Women Entrepreneurship

WOMEN

ENTREPRENEURSHIP

IN AGRO BUSINESS

(MYANMAR)

Dr.P.C.Sabharwal
Senior Adviser,

TABLE OF CONTENTS

I. Introduction

II. Background of Myanmar

III. Economy of Myanmar

IV. Myanmar Women participation in Economy and Agriculture

V. Gender Ratio

VI. Strength, Constraints, Opportunities, and Risks In Myanmar

VII. Developing Policy and Recommendations

VIII. Key policy recommendations

• The role of policy makers when supporting women’s entrepreneurship

• Increase the abilities of women to participate in the labour force

• Listen to the voice of women entrepreneurs

• Incorporate a women’s entrepreneurial dimension in considering all entrepreneurship related policies

• Promote the development of women entrepreneur networks

• Periodically evaluate the impact of any SME-related policies on the success of women-owned businesses and the extent to which such businesses participate.

• Improve the factual and analytical underpinnings of our understanding of the role of women entrepreneurs in the economy

IX. Conclusion

Introduction

The female contribution to the overall economy is high throughout Asia and the Pacific region, particularly in terms of labour input into agriculture. Bangladesh, Bhutan, Cambodia, China, India, Myanmar, Nepal, Pakistan and Vietnam have particularly high percentages of women employed in the agricultural sector, with estimates ranging between 60 and 98 percent. Indeed, in most Asian countries the number of women employed in agriculture as a percentage of the economically active population (EAP) is higher than that of men. As FAO reports, "this finding is even more significant given that data for the economically active population in agriculture tends to exclude the unpaid work by rural women in farm and family economies. If unpaid work were included, the figures for female employment in agriculture would be even higher. Women’s increased responsibilities in recent decades for reproducing and maintaining the family, in most lower-income countries, have resulted in rather complex and demanding livelihood strategies. These diversified livelihood strategies have to respond to the internal and external dynamics that typically influence rural families, such as: • Increased out-migration by men, leaving women with sole responsibility for their families. • Increased economic vulnerability to global market forces as traditional foods become less economical to produce, rural incomes decline, commercial agriculture becomes more input-intensive, and productive resources are dominated by agribusiness. Myanmar is essentially an agrarian economy with two-thirds of the total population engaged in subsistence agriculture.Agriculture, which includes crop production, hunting, fishing, and forestry, is the mainstay of the Burma economy. This sector is responsible for much of the income and employment in the country. About 60 percent of the GDP comes from agriculture, and as much as 65 percent of the labor force is employed in this sector alone. Burma produces enough food to feed its entire population. In the absence of purchasing power, however, many people go hungry. Further, about a third of the rural households do not have any land or livestock. Only half of the arable 45 million acres is under cultivation.Rice is the most important agricultural commodity of Burma. Rice production increased from 5,200,000 metric tons in 1950 to 16,760,000 metric tons in 1993. The crop is cultivated along the river valleys, coastal areas, and in the Irrawaddy River delta. A wide variety of crops are cultivated in the northern dry zone. Rubber and other commercially useful products are cultivated in the Irrawaddy and Tenasserim regions. Agricultural products form the bulk of the export trade and include rice, teak, prawns, beans and pulses, and opiates.Burma's agriculture is heavily dependent on the monsoon rains. While some areas suffer from too much rain, other regions receive too little. Government efforts in the 1990s increased the amount of irrigated land to 2.2 million acres. Many agricultural products like tobacco, sugar, groundnut, sunflower, maize, jute and wheat, however, have not reached their pre-1985 production levels. This reduction is offset by higher production in rice, pulses and beans. Rice production increased due to supportive government policies as well as favorable market forces. According to Asian Development Bank estimates, however, real annual growth in agriculture declined from 5.0 percent in 1996-97 to 3.7 percent in 1997-98 and to 2.8 in the 1998-99 fiscal years. Further, per-acre yield of the crops has not increased because of inadequate application of fertilizers and pesticides. One factor that helped to improve production was the removal of government controls over the agricultural sector. Deforestation has been a major concern in Burma. The slash-and-burn method of agriculture is destroying the forests of the country, causing soil erosion and depletion of fertility. Periodic droughts, floods, landslides, and cyclones sometimes have devastating effect on agriculture. For example, flooding in Pegu and Irrawaddy during the 1997-98 growing season did considerable damage to rice production. Consequently, Burma exported only 28.4 thousand metric tons of rice in the 1997-98 season as opposed to 93.1 thousand metric tons in the previous year. The heavy reliance on monsoons is a major handicap for Burmese agriculture. The authorities have recently renovated dams and reservoirs, built new ones, pumped water from rivers and streams and taken other measures to improve irrigation. More remains to be done in this regard. Another impediment to agricultural improvement is the inability of farmers to secure adequate loans to enhance cultivation. Private lenders charge exorbitant rates, and there are not enough banking institutions to serve people in the rural areas. As a result, farmers are not able to buy fertilizers and pesticides for their crops. Financial services need to be improved to make funds available to the cultivators. The economic liberalization policies of the military junta have transformed the agricultural sector. Under the new economic system, the government distributed land among the landless, improved irrigation facilities, and increased the floor price of paddy that the government procures from the farmers. Some private activity in the export sector has been allowed since economic liberalization began in 1989. Consequently, the share of the agricultural sector in the GDP has gone up.

Myanmar brief history In Myanmar 50.3% of the total population are women. Thus the women outnumber the men. The status of Myanmar women has always been high since the days of the Myanmar Kings. They enjoy equal rights as men. The literacy rate of women is 73%. There is no gender discrimination in the education system. The government is making concerted efforts to promote the education status of women and children especially in the rural and remote border areas.

