New Research by Tahseen Consulting Finds That Female Rates of Entrepreneurship in the GCC are Substantially Lower Than Male Levels
In several of the GCC countries, men are more than twice as likely as women to set up their own business. According to new research by Tahseen Consulting, women face a number of obstacles which serve to depress female entrepreneurship rates.
Women Entrepreneurs Face Unique Barriers
“Female entrepreneurship rates in the GCC are lower than most other regions including Europe, Central Asia, East Asia, and Latin America,” says Wes Schwalje, Chief Operating Officer of Tahseen Consulting and author of the study. “Official rates of female entrepreneurship are underestimated in some countries due to female operated, informal, home-based businesses which are not captured by official statistics. However, traditional beliefs about the role of women and familial obligations remain a barrier to increased levels of entrepreneurship.”
The study indicates that female entrepreneurs face gender specific barriers that reduce their ability to start business as well as own businesses which persist beyond the startup stage. While businesswomen networks have emerged in a number of GCC countries which provide training and support for female entrepreneurs, many of these networks are still in their infancy and face funding and participation challenges. Females also face unique obstacles to obtain critical resources to grow their businesses such as funding. For example, females often require male guarantors in order to obtain business loans from banks.
Emerging Support Systems for Female Entrepreneurship
Many GCC nations have recently developed entrepreneurship education programs such as the Entrepreneurship Program by UAE Academy, a subsidiary of Abu Dhabi Chambers and Khalif Funds’ Injaz Entrepreneurship Program, to develop young people’s interests and capabilities in entrepreneurship. Increasingly, these programs focus on women either explicitly or implicitly due to program design. For example, several of the GCC countries have programs which support artisans and the cultural industries which generally draw participation from women. GCC countries have also launched programs which allow women to submit proposals for small start-up loans which are combined with training on business skills.
However, entrepreneurship and active labor market programs in the GCC often lack gender-based design features and monitoring and evaluation systems to make programs effective. Across the region, entrepreneurship and active labor market programs rarely track results disaggregated by gender and follow participants over time to understand how female entrepreneurs’ businesses fare compared to those of men.
The Need for Entrepreneurship Policies That Reduce Gender-based Inequities
Based on the scarcity of initiatives which specifically target aspiring female entrepreneurs, the study finds that GCC countries require more female-friendly entrepreneurship policies. While most GCC nations have supported entrepreneurship centers to improve the environment for entrepreneurship, including providing funding, training, and reducing bureaucracy, very few of these centers specifically cater to women’s needs.
Due to the high number of females who exit the labor market in their thirties in the GCC, the study’s findings suggest one potential population segment for entrepreneurship training is college educated women who have exited the labor market after child birth and want to open a business to have flexibility in their working hours. Another area of focus may be female secondary school leavers and high school graduates who could benefit from entrepreneurship training to supplement their incomes. Female students are also a potential training beneficiary group that is often overlooked. Interviews for the study suggest that, in GCC countries, entrepreneurship policies and educational policies are not necessarily aligned and are infrequently viewed as complimentary under national education policies. Career guidance to accommodate entrepreneurship is also required.
In another recent research paper analysing the motivational factors for Women Entrepreneurs in the Middle East and North Africa (MENA), Beschir Hussain and Ammar Rizvi, suggests that the MENA countries need to establish a sustainable entrepreneurial ecosystem to facilitate entrepreneurial activity.
The research found that for women in the MENA region gaining a sense of achievement and overcoming a challenge were the two most prominent motivating factors leading to the founding of a business – and quite interestingly, increasing income play only a minor role.