Date: 31/01/2003
Source: Deputy Ministry of Trade and Industry
Title: Hendricks: International Women's Forum
SPEECH BY THE DEPUTY MINISTER OF TRADE AND INDUSTRY, REPUBLIC OF SOUTH AFRICA, MRS LINDIWE HENDRICKS, PRESENTED AT THE INTERNATIONAL WOMEN'S FORUM, Sandton Convention Centre, Johannesburg, 31 January 2003
TOPIC: FAST TRACKING WOMEN ENTREPRENEURS IN DEVELOPING COUNTRIES
Dignitaries, honoured guests, ladies and gentleman,
The subject which I am addressing you on today of fast tracking women entrepreneurs in developing countries is a subject which is currently very relevant for South Africa. Since 1994 there have been dramatic changes in the country, particularly in the business environment yet we see that there are still insufficient women becoming successful entrepreneurs. According to the Global Entrepreneurship Monitor 2002 (GEM) women in South Africa are half as likely to start a business than men. This is concerning as there is a low entrepreneurial rate in the country of 6.5 people per 100 which is low for a developing country. This is a situation that needs to change.
Before discussing fast tracking women entrepreneurs one would first need to understand the constraints facing women entrepreneurs in developing countries, and then look at how women entrepreneurs can be fast tracked. Many of these constraints are applicable to South Africa and I believe are relevant to other developing countries.
In my understanding and from studies that have been undertaken of women entrepreneurs in developing countries, there are five key factors that are constraining women entrepreneurs. These include: 1. The regulatory environment. 2. Education opportunities and education systems. 3. Cultural factors, societal views and societal perceptions. 4. Management training and job opportunities. And 5. Family responsibilities.
Firstly the regulatory environment; this includes government legislation which can have a constraining effect on women's enterprises. In many developing countries, South Africa included, legislation existed that limited women's contractual rights and their economic participation. Women are also sometimes excluded from the ownership of property, which amongst other negative factors limits their access to collateral for loan finance. In addition to these constraining factors in the regulatory environment it has been argued that a high or complex administrative burden in starting and running a business has a greater negative impact on women owned businesses and may even push women entrepreneurs into the informal sector.
Secondly, education opportunities and education systems can constrain women enterprises as women often have less access to education opportunities and when these opportunities are directed towards particular non-business related training and careers such as education, nursing and social work. In addition education systems are sometimes guilty of perpetuating stereotypes about the role of girls and women in society and not providing training in business and technology related areas for girls.
Thirdly, there are cultural factors, societal views and societal perceptions that hold women back. In some cultures entrepreneurship and entering the business world by a women is perceived as negative. Cultural attitudes that discourages risk taking especially by women can be a problem as it does not allow women entrepreneurs the room to fail and start new enterprises. Cultural factors can also play a role in limiting women's access to information as well as preventing a woman owned business from getting equal access to the procurement opportunities in a large company. Certain negative cultural aspects in patriarchal societies might make women more vulnerable as victims of crime and violence.
Fourthly, the limited access by women to management training and relevant job opportunities has a negative impact on the woman entrepreneur. Often women in the workplace are concentrated in the least skilled or lowest paid jobs, which limits their access to management technical training and denies them the on-the-job management experience that would enable them to successfully run a small business. Such knowledge is difficult to teach, for example in government supported training programmes, as it is often acquired through experience in the workplace.
Fifthly, there are the family responsibilities that get placed on a woman and often result in additional financial burden, increased responsibility to look after children and responsibility to manage the household. For example, lack of affordable childcare facilities for young children creates an additional burden for the mother who would like to start her own business.
These five inhibiting factors that I have just mentioned result in a number of difficulties for women entrepreneurs, such as getting adequate finance, having inadequate skills to start and manage a business, challenges in breaking into the marketplace for their products or services, risks of crime and violence, lack of access to information, and often poor use and understanding of technology.
Ladies and gentlemen, with this knowledge of the constraints faced by women entrepreneurs, government and civil society are able to react with appropriate interventions so that women entrepreneurs can be assisted and fast tracked to achieve greater economic success.