Women had been active not only in the palace but also had taken part in working force in Myanmar. Since the time of Myanmar Kings till the present day, they have toiled in the rice fields, represented in large business. There have also been many famous singers, artistes, poetess, etc and have also fought beside men in protecting the sovereignty of the country.

Findings from a study completed by FAO (Khin Pwint Oo, 2003) in Myanmar, record rural women’s key contributions to household food security marked by diversity in work patterns in agriculture and food production, but there is evidence of gender role flexibility as occasion demands. Traditionally, men’s agriculture activities include land preparation, ploughing and levelling fields, whereas sowing, transplanting, weeding and reaping are women’s work. Post-harvest activities of threshing, winnowing, seed management and transporting grains from field to home is the work of both men and women. Women from poorer households are more involved in agriculture fieldwork than those from less poor families. Poorer women are also heavily involved as family farm workers and agricultural labourers to contribute to family income and food security. Women also participate in the cultivation of secondary crops and work as waged agricultural labourers in cash crop production. Home garden cultivation is the responsibility of women.

Myanmar is changing to the market economy and as such, not only the government sector, but also the private sectors are playing an important role. As such, more women are entering the private sectors, contributing a significant labour force. The legal system of Myanmar provides equal rights to women and men in the area of business and commerce. With regard to women in the profession, women outnumber men in the field of education and nursing, while 50% of women are doctors. In Myanmar family, there is no preference for boys. Both boys and girls are equally loved. Some may attach more values for girls. There is a Myanmar saying: When a daughter is born parents' usually say, "assurance of an additional dish on the dining table".

Economy of Myanmar
Burma, a resource-rich country, suffers from pervasive government controls, inefficient economic policies, corruption, and rural poverty. Despite Burma's emergence as a natural gas exporter, socio-economic conditions have deteriorated under the mismanagement of the previous regime. Approximately 32% of the population lives in poverty and Burma is the poorest country in Southeast Asia. The business climate is widely perceived as opaque, corrupt, and highly inefficient. Wealth from country's ample natural resources is concentrated in the hands of an elite group of military leaders and business associates.

In 2010-11, the transfer of state assets - especially real estate - to military families under the guise of a privatization policy further widened the gap between the economic elite and the public. The economy suffers from serious macroeconomic imbalances - including multiple official exchange rates that overvalue the Burmese kyat, fiscal deficits, lack of commercial credit further distorted by a non-market interest rate regime, unpredictable inflation, unreliable economic data, and an inability to reconcile national accounts. Burma's poor investment climate - including weak rule of law - hampers the inflow of foreign investment; in recent years, foreign investors have shied away from nearly every sector except for natural gas, power generation, timber, and mining. The exploitation of natural resources does not benefit the population at large. The most productive sectors will continue to be in extractive industries - especially oil and gas, mining, and timber - with the latter two causing significant environmental degradation. Other areas, such as manufacturing, tourism, and services, struggle in the face of poor infrastructure, unpredictable trade policies, undeveloped human resources (the result of neglected health and education systems), endemic corruption, and inadequate access to capital for investment. Private banks still operate under tight domestic and international restrictions, limiting the private sector's access to credit. During the past decade the United States, the European Union, and Canada had imposed financial and economic sanctions on Burma. US sanctions prohibited most financial transactions with Burmese entities, imposed travel bans on senior Burmese military and civilian leaders and others connected to the ruling regime, and banned imports of Burmese products. These sanctions affected the country's fledgling garment industry, isolated the struggling banking sector, and raised the costs of doing business with Burmese companies, particularly firms tied to Burmese regime leaders. Many of these sanctions are being lifted, in response to the new liberalization that is taking place in Burma. Remittances from overseas Burmese workers - who had provided significant financial support for their families - have driven the Ministry of Finance to license domestic banks to carry out overseas operations. In 2011 the government took initial steps toward reforming and opening up the economy by lowering export taxes, easing restrictions on its financial sector, and reaching out to international organizations for assistance. Although the Burmese government has good economic relations with its neighbors, significant improvements in economic governance, the business climate, and the political situation are needed to promote serious foreign investment.

|GDP (purchasing power parity) |$89.23 billion (2012 est.) |
| |$84.02 billion (2011 est.) |
| |$79.67 billion (2010 est.) |
| |note: data are in 2012 US dollars |
|GDP (official exchange rate |$54.05 billion (2012 est.) |
|GDP - real growth rate |6.2% (2012 est.) |
| |5.5% (2011 est.) |
| |5.3% (2010 est.) |
|GDP - per capita (PPP) |$1,400 (2012 est.) |
| |$1,300 (2011 est.) |
| |$1,300 (2010 est.) |
| |note: data are in 2012 US dollars |
|GDP - composition by sector |agriculture: 38.8% |
| |industry: 19.3% |
| |services: 41.8% (2012 est.) |
|Population below poverty line |32.7% (2007 est.) |
|Labor force |33.41 million (2012 est.) |
|Labor force - by occupation |agriculture: 70% |
| |industry: 7% |
| |services: 23% (2001 est.) |
|Unemployment rate |5.4% (2012 est.) |
| |5.5% (2011 est.) |
|Household income or consumption by percentage share |lowest 10%: 2.8% |
| |highest 10%: 32.4% (1998) |

Myanmar Women and Economy

In business world, by law, Myanmar women can work on equal terms with men. The state holds seminars and workshops to develop the role of Myanmar women. According to market oriented system, there exist companies, hotels and economics organization led by women. Since Myanmar is an agricultural country, women had to perform agricultural tasks previously. But now the number of women who work in factories, services and companies has increased.

