1 The World of Women Entrepreneurs

Mauro F. Guillén

“This has been an amazing experience,” observed Victoria Kisyombe, a brave entrepreneur who founded a leasing company in Tanzania to help other entrepreneurs gain access to the coolers and freezers, baking ovens, sewing machines, gravel-making machines, or tractors and trucks they needed to pursue their dreams. “It is a business that allows me to give to others, but has simultaneously contributed so much to my own personal development.” Victoria’s experience is both unique and commonplace throughout the developing world. Myriad women entrepreneurs have launched a business, some in response to a perceived opportunity, many out of necessity given a lack of viable employment alternatives. This book places the inspirational stories of women like Victoria in the wider context of how it feels and what it means to be an entrepreneur in developing countries and emerging economies, in which starting any kind of business can be a daunting challenge, especially for women.

Women entrepreneurs in the developing world are so important because they can truly make a difference. In spite of decades of massive efforts to promote economic devel op ment and eradicate poverty, human societies differ vastly in terms of the quantity and quality of economic and social wellbeing that individuals can hope to enjoy during their lifetimes. These fundamental differences manifest themselves at all levels, namely across continents, countries, rural and urban areas, social classes, and communities. Governments and nonprofits have attempted to create markets, launched devel op ment programs, built physical infrastructure, and created new institutions; and yet, poverty and lack of opportunity continue to be rampant realities in much of the developing world.

This book offers a fresh look at development efforts through the lens of women entrepreneurs. Economic development is much more than mere economic growth; it entails a social as well as an economic transformation, some measure of innovation, and attention to sustainability and environmental issues. The role of entrepreneurship by women in the process of economic development is complex, and it requires paying attention to education, culture, gender dynamics, and family structures and traditions, to name but a few important factors.

When one thinks about women entrepreneurs in developing countries and emerging economies, a number of tantalizing questions come to mind: Can entrepreneurship by women make a difference in economic development? Or does entrepreneurship by women contribute to perpetuating traditional economic practices and activities? Do women who are already economically and socially advantaged benefit the most from entrepreneurship? Do men and women face fundamentally different opportunities, obstacles, and challenges when it comes to entrepreneurship? Do women use resources and manage their ventures differently from men?

Previous case-study research on women entrepreneurs has provided some answers to these questions (e.g. Snyder 2000; Browne 2001; Bruni 2005; Harley 2007; World Bank 2009). In this book we also approach the study of women entrepreneurs through the case method. Case studies are used in research for the purposes of empirical description and classification, theory building and testing, clinical diagnosis, professional preparation, and program evaluation (Hamel 1993; Yin 2003; Flyvbjerg, 2006). They have become increasingly popular in the field of management and entrepreneurship research (Eisenhardt 1989). While in this book we do not develop or test theory based on case studies of women entrepreneurs, in the concluding chapter we seek to organize the evidence and to point out some intriguing commonalities across the cases.

Each case presents a set of unique yearnings, circumstances, accomplishments, and limitations. The intent is not to produce generalizations about what needs to be done in order to alleviate poverty and encourage development, but to document the diverse experiences of women entrepreneurs in the hope that scholars, policymakers, and aspiring women entrepreneurs may find inspiration in them. Before embarking on that journey around the developing world, however, we must reflect on the successes and failures of economic development efforts over the last decades, since they have set the stage for the activities of women entrepreneurs.

Peddling Development

The vast shifts in global economic and geopolitical affairs brought about by the Great Depression and World War II created a context conducive to experimentation with new ways of promoting economic growth and development, both in the technologically advanced countries and in the developing world, which underwent a rapid process of political emancipation and change as the colonial era came to an abrupt end. Governments and policymakers experimented with different theories, models and recipes to induce economic transformations with the goal of accelerating growth. While some of their efforts were met by astounding successes, most failed to create the kind of self-sustaining economic dynamism that could raise a majority of the population out of poverty.

Entrepreneurship—the complex array of activities involved in imagining, launching, and managing a venture, whether for profit or not—did not receive enough attention from economic theorists, advisors, and government officials, who preferred to think about development in terms of macroeconomic policymaking, cultural obstacles, and the lack of physical infrastructure. Governments thought that the best way to accelerate economic growth so as to improve the living standards of the population was to lay the foundations for a large-scale transformation that should include the abandonment of traditional values in favor of modern ones, the development of cities, and investments in new types of industrial activities, typically capital-intensive ones.