There are many interventions that can be made, some of which include:
* Improvement in the access to finance for women, this can be done through the provision of state guarantees for women owned enterprises, encouragement (either through negotiation or legislation) of the private banking sector to provide a minimum percentage of loan or venture capital finance to women entrepreneurs, establishment of state or NGO facilities to lend directly or provide venture capital finance to women entrepreneurs.
* Support, or if necessary establish, and subsidise women business networks. The purpose of such networks would be to encourage women entrepreneurs to support to each other, share information, assist new or start up enterprises and can be a vehicle in which women enterprises can lobby government. They can also facilitate joint buying and be each others customers and suppliers.
* Have role models of successful women entrepreneurs that are brought to the fore and acknowledged.
* Make improvements to the enabling environment such as the establishment or subsidisation of child care facilities so that the family responsibility of women entrepreneurs is reduced. Also there needs to be improvements in the administration or bureaucracy of starting a business and accessibility of government support services. Furthermore, the enabling environment can be improved by facilitating or encouraging the provision of private sector business support services, which is very weak in this country.
* Ensure that there are government run and supported programmes that provide women entrepreneurs with business skills training, information, procurement opportunities and business development support services. Training and other support provided needs to be differentiated as women entrepreneurs are a heterogeneous group and training and support needs to reflect that.
* Encourage teenage girls to get the appropriate training and experience that will equip them to become successful entrepreneurs.
* Establish technology transfer programmes that are aimed exclusively at women, taking note of the different capabilities of women enterprises so that the technology transfer is pitched at different levels. Once a business reaches a certain size it is often necessary for them to explore the international environment in order to continue growing; e-commerce and the use of information technology would therefore be very important at this stage and appropriate technology transfer programmes (with international trade training) would be advantageous.
* If necessary, improve the access by women to basic education and assist women with career pathing so that they can obtain the skills necessary to start and manage a successful enterprise.
* Encourage entrepreneurial activities from a school going age.
* Portray a positive view of entrepreneurship so that views in society are shifted and entrepreneurship is considered as a viable alternative to obtaining a job rather than as a second choice or done out of necessity for survival.
* Assist women entrepreneurs to establish international networks to share idea's with women from other countries and to trade internationally.
* Continuously conduct research, collect data and do analysis of the progress of women entrepreneurs.
Ladies and gentlemen, I have mentioned many areas which will assist in fast tracking women entrepreneurs and recognise that there is an important role for the state to play in providing this support, however, there is also a role for corporates to give opportunities and support to these businesses. The media also has an important responsibility to give adequate attention to the issue. Women themselves also need to find ways to tackle the problem, not only do they need to take the bold leap, find the opportunities in the marketplace and become businesswomen and entrepreneurs, but if they are already in business they need to find ways to assist other women entrepreneurs.
In South Africa we have responded to the challenges of assisting women entrepreneurs by implementing several support programmes. Such programmes are often implemented in partnership between government and civil society, which includes companies, civic organisations, and business associations.
These support programmes include the South African Women Entrepreneurs Network (SAWEN), which is creating a network of women entrepreneurs that will in a number of different ways assist women to provide support to each other; the Technology for Women in Business (TWIB) programme, which is assisting women owned businesses to access technology; and there are initiatives that are looking at access to finance for women entrepreneurs. In addition to these programmes we at the South African Department of Trade and Industry have been ensuring that all of our existing support measures cater for women enterprises and that a new dti incentive is developed that will be exclusively for women owned and run enterprises. Also our procurement policy is biased towards women because women owned companies get additional points, which enables them to win government tenders.
In conclusion the issues raised in my presentation today are by no means comprehensive and I believe that it is necessary to continually find new ways to address the constraints faced by women entrepreneurs so that women can be fast tracked and participate fully in the economy. Finally, I would like to end by reminding delegates that the issue of women's active participation in an economy definitely goes beyond a 'women's issue' as it impacts more broadly on the vibrancy and dynamism of an economy - poor economic participation by women who comprise a significant portion of the population affects growth, job creation, exports, etc and will no doubt have an impact on an economy's future growth prospects. Fast tracking and supporting women entrepreneurs is therefore a priority and something that needs to be addressed by all of us.
Thank you for listening to me.