The fact that Myanmar women are executive members of The Union of Myanmar Federation of Chambers of Commerce and Industry convey that business women are highly qualified in business world. We can also see that graduate young women can undertake well in economy and lead private firms.

According to the research on (30) women who are outstanding performers of economy is that women are young and make substantial economy equally with their spouses. They have self confidence and leading ability to manage the duties of their families and economy efficiently. In 2004, Myanmar Women Entrepreneurs Association accepted ASEAN Youth Award in Brunei.The rate of the economic activity of Myanmar women is equal to those of ASEAN countries and more than some countries.

Women’s participation in economic activity throughout Asia and the Pacific region, and the relative share of male and female labour force participation in agriculture, are presented in Table Below. The data indicate that in South Asian countries like Bangladesh, Bhutan, India, Nepal and Pakistan, a particularly high percentage - more than 60 percent and up to 98 percent - of women are employed in the agriculture sector. Indeed, more women than men are employed in agriculture in each of these countries. In East and Southeast Asian countries such as Cambodia, China, Lao PDR, Myanmar and Viet Nam women also make a substantial contribution to the agriculture sector. For instance, among the economically active population, women’s participation in the agriculture sector in Cambodia is 78 percent, and 81 percent in Lao PDR. The data illustrate that in most Asian countries, a larger number of women than men are employed in agriculture as a percentage of the economically active population. Such a finding is even more significant given that the data for the economically active population in agriculture in Table exclude rural women’s unpaid work contributing to value addition in the farm and family milieu.

As a result, it is reasonable to believe that a considerable proportion of women’s contribution to agricultural labour throughout the region is invisible in macro statistics. If unpaid work were included, the figures for female employment in agriculture and rural production would be even higher. Female economic activity pattern in selected Asia and Pacific region countries
| |Human development status |Food security status |Female economic activity|Economically active in agriculture as a |
| | | |rate |percent of total population |
| | | |(age 15 and above) | |
| |
|Bangladesh |138 |Yes |66.4 |76 |
|Union |3,344,516 |100 % |2.9 % |71.6 % |25.5 % |
|Male |2,847,426 |85 % |2.0 % |79.4 % |18.6 % |
|Female |497,090 |15 % |3.7 % |63.8 % |32.5 % |

Size and % of agricultural holding by sex

|Agricultural |All |Male |Female |
|Holding |Holding | | |
|Union |3,344,516 (100 %) |2,847,426 (85 %) |497,090 (15 %) |
|Without land | | | |
| |6364 |83 % |17 % |
|Under 1 ac | | | |
| |471782 |77 % |23 % |
|1 ac ≤ 3 ac | | | |
| | | | |
| |766422 |86 % |14 % |
|3 ac ≤ 5 ac | | | |
| |635806 |87 % |13 % |
|5 ac ≤ 10 ac | | | |
| | | | |
| |796439 |86 % |14 % |
|10 ac ≤ 20 ac | | | |
| | | | |
| |504426 |86 % |14 % |
|20 ac ≤ 50 ac | | | |
| | | | |
| |157945 |87 % |13 % |
|50 ac and over | | | |
| |5332 |92 % |08 % |

| | |

Summary of Gender Statistics in Agriculture

|Sector |Male |Female |
|Agricultural |85 % |15 % |
|Holding | | |
|Employment in Agriculture |77.66 % |22.34 % |
|Hired Labor |31 % |69 % |
|Economic |75.6% |67.8% |

Strengths, Constraints, Opportunities, and Risks In Myanmar

Emergence from a long period of relative isolation, coupled with a desire for reform and change, heralds a bright future for Myanmar. The country can exploit its strengths, notably abundant natural and human resources, and capitalize on the opportunities available from an international community that wants it to succeed and from its location at the heart of the world’s most dynamic region. However, there are considerable constraints to surmount. This section analyzes the strengths, constraint opportunities, and risks that are evident at the current, crucial time of change.

Strengths

1. Strong commitment to reform 2. Large youthful population, providing a low-cost labor force attractive to foreign investment 3. Rich supply of natural resources—land, water, gas, minerals 4. Abundant agricultural resources to be exploited for productivity improvement 5. Tourism potential
Opportunities

1. Strategic location 2. Potential of renewable energy 3. Potential for investment in a range of sectors

Constraints

1. Weak macroeconomic management and lack of experience with market mechanisms 2. Limited Fiscal with market mechanisms 3. Underdeveloped Financial Sector 4. Inadequat e infrastructure, particularly in transport, electricity access, and tele-communications 5. Limited Economic diversification. 6. Low education and health achievement
Risks

1. Risks from economic reform and liberalization

2. Risks from climate change

3. Pollution from economic activities

4. Tension From internal ethnic conflicts

Strength

A strong commitment to broad-ranging reforms, coupled with a rich supply of natural assets—abundant land, water, and energy resources; a youthful, low-cost labor force; and Myanmar’s strategic location—provide a strong foundation for high and inclusive growth.

Strong Commitment to Reform. Myanmar has demonstrated a strong commitment to a broad range of reforms. Political reforms that demonstrate the government’s commitments to change are highlighted by
(1) the inauguration of a civilian government in 2011, with the release of political prisoners, the easing of media controls, and the institution of a dialogue of national reconciliation; and

(2) new laws that allow assembly, labor rights, and political participation. Western nations have responded to these initiatives by easing, suspending, or lifting sanctions on trade and investment.