By the 1970s, however, it had become readily apparent that in most parts of the developing world standards of living were not improving as fast as would have been desirable. Given the lack of success at eradicating poverty, and the recurrent crises that afflicted many developing economies, economists and policymakers searched for new ways to address the fundamental challenges of economic growth and development. Starting in the 1980s, in the wake of some of the worst economic and financial crises in the developing world, a new approach focusing on the institutional underpinnings of economic dynamism emerged. The key proposal was to ensure that developing countries would have the economic, financial and social institutions in place necessary for small businesses to grow, create jobs, and hence contribute to development. Policymakers had finally realized that small businesses accounted for the bulk of employment in developing countries, even more so than in developed ones.

Enter Gender

Development scholars and policymakers did not pay systematic attention to women as economic actors, entrepreneurs and business owners until quite recently. The United Nations Decade for Women (1975–1985) laid the foundations for a new wave of programs focused on promoting women’s role in the economy as a way to accelerate economic development. Thus, this approach was not only to advance gender equality as a goal in its own right, but also to explore ways in which women’s economic activities could contribute to economic growth and to economic development, in the sense of a transformation of the economy through innovation.

By the beginning of the 1990s entrepreneurship by women had become a cornerstone of economic development. Policymakers had realized that without vibrant women entrepreneurs countries would be wasting or under-utilizing half of the talent pool. As Helen Clark, the administrator of the United Nations Development Programme, has recently put it,

These thoughts are echoed by Sibongile Sambo, founder of an airline company:

Entrepreneurship, however, has always been a difficult career path for women. A recent World Bank report covering 128 developed and developing economies found a considerable degree of legal discrimination against women in areas that thwart entrepreneurship. For instance, as of 2009, in forty-five countries women did not have the same legal capacity to act or engage in economic transactions as men, in forty-nine countries women were prevented from working in certain industries, and in thirty-two countries they did not have equal inheritance rights. Equal legal rights were found to result in a greater percentage of businesses owned or managed by women.³

Studies have documented that entrepreneurs, whether men or women, tend to initiate activities related to their previous job experience. Given that women tend to be active in a few specific occupations, sectors or industries, the effect of previous experience on entrepreneurial activity generated a segregated pattern of entrepreneurship by gender, with women overwhelmingly launching new ventures in the service sector in general, and in retail and personal services in particular, where capital requirements tend to be lower and their household and self-employment experience more relevant. They are also more likely to launch a venture in traditional industries as opposed to technologically advanced ones.

For women, entrepreneurship can be liberating and conducive to economic well-being, but it can also become a frustrating experience due to the many barriers they face along the way, many of which are unique to female as opposed to male entrepreneurs. As Azza Fahmy, founder of a famous jewelry firm with 165 employees, observed, “my new experience was out of the ordinary for any conventional, young Egyptian woman in a traditional environment, but I was determined to go on.” Or consider the example of Wu Huanshu, whose company manufactures clothing accessories and is widely considered to be the first female entrepreneur in China to have incorporated her own firm.

When it comes to entrepreneurship, perhaps the two most important gender-related differences are that women tend to go into fields of activity related to their most frequent previous experiences (e.g. personal services, retail, the creative crafts, and traditional industries), and that ventures founded, owned and/or managed by women tend to grow less over time, mostly as a result of structural constraints of various sorts. One of them is lack of knowledge of, and experience in, business. As Aissa Dionne, a Senegalese interior designer, remarked, “at the beginning I didn’t even know how to do an invoice. I was asking friends for advice.”⁵

Discrimination against women when it comes to funding represents in many countries a hindrance to economic growth. “I started working in Santiago, in a textile company,” says Isabel Roa, a Chilean entrepreneur. “I then began to knit myself and to sell from door to door. The biggest problem I had was that when I started I did not have capital. I solved this by saving and getting loans.”⁶

Perhaps one important reason why women experience many obstacles along the road to launching and growing their venture is that they are more likely than men to become entrepreneurs out of necessity. “I realized the limited choice available and also the fact that since the time when I myself went to school, the number of schools and seats had not increased,” explains Nasreen Kasuri, who founded a school in Pakistan.

