, while the 500 largest firms, the Fortune 500, employ slightly fewer: 11.7 million jobs. Furthermore, these Fortune 500 companies are shedding 200,000 to 300,000 employees each year.
Women Entrepreneurs In The Industrialized World
Female entrepreneurs are innovators, and innovation stimulates general economic growth. Towns that once depended on a single large manufacturer now recognize the wisdom of attracting small entrepreneurial companies.
The resulting diversification contributes to the stability and resiliency of the local economy. Greater local ownership also adds stability, since people who live and work in a community and who serve their neighbors have a personal stake in its well-being. In addition, entrepreneurship is a means of providing economic opportunity for disadvantaged groups, including women, lowwage earners, and minorities.
Women entrepreneurs make another important contribution to economic development by creating wealth as well as jobs. From 1980 to 1988 the number of entrepreneurs in the United States increased 56 percent while the number of female entrepreneurs among these increased 82 percent.
Over the same period, the rate of growth in revenue of women’s enterprises more than doubled that of the entrepreneurial sector as a whole. In the world’s wealthiest countries, there is great diversity of characteristics shared by women who are entrepreneurs or who aspire to create their own economic activity.
Some already are professionals or well-educated people with corporate managerial experience. Others have gained experience through the unpaid work of home management and motherhood. Still others live in a fourth world as the urban poor in wealthy nations and may have little schooling or work experience The rise of women entrepreneurs in industrialized countries is recent.
Before 1970 women entrepreneurs were rare. Since then, however, their increase has been remarkable. An article published by the Paris-based Organization for Economic Cooperation and Development (OECD)5 calls it “one of the most significant economic and social developments in the world.”
New enterprise creation in the industrialized world by men and women differ from country to country. In the United States women create new enterprises half again as frequently as do men.
Nationwide, women own 9.1 million businesses, or 38 percent of all U.S. companies. Female-owned businesses in the United States generate more than $3.6 trillion in annual sales. From 1987 to 1999, the number of woman-owned firms in the United States increased by 103 percent, employment by 320 percent, and sales by 436 percent.
Women entrepreneurs in the United States employ 27.5 million people. Even more encouraging, firms owned by minority women are increasing at triple the national rate. Data from 1996 indicated that one in eight (13 percent) of the woman-owned businesses in the United States was owned by a woman of color.
In Canada, women own about 22 percent of all companies with paid employees. Women represent the fastest-growing segment of the small business sector.
Between 1980 and 1985 they were responsible for more than half the increase in owner-operated businesses. Women entrepreneurs in Canada have staying power. A recent study found that 47 percent of woman-owned businesses were still in business after five years, as compared with 25 percent for men.
Nevertheless, women appear to have more difficulty than men in obtaining startup capital, even though their default rate in at least one business loan program (the Ontario New Ventures Program) is about half the rate for male entrepreneurs.
A study by the Canadian Federation of Independent Business found that collateral requirements for women were higher than for comparable male entrepreneurs. Other studies have reported similar findings.8 Since 1990, women in eastern Germany have created a third of the new enterprises, providing 1 million new jobs and contributing $15 billion annually to the gross national product.
Viola Winkler is a woman on the go. When not dashing to catch a flight to one of her branch offices in Hamburg, Frankfurt, or Moscow, she often spends late nights organizing trade fairs on starting small businesses. Ms. Winkler is head of the Saxony Training Institute in Dresden, Germany, which trains prospective entrepreneurs in management, marketing, and other business skills.
When an important call comes in, she springs from the meeting table and darts for her office, her heels leaving indentations in the blue-carpeted hallway. A lot of other eastern German women would like to follow in her tracks. One-third of eastern German businesses are owned by women, compared with one-fourth to one-fifth in western Germany, according to the German Federal Labor Bureau.
Women head 150,000 firms employing roughly 1 million people, at a time when German unemployment stands at nearrecord levels. One reason many east German women became entrepreneurs is that they were laid off after German unification in 1990.
“Women were the first to be removed from the work force,” Winkler says. As waves of unprofitable, uncompetitive Communist-era factories were shut down between 1990 and 1995, 1.6 million women lost their jobs, compared with 1.2 million men.
Under Communist rule, more than 90 percent of women worked. The regime, at least officially, sought high female employment on ideological grounds.
Some analysts say, however, that the motive was less equality than making sure that families were forced to rely on the state to care for their children. Either way, most east German women today prefer not to stay home.
Three times as many east German women as west German women seek to return to jobs after two years of maternity leave—a year less than what they are legally entitled to.
“It’s a society thing,” says Ilona Weisbach, who owns and manages a small textile factory in the town of Hormersdorf, 8 The Rise of Women Entrepreneurs west of Dresden.
“We received good training. We worked, and we were used to earning our own living and being independent.” Since Ms. Weisbach opened her factory, it has grown from six to thirty employees, twenty-seven of them women.
Weisbach sees her factory as more than just a way of attaining independence and turning a profit. “It’s a matter of social responsibility to the people in the region,” she says.
Social concerns are a pressing issue for women in Germany. Many see themselves as underrepresented not only in business, but in politics as well.
Women have been raising their voices during “Frauen Power Woche,” a week of demonstrations, debates, and self-help seminars that kicked off on International Women’s Day. An important source of support, say Weisbach and other businesswomen, is their families.
Weisbach’s husband, Lothar, in addition to pitching in on domestic chores, is also one of her three male employees. He does everything from maintaining machinery to marketing.
But, she makes clear, “I am the boss.” Entrepreneur Winkler, despite her own success, says the situation is indeed difficult for eastern German women. She says they face discrimination not only because of their gender, but also because of western German stereotypes of easterners as unsophisticated and undereducated. “I have two problems [to overcome],” she says, “I’m a woman, and I’m from the east.