Key economic reforms have followed. State enterprises are being privatized. Foreign investment is being encouraged by easing restrictions on the use of private land and the repatriation of profits. The new law grants CBM increased autonomy to set monetary policy. In the financial sector, changes are designed to improve access to credit and intermediation, including easing interest rate controls and allowing private banks to expand their branch networks. Reforms in social spending are also apparent, as the recent large increases in the education and health budgets confirm. The government appears committed to creating a more inclusive, market-oriented, and private- sector-led economy and one that is open to increased foreign investment.
Young Population. Myanmar’s youthful population will generate a demographic vidend now and in the coming decades. The 15–28 age cohort currently has 13 million young people who are contributing and will continue contribute their effort and skills to enhancing productivity and competitiveness . This cohort alone accounts for nearly 40% of the working age population. People below rking age also constitute a large portion of the population (25%)—higher than in the PRC (19%) and Thailand (20%), although lower than in India (30%). With proper schooling and skills or professional training, in the years ahead, they will provide the human capital necessary to ve Myanmar’s economic transformation. At the other end of the demographic spectrum, the old age dependency ratio is low, with the share of people 65 and over equal to only 7.4% of the working age population. This is on par with India, at 7.7%, but substantially lower than in the PRC, at 11.5%, and Thailand, at 12.9%.

Constraints

Key constraints to sustaining growth include a weak macroeconomic management framework devoid of market mechanisms, infrastructure, inadequate social services dampening the quality of human capital, and limited industrial diversification.

Weak Macroeconomic Management. Myanmar’s weak macroeconomic management and underdeveloped financial sector could threaten domestic economic and financial stability. Chronic fiscal deficits and high inflationdue to monetizationof the deficit have been serious concerns, and are currently being addressed by major reforms in the MOFR and CBM. With the absence of a formal monetary policy framework, uncertainty about monetary stability may hamper investment and the economy.

Limited Resource Mobilization. A strong tax system is essential to create adequate country. Government operations are hampered members, Myanmar has one of the lowest ratios of government revenues and tax collection to GDP. Low levels of personal and commercial income tax collection can be explained by factors including weak institutions, a relatively small tax net, and substantial tax concessions for companies. Moreover, unclear tax legislation, the lack of an advance ruling system, and the broad discretionary powers afforded by the tax authorities (for example, with respect to applying tax treaties) are also likely to discourage investment and business activity and therefore inhibit tax collection.

Underdeveloped Financial Sector. The financial sector remains largely undeveloped hampering effective mobilization of domestic saying for investment. Access to finance in Myanmar is limited, particularly in rural areas. The number of commercial bank branches per 1,000 square kilometers was only 0.85 in 2010 and some areas had no bank branches.

Inadequate Infrastructure. Myanmar lags behind many of its regional neighbors in both the availability and quality of key infrastructure and related services.

Low Education and Health Attainment. Improvements in education and health will help to relieve the human capital constraint that currently inhibits Myanmar’s economy from knowledgeable workers are essential to improve the performance of farms and businesses, as well as the government’s operations. Recent government action to review and improve the performance of the education sector, as well as a recent and substantial increase in budgetary commitment to education and health care, demonstrate the increased importance placed on human capital, a key ingredient for economic growth and structural transformation.

Opportunities

Myanmar’s recent reforms open up a wide range of economic opportunities (including foreign investment in key sectors that are outdated due to decades of isolation), with its strategic location playing a key role.

Strategic Location. Myanmar’s strategic location between the region’s two emerging economic superpowers and between Asian subregions provides enormous opportunities to South–South trade and increased connectivity within the region will make Myanmar’s geographic position increasingly important in the years ahead.

Potential of Renewable Energy. Myanmar has abundant renewable energy potential from hydro, biomass, wind, and solar resources.

Potential for Investment in a Range of Sectors. As it modernizes and liberalizes its economy, Myanmar offers opportunities for investors, both foreign and domestic, in virtually all sectors. The services sector, in particular, economy. Telecommunications, including mobile telephony, is in urgent need of investment.

Risks

Risks associated with economic reform and liberalization, climate change and environmental degradation, and internal conflicts could be significant.

Risks from economic reform and liberalization. Myanmar is undertaking a range of economic reforms, which entail a greater use of the market mechanism to allocate resources and manage such key aspects as investment, interest rates, and foreign exchange. Without adequate regulation, supervision and risk mitigation, the pace and sequencing of the reforms and liberalization may undermine the expected benefits.

Risks from Climate Change. Myanmar can profit from lessons the region’s early transformers learned when they overlooked the importance of environmental sustainability.

Pollution from Economic Activities. Increased economic activity threatens the environment due to mining-related pollution, reservoir clearing, and industrial waste and sewage discharge near urban areas. If unregulated and unmonitored, major negative impacts on the environment can be expected, notably as FDI concentrates on energy and extractive industries.

Within Myanmar, awareness of environmental disturbance caused by mining is increasing but has not yet been accompanied by a substantive regulatory response. While the country lacks a national policy target for environmental improvement in the mining sector, some relevant sector policies exist, including the 1994 Mines Law, which is intended to protect the public and the environment from mining activities that may be detrimental to them. Attention is now being devoted to enhancing environmental monitoring in mining areas. Demands are also being made on the mining industry to acquire and report environmental data, comply with applicable industry standards, and adopt the best environmental practices.

Internal Conflict: Political and social tension within Myanmar remains a potentially destabilizing factor, as long-running ethnic comprises 68% of the population; the next largest groups are the Shan (9%) and Karen (7%) (Ekeh and Smith 2007). Creating a harmonious society provides a foundation for inclusive and sustainable growth. The government can help create such a society by promoting understanding of the country’s different cultures; by engaging in efforts at national reconciliation; by ensuring that members of ethnic groups have equal access to public services, jobs, and other economic opportunities; and by building the infrastructure necessary for increased connectivity between rich and poor areas.