Issued by the Office of the Deputy Minister of Trade and Industry, 31 January 2003
Source: Deputy Ministry of Trade and Industry
Title: Hendricks: International Women's Forum
SPEECH BY THE DEPUTY MINISTER OF TRADE AND INDUSTRY, REPUBLIC OF SOUTH AFRICA, MRS LINDIWE HENDRICKS, PRESENTED AT THE INTERNATIONAL WOMEN'S FORUM, Sandton Convention Centre, Johannesburg, 31 January 2003
TOPIC: FAST TRACKING WOMEN ENTREPRENEURS IN DEVELOPING COUNTRIES
Dignitaries, honoured guests, ladies and gentleman,
The subject which I am addressing you on today of fast tracking women entrepreneurs in developing countries is a subject which is currently very relevant for South Africa. Since 1994 there have been dramatic changes in the country, particularly in the business environment yet we see that there are still insufficient women becoming successful entrepreneurs. According to the Global Entrepreneurship Monitor 2002 (GEM) women in South Africa are half as likely to start a business than men. This is concerning as there is a low entrepreneurial rate in the country of 6.5 people per 100 which is low for a developing country. This is a situation that needs to change.
Before discussing fast tracking women entrepreneurs one would first need to understand the constraints facing women entrepreneurs in developing countries, and then look at how women entrepreneurs can be fast tracked. Many of these constraints are applicable to South Africa and I believe are relevant to other developing countries.
In my understanding and from studies that have been undertaken of women entrepreneurs in developing countries, there are five key factors that are constraining women entrepreneurs. These include: 1. The regulatory environment. 2. Education opportunities and education systems. 3. Cultural factors, societal views and societal perceptions. 4. Management training and job opportunities. And 5. Family responsibilities.
Firstly the regulatory environment; this includes government legislation which can have a constraining effect on women's enterprises. In many developing countries, South Africa included, legislation existed that limited women's contractual rights and their economic participation. Women are also sometimes excluded from the ownership of property, which amongst other negative factors limits their access to collateral for loan finance. In addition to these constraining factors in the regulatory environment it has been argued that a high or complex administrative burden in starting and running a business has a greater negative impact on women owned businesses and may even push women entrepreneurs into the informal sector.
Secondly, education opportunities and education systems can constrain women enterprises as women often have less access to education opportunities and when these opportunities are directed towards particular non-business related training and careers such as education, nursing and social work. In addition education systems are sometimes guilty of perpetuating stereotypes about the role of girls and women in society and not providing training in business and technology related areas for girls.
Thirdly, there are cultural factors, societal views and societal perceptions that hold women back. In some cultures entrepreneurship and entering the business world by a women is perceived as negative. Cultural attitudes that discourages risk taking especially by women can be a problem as it does not allow women entrepreneurs the room to fail and start new enterprises. Cultural factors can also play a role in limiting women's access to information as well as preventing a woman owned business from getting equal access to the procurement opportunities in a large company. Certain negative cultural aspects in patriarchal societies might make women more vulnerable as victims of crime and violence.
Fourthly, the limited access by women to management training and relevant job opportunities has a negative impact on the woman entrepreneur. Often women in the workplace are concentrated in the least skilled or lowest paid jobs, which limits their access to management technical training and denies them the on-the-job management experience that would enable them to successfully run a small business. Such knowledge is difficult to teach, for example in government supported training programmes, as it is often acquired through experience in the workplace.
Fifthly, there are the family responsibilities that get placed on a woman and often result in additional financial burden, increased responsibility to look after children and responsibility to manage the household. For example, lack of affordable childcare facilities for young children creates an additional burden for the mother who would like to start her own business.
These five inhibiting factors that I have just mentioned result in a number of difficulties for women entrepreneurs, such as getting adequate finance, having inadequate skills to start and manage a business, challenges in breaking into the marketplace for their products or services, risks of crime and violence, lack of access to information, and often poor use and understanding of technology.
Ladies and gentlemen, with this knowledge of the constraints faced by women entrepreneurs, government and civil society are able to react with appropriate interventions so that women entrepreneurs can be assisted and fast tracked to achieve greater economic success.
