Women entrepreneurs are – at last – entering the local SME market. What more can be done to encourage this trend?

Thanks to significant progress in education and other areas, the prospects for female professionals in this region have never been better.

Yet running a business remains one of the hardest challenges to crack. Female entrepreneurs often face social and economic hurdles that their male peers may not even recognize.
A conference on the issue was held in January 2013 in Dubai, reflecting the importance now placed on improving this situation.

Before we look at some of the measures being proposed – that you too can get involved in – it’s worth stepping back to look at the wider context. Doing so reveals the incredible talent pool our region now has on its hands. In some Arab states, there are now more girls than boys in lower secondary schools, and more women than men graduating from university. These women are also venturing into fields traditionally dominated by men, such as the sciences, business, law and engineering.

This trend is starting to be reflected in the wider economy. Over the past two decades, the proportion of women in the MENA workforce has risen from 22% to 30%. As more and more women graduate, this ratio is likely to increase ever more sharply.

Yet closer examination of this trend reveals issues that affect the SME sector, and make it still a largely untapped field for females. Firstly, it’s apparent that many of the women entering work are choosing the public sector over private. In the UAE, some 80% do. This is echoed in a recent survey by Booz & Company, which found that for every three male students at GCC universities who plan to start their own business, only two women do. And while the number of established female business owners is growing, the proportion remains extremely low: from just 0.1% in 2006 through moderate rises to the current rate of 1.4% (Global Entrepreneurship Monitor).

So what can be done? Some of the barriers are legal or cultural, and deserve more detailed debate than can be entered into here. However there are three factors that can be more readily tackled, and that existing SMEs can even get involved in now – helping to lead and affect change themselves.
Fundamental to these is education in and exposure to the world of entrepreneurship for young women. Although access to education has greatly improved for women in our region, they are not necessarily learning how to launch a successful business. How to recognise an opportunity, harness resources, exercise creativity, generate sustainable solutions – exposure to topics such as these would undoubtedly change many female students’ appetite for entrepreneurship. It’s something now offered in many academic institutions around the world – for example some 30% of US institutions do so. If UAE institutions took up this challenge, the impact could be immense.

Moreover, businesses in this region could take up the mantle themselves. By partnering a university in setting up and nurturing such programmes, they would benefit even more directly. Or they could offer their own internships and training. For example, the Al Ahli Holding Group, a diversified conglomerate based in Dubai, offers its Global Business Opportunities programme, dedicated to empowering young Emiratis to become entrepreneurs. Not only does this provide all the necessary training, connections and resources to build a business (thereby mitigating the perceived risk of starting an enterprise alone), it also stipulates that 50% of participants be female.

Offering themselves as strong role models is another way SMEs can get involved now. If a company features women who have succeeded at its highest levels, then it should enable these women to act as role models – for example affording them the time to speak at conferences.

A final issue is that of funding. Women often face hurdles to obtaining finance that men don’t. Informally, they may not be part of the same social and business networks. Formally, they may lack the collateral an institution requires (for example if property is held in the names of male family members). For such reasons, many female entrepreneurs are turning to incubators and accelerators. But these often prefer technology-led businesses with high multiple returns and clear exit strategies, whereas many women are creating lifestyle service sector businesses that are less predictable. What women-led startups need is “smart capital” from angel investors and networks, willing to invest both capital and knowledge. SMEs that have themselves achieved success, and that are now willing to invest in others in this manner, would not only be helping the women of the UAE, they would be helping to shape a future we will all benefit from.

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