Developing Policy Recommendations For Women Entrepreneurship

Major findings

The various study addresses an important but neglected topic by investigating the role of women’s entrepreneurship in the economy. The purpose is fourfold. First, based on published research, we try to estimate the economic impact of women’s entrepreneurship. Second, based on this assessment of the current situation in relation to needs we have to better understand this topic, we suggest a number of ways to improve data and statistics on the topic. Third, we develop an Austrian economic model to understand how women’s entrepreneurship differs from men’s entrepreneurship. Fourth, based on the major findings in this study we develop a limited number of policy recommendations. The major findings are:

• Independent of the way different studies have been conducted, we find that women entrepreneurs have an important impact on the economy, both in their ability to create jobs for themselves and to create jobs for others. They have an important impact on the economy both by the number of small firms they are able to create, but also because a number of them are able to create growing firms.

• In all countries women still represent a minority of those that start new firms, are self- employed, or are small business owner-managers. Obviously, this economic resource, if not untapped, has not been successfully explored yet. We still do not know what the actual economic impact of women’s entrepreneurship is in most OECD member countries.

• Women’s entrepreneurship must be examined both at the individual level (i.e. the choice of becoming self-employed) and at the firm level (the performance of women owned and managed firms) in order to fully understand the differences between men’s and women’s entrepreneurship.

• Women’s entrepreneurship depends on both the situation of women in society and the role of entrepreneurship in that same society. We are therefore dealing both with the factors that affect the gender system and the factors that affect entrepreneurship in society.

• The quantitative and qualitative aspects of women’s entrepreneurship are dependent on both demand side (political and institutional framework, family policy and market sources) and supply side factors (the availability of suitable individuals to occupy entrepreneurial roles).

• We find specific obstacles to women’s entrepreneurship: type of education, lack of role models in entrepreneurship, gendering of entrepreneurship, weak social status, competing demands on time and access to finance.

Key policy recommendations

Policy measures to support women’s entrepreneurship can go along some different lines. Policy makers can:

• Increase the ability of women to participate in the labour force by ensuring the availability of affordable child care and equal treatment in the work place. More generally, improving the position of women in society and promoting entrepreneurship generally will have benefits in terms of women’s entrepreneurship.

• Listen to the voice of women entrepreneurs. The creation of government offices of women’s business ownership is one way to facilitate this. Such offices could have programme responsibilities such as providing women’s business centres, organising information seminars and meetings and/or providing web-based information to women who are already entrepreneurs and who have important insights into the changes needed to improve women’s entrepreneurship.

• Incorporate a women’s entrepreneurial dimension in the formation of all SME-related policies. This can be done by ensuring that the impact on women's entrepreneurship is taken into account at the design stage.

• Promote the development of women entrepreneur networks. These are major sources of knowledge about women’s entrepreneurship and valuable tools for its development and promotion. Co-operation and partnerships between national and international networks can facilitate entrepreneurial endeavours by women in a global economy.

• Periodically evaluate the impact of any SME-related policies on the success of women-owned businesses and the extent to which such businesses take advantage of them. The objective should be to identify ways to improve the effectiveness of those that should be retained. Good practices that are identified in this way should be disseminated and shared internationally.

• Improve the factual and analytical underpinnings of our understanding of the role of women entrepreneurs in the economy. This requires strengthening the statistical basis for carrying out gender-related cross-country comparative analyses and longitudinal studies of the impact of important developments and policies, especially over time.

The role of policy makers when supporting women’s entrepreneurship

According to the economic perspective, there are two processes are of special interest to policy makers wanting to support entrepreneurship, women’s entrepreneurship and economic growth (Metcalfe, 1994):

• The process that decides the variation in the number of different entrepreneurial opportunities that can be exploited. This process is known as variation. Differently stated, that as many people with different backgrounds would have the opportunity to discover and exploit an entrepreneurial opportunity. The higher the variation on the market, the higher is the probability of new innovations and business opportunity to be introduced and exploited.
• The process that changes the relative economic weight between different competing entrepreneurial opportunities. This process is known as selection. Selection processes must be monitored so that they with their internal logic do not lead to a concentration of resources and information that reduces the possibilities for future variations and development. In the absence of an effective competitive mechanism, selection will lead to a concentration of resources and information. Therefore, competition within and between markets (existing and new) must often be monitored to mitigate monopolistic tendencies.

Basically, it is a question of dynamism and how competition leads to economic development and growth that can be understood as an interaction between variation and selection. Variation in entrepreneurial opportunities and individuals exploiting them leads to selection, where new opportunities come to compete with existing ones. Different positive and negative feedback processes in turn define which variations are selected that is, those opportunities which survive and prosper.

Policy makers consequently have two goals:

1. To contribute to variation (that is, as many opportunities as possible should be tested on the market). 2. To secure that the selection mechanisms over time do not diminish the variation in entrepreneurial opportunities.

In other words, policy makers should aim to encourage that as many entrepreneurial opportunities as possible are tested on the market, while at the same time the selection processes do not evolve in such a way that the creativity and competition that leads to variation is hampered. For example, selection processes may lead to only one type of firm and entrepreneurial opportunity being selected for survival and consequently entrepreneurs learn to only exploit this type. This can be expressed as only certain parts of the population engaging in entrepreneurial activities (e.g. only rich men with a high education), that only some types of firm can grow (e.g. ICT firms at the end of the 1990s), or that an industry is favoured in terms of resources attracted (e.g. venture capital being attracted by firms in biotech and life sciences), which in turn attracts entrepreneurs (fitting the stereotypic profile of what represents a successful entrepreneur). The political focus is then no longer to try to solve a market imperfection or optimise output relative to a specific goal. It is instead about stimulating the exploitation of new entrepreneurial opportunities. This means that policy makers should pay special attention to how the market functions in terms of selection and variation of entrepreneurial opportunities.