There are many interventions that can be made, some of which include:
* Improvement in the access to finance for women, this can be done through the provision of state guarantees for women owned enterprises, encouragement (either through negotiation or legislation) of the private banking sector to provide a minimum percentage of loan or venture capital finance to women entrepreneurs, establishment of state or NGO facilities to lend directly or provide venture capital finance to women entrepreneurs.
* Support, or if necessary establish, and subsidise women business networks. The purpose of such networks would be to encourage women entrepreneurs to support to each other, share information, assist new or start up enterprises and can be a vehicle in which women enterprises can lobby government. They can also facilitate joint buying and be each others customers and suppliers.
* Have role models of successful women entrepreneurs that are brought to the fore and acknowledged.
* Make improvements to the enabling environment such as the establishment or subsidisation of child care facilities so that the family responsibility of women entrepreneurs is reduced. Also there needs to be improvements in the administration or bureaucracy of starting a business and accessibility of government support services. Furthermore, the enabling environment can be improved by facilitating or encouraging the provision of private sector business support services, which is very weak in this country.
* Ensure that there are government run and supported programmes that provide women entrepreneurs with business skills training, information, procurement opportunities and business development support services. Training and other support provided needs to be differentiated as women entrepreneurs are a heterogeneous group and training and support needs to reflect that.
* Encourage teenage girls to get the appropriate training and experience that will equip them to become successful entrepreneurs.
* Establish technology transfer programmes that are aimed exclusively at women, taking note of the different capabilities of women enterprises so that the technology transfer is pitched at different levels. Once a business reaches a certain size it is often necessary for them to explore the international environment in order to continue growing; e-commerce and the use of information technology would therefore be very important at this stage and appropriate technology transfer programmes (with international trade training) would be advantageous.
* If necessary, improve the access by women to basic education and assist women with career pathing so that they can obtain the skills necessary to start and manage a successful enterprise.
* Encourage entrepreneurial activities from a school going age.
* Portray a positive view of entrepreneurship so that views in society are shifted and entrepreneurship is considered as a viable alternative to obtaining a job rather than as a second choice or done out of necessity for survival.
* Assist women entrepreneurs to establish international networks to share idea's with women from other countries and to trade internationally.
* Continuously conduct research, collect data and do analysis of the progress of women entrepreneurs.
Ladies and gentlemen, I have mentioned many areas which will assist in fast tracking women entrepreneurs and recognise that there is an important role for the state to play in providing this support, however, there is also a role for corporates to give opportunities and support to these businesses. The media also has an important responsibility to give adequate attention to the issue. Women themselves also need to find ways to tackle the problem, not only do they need to take the bold leap, find the opportunities in the marketplace and become businesswomen and entrepreneurs, but if they are already in business they need to find ways to assist other women entrepreneurs.
In South Africa we have responded to the challenges of assisting women entrepreneurs by implementing several support programmes. Such programmes are often implemented in partnership between government and civil society, which includes companies, civic organisations, and business associations.
These support programmes include the South African Women Entrepreneurs Network (SAWEN), which is creating a network of women entrepreneurs that will in a number of different ways assist women to provide support to each other; the Technology for Women in Business (TWIB) programme, which is assisting women owned businesses to access technology; and there are initiatives that are looking at access to finance for women entrepreneurs. In addition to these programmes we at the South African Department of Trade and Industry have been ensuring that all of our existing support measures cater for women enterprises and that a new dti incentive is developed that will be exclusively for women owned and run enterprises. Also our procurement policy is biased towards women because women owned companies get additional points, which enables them to win government tenders.
In conclusion the issues raised in my presentation today are by no means comprehensive and I believe that it is necessary to continually find new ways to address the constraints faced by women entrepreneurs so that women can be fast tracked and participate fully in the economy. Finally, I would like to end by reminding delegates that the issue of women's active participation in an economy definitely goes beyond a 'women's issue' as it impacts more broadly on the vibrancy and dynamism of an economy - poor economic participation by women who comprise a significant portion of the population affects growth, job creation, exports, etc and will no doubt have an impact on an economy's future growth prospects. Fast tracking and supporting women entrepreneurs is therefore a priority and something that needs to be addressed by all of us.
Thank you for listening to me.
Issued by the Office of the Deputy Minister of Trade and Industry, 31 January 2003
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