PRINT THIS PAGE Women entrepreneurs: A growing and promising phenomenon06/12/2006. Source: IVCJ. Michal Revivo-Steiner, School of Management, Ben Gurion University of the Negev 
Women entrepreneurs have become increasingly common in the business world. This IVCJ article examines women's relative advantages as well as some of the obstacles that persist in today’s business environment. The topic of women entrepreneurs is of increasing interest to educators, businesspeople and government officials. Research findings have shown a high positive correlation between the level of national women’s entrepreneurial activity and growth in GDP, suggesting that countries that are successful in promoting entrepreneurship among women could experience a positive impact on economic growth rates.
In Israel, as in many other countries, entrepreneurship by women is expanding steadily. There was been a rise of 52 percent in the Total Entrepreneurial Activity (TEA) index among Israeli women in 2004, compared to 2002, and in contrast to a TEA decline of 22 percent among Israeli men during the same period. Israeli women entrepreneurs tend to be married with grown-up children, educated and achievement motivated, and they generally have high self-esteem.
Women entrepreneurs: the advantages
A refreshing new approach to entrepreneurship by women emphasizes relative advantages of women and how they can be leveraged into entrepreneurship. There is solid scientific evidence that women, on average, take a broader perspective than men do, and think contextually and holistically. They also display more mental flexibility, make more intuitive and imaginative judgments, and have a greater tendency to plan long term. These female traits are important tools for entrepreneurs.
As technology changes and globalization and competition accelerate, the business world is becoming increasingly complex and dynamic. More business leaders and consultants are drawing away from rewarding the linear, component-by-component atomistic and focused approach to business that is adequate to masculine thinking, and are now emphasizing the importance of system thinking that provides a framework for seeing the whole picture and interrelationships. The feminine propensity to look at business problems contextually and to concentrate on the whole of the issue rather than its parts, is more in tune to the preferable system thinking of today. Since businesswomen weigh more variables, consider more alternatives and outcomes, recall more points of view and see more ways to proceed, they can bring valuable innovation and creativity to entrepreneurship.
Women have a penchant for long term planning and the ability to tolerate ambiguity and changes better than men do. As competition increases, today’s entrepreneur must be able to alter plans quickly and frequently. A woman’s innate mental flexibility should be a valuable planning asset for every venture.
A women's talent with words and negotiations is useful in marketing the vision and product of a new venture to prospective investors, suppliers and customers. A preference for networking and cooperation with other women are also helpful in entrepreneurial activity.
Women in Israel, on average, have more formal and academic education than Israeli men have. This can help in reducing the gap caused by a long history of subordination of women in the business and military worlds. Rapidly changing technology should enable even more women to go into business for themselves – at home. Consequently, the work-family conflict can be minimized.
Women's enterprises are more likely to stay in business. US businesses owned by women have a two-year success rate of 80 percent, well over the national average of about 50 percent.
Obstacles facing women entrepreneurs
Despite the empowering approach presented above, one cannot ignore the fact that women in Israel, similar to other countries, are almost half as likely to be entrepreneurs as men. Why? In pursuing entrepreneurship, women are impacted by barriers in a similar way that they are affected by barriers in the labor market. There are internal barriers such as low self-esteem, low need for achievement and a fear of failure. External barriers include lack of role models, insufficient institutional and family support, and absence of sufficient management experience in senior positions. As a result, women have less business skills, fewer connections and reduced access to formal and informal networks.
Women also face barriers associated with access to capital. Gaining access to appropriate levels of finance is a challenge to many business owners. However, evidence indicates that women have additional disadvantages associated with gender. Some of the reasons stem from stereotypes created by the masculine mentality in the banking industry. Women are entering an environment constructed by men, therefore they may be perceived as less legitimate in the eyes of prospective financial backers.
There is also a growing body of evidence showing how the history of gender disadvantage in the salaried sector and military spills over into entrepreneurship. It is argued that continuing subordination in the workplace has constrained the accrual of social, cultural, human, and financial capital and places limitations upon a woman's ability to amass personal savings, invest, generate sufficiently attractive credit histories for lenders, or engage the interest of venture capitalists. Obviously, chronic under-capitalization and financial constraints will impede the full realization of a woman's business potential. Those barriers, particularly the financial limitations, contribute to a propensity to establish firms in poorly performing segments of the service sector, which struggle to survive and/or grow and reinforces the negative image of women in self-employment.
Summary and conclusions
Women entrepreneurship is beneficial for women as well as for the economy. The increasing number of women entrepreneurs can facilitate economic mobility and self-fulfillment for individuals, promote economic and social equity, create employment, encourage trade, improve the use of valuable human capital and bolster national economic prosperity. A new perspective emphasizes the claim that women don’t have to replicate men’s entrepreneurial experience and the masculine mentality of “doing business.” Women and investors can see feminine traits and talents as sources of power with valuable advantages for entrepreneurship. Still, in pursuing entrepreneurship, women face many barriers and are exposed to new subordination phenomena, particularly in financing their ventures.
It seems that free market forces will continue to put women at a disadvantage in the labor market. Therefore, intervention programs aimed at eliminating the obstacles and simultaneously leveraging distinct female advantages in entrepreneurship are necessary.
This article appeared in the Israel Venture Capital & Private Equity Journal (IVCJ). IVC Research Center publishes the Israel Venture Capital & Private Equity Journal, a quarterly review of trends and developments in the Israeli-related venture capital industry. IVCJ, distributed worldwide, is dedicated to provide wide-range coverage of Israel's venture capital industry. For more information please visit www.ivc-online.com
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