This means specifically in this case, in which way does society and the market disfavour the entrepreneurial opportunities identified and exploited by women? In order to accomplish this, more knowledge is needed about the economic impact of this group and where in the entrepreneurial process this group is negatively selected relative to men entrepreneurs. This means creating better knowledge and so as to change the present situation, change the dominant selection forces and increase variation in order to increase women’s participation in the entrepreneurial process.

Increase the abilities of women to participate in the labour force

Women’s entrepreneurship is both about women’s position in society and about entrepreneurship. We have presented substantial research evidence that being of the female sex still represents a substantial disadvantage in all of the economies surveyed. Women have a relatively weaker position than men in society. Of course important variation exists among countries and the relationship between equal opportunities and entrepreneurship is not always straightforward. We have seen that in many countries, especially in developing economies, women are pushed into entrepreneurship, because they do not have any other alternative. In these cases, the weak position of women in society combined with a weak economy leads to high rates of entrepreneurship. This can be compared to more developed economies that have lower rates of entrepreneurship because women have other options that are at that particular time, better suited to their needs and their beliefs of what they are able to do and not able to do.

The advice seems therefore to be that in developing economies, work needs to be focused on improving women’s rights in society so they can start to access education, personal income and the possibility of controlling their own life. Work on creating better possibilities for women entrepreneurs and would be entrepreneurs can also be engaged, but the major benefits will be achieved when equal opportunities apply to all sectors of the economy. Only then can variation be optimised. In order words, it is about changing the economy from push incentives to pull incentives to entrepreneurship. In transition economies and in developed economies, it is more a question of opening up yet another option for women in which they can invest. Work must here focus more on creating better possibilities for women entrepreneurs and would-be entrepreneurs. Hence, further work to increase the pull incentives to entrepreneurship for women.

In developing countries the main challenges are related to eliminating poverty and related problems such as lack of basic education and poor health. This is a specific challenge for many Asian, African and Latin American economies. Women are often those who have to take the greatest responsibility and support to change their situation (such as microfinance and education) has shown to have larger positive effects on economic development than the same support when directed to men. One reason is that it gives women the opportunity to create their own income through self-employment.

Closely related to economic development and self-employment in these countries is the role of the informal sector (Gallaway & Bernasek, 2002; Heemskerk, 2003). Women are disproportionately represented in this sector. This is problematic as the general perception is that of the informal sector being an inferior alternative to the formal sector for employment and self-employment. Hence, women run the risk of being marginalised in this sector. The informal sector can be described by small competitive firms, petty retail and services, labour intensives methods, free entry and market determined factor and product prices (Todaro, 2000). A pragmatic view is that the informal sector provides the poorest and most marginalised people who cannot access the formal sector with opportunities to earn an income. The argument is that, given barriers to participation of women in particular in the formal sector, promoting and supporting their involvement in informal sector activities is an important survival strategy for them and their families. However, the informal sector is often an inferior alternative to formal sector employment or self-employment in terms of earnings, security and protection from exploitation regarding labour standards, lending terms and other contractual arrangements (Gallaway et al., 2002). One reason that women are pushed into the informal sector is that the formal sector does not allow them to combine household work with waged work. It is therefore important for countries with a large informal sector to initiate activities that allow women to enter the formal sector. This means specifically to accommodate women’s needs for infant and child care and access to formal education. Child care leads to a smaller burden in the form of household work. Better education leads to higher human capital and a higher probability to identify and exploit valuable entrepreneurial opportunities, because they both access information and resources. We have seen that such initiatives will lead to more women being able to become self-employed in the formal sector and thus also create more earnings for themselves and their families.

Another challenge that most economies face today is the economic role of ethnic minorities and the role the women play there. This specific challenge has been identified by for example Canada, the European Union, New Zealand and the United States. This a problem that transition economies and developing economies also share. For example, Russia, Brazil and Israel have large ethnic minorities. Women of ethnic minorities are often marginalised in the economy and self-employment often becomes a viable opportunity. It is, however, difficult to give any specific suggestion here because the status of economic minorities is highly heterogeneous within an economy. Some ethnic minorities enjoy a high social and economic status, whereas other minorities have a low social and economic status. Some ethnic minorities, because they come from an entrepreneurial culture, are overrepresented among small business owners, whereas other ethnic minorities are heavily underrepresented in the same category.

Furthermore, there exist important generation differences within the same ethnic group. The younger generation has become more integrated and less interested in sharing the traditions and culture of the parent generation. All this affects the distinctiveness of the type of entrepreneurship compared to other more dominant forms of entrepreneurship. Ethnic minorities differ along a number of dimensions such political, social, cultural and economic status. All these dimensions will influence the entrepreneurial opportunities the women coming from these minorities can identify and exploit. Therefore, successful policy initiatives have to take into consideration the specific needs of the ethnic minorities they try to support.

Listen to the voice of women entrepreneurs

The creation of government offices of women’s business ownership is one way to facilitate this. Such offices could have programme responsibilities such as providing women’s business centres, organising information seminars and meetings and/or providing web-based information to those women that are already active as entrepreneurs. Women, who are already entrepreneurs, have important insights into the changes needed to improve women’s entrepreneurship. Their voices need to be heard both because of their knowledge, but also because such policy actions also indicate that they represent a valuable and legitimate group of entrepreneurs.