In fact, the Global Entrepreneurship Monitor, an annual survey of entrepreneurial activity around the world, documents that in most countries women tend to become entrepreneurs for lack of other alternatives.

Entrepreneurship by women is surrounded by many controversies. One of them refers to networking. Women entrepreneurs often complain that they do not have access to the necessary resources for launching and growing their venture because their network connections are insufficient. Those resources include not only material ones but also advice, mentorship, and role models. Most studies show that women entrepreneurs in developed countries have fewer network ties in general. Both men and women entrepreneurs tend to have same-gendered ties, which makes it more difficult for women to find mentors and role models in fields in which there are few of them. These differences are largely attributable to prior employment history and job experience. In fact, regardless of gender, salaried men and women tend to have more network contacts than the self-employed. Another problematic aspect of networking has to do with the feeling of being in the minority. “I have grown beyond that sensitivity of reacting to the term ‘woman entrepreneur,’” explains Indian biotech entrepreneur Kiram Mazumdar-Shaw. “I now think it will be a matter of pride to be called so as there are now a number of flourishing female entrepreneurs in our country, and let’s face it, women in business get noticed much more than men!”⁸

Another hotly debated issue concerns work/family balance. Women’s role in the family is frequently seen as both constraining and enabling entrepreneurship. On the one hand, research has shown that the family obligations shouldered by women can detract energy and time from other activities and make it harder for them to build the experience, reputation, and networks necessary for success. On the other, research also indicates that entrepreneurship can help women make more flexible arrangements to balance work and family than the typical 9-to-5 job, and that family life can be an inspiration for certain entrepreneurial activities. Still, many women are constrained by issues of work/family balance, sometimes in unexpected ways. Martha Debayle, a Nicaraguan-born Mexican media entrepreneur, comments: “I remember my Mom saying, ‘but whose mind could possibly conceive this business that does not turn out a cent and look how exhausted you are, how irresponsible! You’re everything your two daughters have in this world.’”

A no less important debate has emerged over whether women entrepreneurs have distinct preferences for imagining, organizing and managing a venture, and may define success in terms of goal achievement, a better work/family balance or community benefits as opposed to growth, profits and fame. In this vein, Rwandan handicrafts entrepreneur Janet Kkubana observed:

Or Annette Zamora, the Rapanui social entrepreneur focused on preserving and popularizing the ancient culture of her magical island, reflected:

The chapters that follow present cases of women who imagined, launched, and managed an entrepreneurial venture somewhere in the developing world, to varying degrees of success, confronting various types of barriers, and finding different kinds of fulfillment. These inspiring stories offer insights into the ingenuity and persistence of entrepreneurs, their needs and desires, and the striking ways in which they assess their own experiences.

We begin our journey around the world by examining how women use the local resources at their disposal to launch a venture: a Mexican educational toy company, a Tanzanian leasing company, an Indian genomics out-sourcing firm, a Turkish apparel maker, and a Brazilian coffee grower. Next we assess the various strategies for business growth available to women in developing countries in the cases of a South African airline, a Brazilian restaurant, an Argentine travel agency, a Mexican magazine publishing company, and a Chinese consumer electronics firm. We con tinue with how women entrepreneurs deal with the challenges of organizing and leading effectively, illustrated by the travails of an Egyptian jeweler, a Mexican pottery maker, a Kuwaiti investment banker, and a Mexican caterer. Entrepreneurship by women frequently has a social bent, as the cases of a cultural entrepreneur from the Pacific island of Rapa Nui, knitwear in China, Peruvian fashion, and environmental awareness in Thailand illustrate. Finally, we will hear from women who operate across national boundaries, including a Japanese-Brazilian entrepreneur who founded a hotel chain, an Algerian woman who opened a beauty salon in Paris, and a Korean-Chinese woman who designs and makes traditional Korean clothing.

We chose these cases from a variety of countries and industries to illustrate the range of experiences of women entrepreneurs in developing and emerging economies (Gerring 2007). After identifying the woman entrepreneur and securing her collaboration, which occurred in every instance, we used field interviews and secondary sources to document the background and career of the entrepreneur, the national and local context in which the venture was founded, the characteristics of the business activity and the industry, and other relevant information. The chapters that follow describe the opportunities and the challenges faced by these women, and exemplify their contributions to the well-being of their communities and to economic development.