Different economies have different possibilities to solve such problems based on their economic, cultural and political status. For example, the United States has solved this challenge by creating a government office of women’s business ownership, with programme delivery responsibilities such as women’s business centres, informational seminars and meetings and/or web-based information for women who want to start/grow a business. This also means encouraging the formation of a publicly funded, private-sector membership advisory group on matters related to women’s entrepreneurship, to give women entrepreneurs and their organisations an official voice in policy and programme development decisions affecting women’s entrepreneurship. Canada has also chosen this solution. Other countries like most European Union countries have refrained from such solutions and have emphasised different private and public initiatives. Many of these initiatives are examined in detail in the section on best practices.

Incorporate a women’s entrepreneurial dimension in considering all entrepreneurship related policies

Creating entrepreneurship capital for women. The concept of Entrepreneurship Capital extends that of Social Capital, with a particular focus on creating a society where entrepreneurship thrives. Entrepreneurship Capital spans a broad spectrum of social, political, legal, cultural and business values and is shaped by a diverse set of policy instruments, including education, training and taxes. We have seen that the lack of a strong social position for women in combination with a weak general interest in entrepreneurship have a very negative effect on women’s entrepreneurship. This was perhaps best exemplified by the Gem study where the correlation between entrepreneurship in general and women’s entrepreneurship is extremely high. That is, any country that is serious about supporting women’s entrepreneurship must also be serious about supporting entrepreneurship. If entrepreneurship is important and opportunities are abundant then all members of society will profit. This leads to an increase in the absolute number of entrepreneurs (the relative share between men and women entrepreneurs may remain the same in a short term perspective). Hence encouraging entrepreneurship is crucial to women’s entrepreneurship.

It is therefore important to consider how the creation of new SME-related policies will affect women’s entrepreneurship. For example, with the increased importance of knowledge intensive entrepreneurship with its roots in natural sciences and engineering, more and more policies are developed to support entrepreneurship in that area. However, we also know that women are under-represented among those educational groups. This means that the promotion of knowledge based entrepreneurship without incorporating a women’s dimension will lead to even stronger sex segregation. Policy makers therefore need to consider how women entrepreneurs can also be attracted to exploit knowledge intensive opportunities from natural sciences and engineering.

The role of education and training for women. Some governments are trying to promote entrepreneurial behaviour throughout the educational system or through different programmes directed at cultivating entrepreneurial capabilities. The creation of university chairs and the operation of virtual firms feature among recent efforts to inculcate entrepreneurial behaviour in graduates. The impact of such measures is difficult to estimate, but our research review suggests that women’s lack of both specific and general human capital relative to entrepreneurial activities is one of the major barriers to their increased engagement in entrepreneurship.
By general human capital we mean access to basic education (in developing economies) as well as the sex discrimination in science and technology (in developed economies). In both cases, women tend to lack the skills and experience that lead them to a higher probability of identifying entrepreneurial opportunities whit a high potential of survival and growth. In developing economies we now know that the natural science and engineering sector has become increasingly important for economic growth. Unfortunately, women are largely excluded from this sector.

Entrepreneurship is about the identification and the exploitation of the opportunity. People will only engage in entrepreneurship if they believe they have the skills to exploit the opportunity. We have shown that an important reason why so few women engage in entrepreneurship is because they believe that they lack the necessary skills. They lack the specific human capital based on experience from starting and managing small firms. Hence they need to gain more experience and knowledge to develop confidence in their entrepreneurial skills. Developing programmes to develop women’s mastery and vicarious experience of entrepreneurship is probably one of the most effective ways to achieve change at least from the supply side.

Facilitating entry, growth and exit of women-owned businesses. One of our basic arguments is that effective policy work for women’s entrepreneurship both involves work with the demand and the supply side of entrepreneurship. The more general framework conditions relate to political, legal and tax structures and the policy instruments from the demand side of entrepreneurship. Countries where political stability with democracy, free markets and a strong legal institution have been present for a long time also tend to have the highest levels of entrepreneurship. Furthermore, lower taxes combined with a high general income level seem to have a positive effect on women’s entrepreneurship.

We have seen that in order to enable women to engage in entrepreneurial activities, specific initiatives are needed to educate society about the value of women’s entrepreneurship. This means informing women about the potential benefits of entrepreneurship, but equally important to inform the market of the value and importance of women’s entrepreneurship. If the market does not recognise the potential economic value of women entrepreneurs, these women will still have a difficult time to attract needed resources and have an impact on the market. Basically it is not enough for policy makers to improve the supply side of entrepreneurship; they also have to invest heavily in the demand side of entrepreneurship as well. Also, it should be noted that most entrepreneurship policies are promoted as being “gender neutral” (i.e. equally accessible to and supportive of both women and men), yet in reality they sustain the prevailing relations between women and men and their unequal access to decision-making, resources and opportunities. Consequently, they are effectively “gender blind” and serve to strengthen – albeit largely inadvertently – the prevailing gender-based inequalities.

More specifically for women’s entrepreneurship, it is perhaps more important to change attitudes to women and entrepreneurship. Many still picture women entrepreneurs as doing only retail and simple manufacturing with very little growth potential, or just focusing on education and health care. Many of these industries as a result of having a large number of women entrepreneurs are also perceived as potentially less valuable by investors. This is only one part of the picture. We can also observe women entrepreneurs that have created highly successful firms and we have shown that even if most do not grow substantially (like most men), as a group they create substantial growth in employment and sales. We can also see that the industries women tend to enter by tradition such as health care and education also are industries that have recently become industries with a great number of high growth firms (Davidsson & Delmar, 2003). Therefore, selection forces have to be changed so that entrepreneurial opportunities generated by women have a higher probability to enter different markets and succeed. This means that different actors on the market need to learn about and also recognise the idiosyncratic experience that women can bring to the entrepreneurial process. Policy makers can make an important contribution here by recognising the economic value of industries having many women entrepreneurs. However it has to be pointed out that these changes probably will be as slow as the very slow changes we can observe in society in general when it comes to equal opportunities between the sexes. De facto closures are very difficult to change. An important step is to create better knowledge and awareness about women in general and women’s entrepreneurship in particular.

Promote the development of women entrepreneur networks

We have observed that networks are major sources of knowledge about women’s entrepreneurship and are increasingly recognised as a valuable tool for its development and promotion. Policy makers must foster the networking of associations and encourage co-operation and partnerships among national and international networks and facilitate entrepreneurial endeavours by women in the economy. In the section that follows we examine critically why best practices in different countries succeed. One major reason, ceteris paribus, is that they provide a platform for women to meet entrepreneurs (both women and men) and to learn and gain knowledge about becoming and being an entrepreneur. By network we refer here to exchange of valuable information in order to become a more competent entrepreneur. That is a person with a higher probability to identify and exploit a valuable entrepreneurial opportunity.

The ability to recognise that women represent a highly heterogeneous group and the ability to target some or many of the subgroups with a tailored programmes is a highly successful strategy. Being able to offer a tailored programme to the right group where women feel that they have actually learned something and that their needs are taken seriously is crucial. Also there is a need for these initiatives to be renewed over time, in order to attract both new and older users. Hence, the perceived and the actual quality of the initiative are central.

Yet another identified success factor is the ability to create legitimacy for the effort outside the few already converted. Successful programmes have been able to create respect and legitimacy for their effort outside the normal sphere of end-user and policy makers. They have been able to market their initiative to be important and worthwhile for the whole of their society or region, making their impact stronger. At the same time they also achieve a high visibility, which makes it easier for them to secure further financing.

To sum up, we can conclude that most programmes focus on the supply side of entrepreneurship, specifically speaking, empowering and educating women entrepreneurs and would be entrepreneurs. Information dissemination and lobbying is present among many of these initiatives, but seem to be of second order. Lack of resources or lack of knowledge might be reasons for this. Success comes from the ability to recognise women as a heterogeneous group and to offer tailored information. Access to long-term resources is crucial as well as the ability to gain legitimacy in society at large. Then and only then, when these initiatives have legitimacy, access to long term resources, access to information and the ability to tailor the information to the specific needs of women, do these initiatives become efficient and represent an important asset to promote women’s entrepreneurship.

Periodically evaluate the impact of any SME-related policies on the success of women-owned businesses and the extent to which such businesses participate.

The objective should be to identify ways to improve the effectiveness of those SME-related policies that should be retained. Good practices that are identified in this way should be disseminated and shared internationally.

This recommendation is related to the recommendation on incorporating a women’s entrepreneurial dimension in considering all SME-related policies. It differs as it focuses on the impact of existing policies and on the long term evaluation of new policies. Not only do we need to develop a women’s entrepreneurial dimension when designing new policies, but we also need to assess the impact of current policies. It is likely that a number of policies have a differential impact on women’s versus men’s entrepreneurship. Those effects have to be considered and when necessary, changed.

The evaluation of programmes and policies are central in order to learn what works and what does not work. However, it is often difficult to evaluate the impact of policies if the goals are not clear and achievable. It is important for policy makers to state what is to be achieved when seeking to know which policies are effective and efficient. Moreover, resources have to be set aside to enable the long term follow up of firms participating or being affected by different policy initiatives (Storey, 2003). Obviously, good practices need to be disseminated and shared internationally. Therefore, international fora need to be created where policy makers can on a regular basis meet and share information on good practices related to women’s entrepreneurship.

Improve the factual and analytical underpinnings of our understanding of the role of women entrepreneurs in the economy

The first step is to create better information about women on the labour market and women’s entrepreneurship in particular. Despite the recent developments reported here, we still have a lack of information about the economic impact of women entrepreneurs. At the moment, we know that independent of the nature of the economy observed women represent a substantial part of the entrepreneurial part of the economy. However, they still are underrepresented relative to men and can therefore be said to represent an untapped resource.

In order to better utilise this resource, we need to know why women are underrepresented. We have identified possible problems that need to be addressed using an Austrian-economic perspective to analyse existing research on the topic. However, these problems vary both in scope and scale depending on the economy observed and the only way to more effectively address the issue of women’s entrepreneurship and the associated problems is to learn about the country’s specific characteristics relative to this subject.
This means establishing statistics for international comparison and designing procedures to gather relevant information. We have argued that in order to successfully address the problems related to women’s entrepreneurship, one has to consider the different problems related to entry, survival, growth and termination of firms. Therefore, not only must the economic impact of this group be assessed, but also the development of these firms relative to other similar firms.

Conclusion

In this study we have assessed the importance of women’s entrepreneurship. From an economic perspective we have analyzed the characteristics of women’s entrepreneurship and offered a set of policy recommendations. As we still do not know enough of the entrepreneurial process and women we have argued that better knowledge about the economic importance of women’s entrepreneurship and their particular strengths, weaknesses and opportunities, is central. As low rates of women’s entrepreneurship are both related to the status of women and the status of entrepreneurship, we have suggested that increasing the abilities of women to participate in the labour force and generally to improve the position of women in society and generally increase the possibility to engage in entrepreneurship is central. However, more targeted initiatives are also needed to support women entrepreneurs and would be entrepreneurs.

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