ANC Treasurer-General Comrade Zweli Mkhize
My Colleagues in the Cabinet
Women in Business Leaders Present
Members of the media
Comrades and friends
Comrades thank you very much for organising such an important summit on Women in Business. It gives me great pleasure to deliver this keynote address as requested by organisers.
Comrades and friends I‘ve decided to share with you today various research reports that talk to the status of women participation in entrepreneurship activity both at home and globally. Programme Director I am afraid that the picture emerging shows that we have our work cut out for us in this area.
According to a new research report released by the Global Entrepreneurship Monitor (GEM) more than 126 million women entrepreneurs were starting or running new businesses in 67 economies including South Africa in 2012—but this number is still not enough to meet the need for increased entrepreneurial activity in order to assist global economic stability.
According to Mike Herrington, executive director of GEM and lecturer in entrepreneurship at the UCT Graduate School of Business, while entrepreneurship is increasingly recognised as a broad-based driver of economic growth and societal well-being – not enough is being done to support women entrepreneurs, who are one of the most underutilised resources in the entrepreneurship ecosystem.
“Unless more is done to actively engage and support women as entrepreneurs, the job creation capacity of almost half the world’s population will be lost,” he said.
Published in July 2013, the inaugural GEM 2012 Women’s Report is the most comprehensive research ever into the entrepreneurial activity of women across the globe.
Conducted in 67 economies – including South Africa –the report examines the rates and nature of female participation in entrepreneurship around the world and contrasts these findings with male rates.
This unique research analyses how many women are participating in entrepreneurship, the types of businesses they are starting or operating, their motives and aspirations for this endeavour, and their attitudes about entrepreneurship.
The South African research was carried in conjunction with the GEM South Africa team based at the UCT Graduate School of Business.
The Report shows that while women’s participation in entrepreneurship differs around the world, as does their impact on job creation and innovation – in nearly every economy there are fewer female than male entrepreneurs, and they appear to show reluctance to scale their businesses or to enter new and less tested markets.
The research highlighted that women entrepreneurs need more resources and better programmes in order to build new collaborations and leverage ideas; develop entrepreneurial abilities and attitudes; and access the means necessary to expand their businesses and generate jobs.
According to the Report, an estimated 48 million female entrepreneurs and 64 million female established business owners currently employ one or more people in their businesses.
Furthermore, seven million female entrepreneurs and five million established business owners are expected to grow their ventures by at least six employees in five years.
However, Herrington said that this number is still inadequate in proportion to what it should be. “In most economies around the world, there are fewer women than men starting and running new businesses but there are even fewer running mature ones,” said Herrington.
“This raises a red flag about the ability of women to easily transition from starting, to sustaining their own businesses.”
The Report shows that in Europe and the United States, women are as highly-educated, or more so, than men – yet despite this they are less likely to believe they have the capabilities for starting businesses.
In fact, the research shows that in every economy, women have lower perceptions of their entrepreneurial capabilities than men.
Herrington said that findings in the report such as this can be used by policy-makers to tailor initiatives and programmes in their countries to help aspiring women entrepreneurs overcome the unique challenges they face.
For example, the research will enable them to: assess the state of women’s entrepreneurship by tracking over time key indicators, such as the gender of those who start and run businesses, the mix of industries in which women entrepreneurs participate and the contribution to job creation by women entrepreneurs; design targeted initiatives, such as government procurement programmes that provide women entrepreneurs with equal access to opportunities as suppliers of goods and services; and deliver education and training.
“Both high impact and small-scale entrepreneurs are garnering the increased attention of educators, policymakers and practitioners. The spotlight on entrepreneurs has revealed that much more can be done throughout the world to build local ecosystems in which they can better thrive,” said Herrington.
He said that government and policy-makers must acknowledge that steps need to be taken to transform the underutilised resource that is female entrepreneurial activity, into a fully-fledged contributor to economic development, innovation and enhanced societal value throughout the world.
According to the GEM study of 2010, SA is ranked number 27 out of 59 countries on total entrepreneurial activity and measured at 8.9% being below the average of 11.9% of all participating countries.
Status of Women Entrepreneurship in South Africa
Despite the potential contribution of women to economic development, South African women remain on the periphery of the economy, dominating the informal economy. According to the FNB 2011 White Paper on Female Entrepreneurship, only 38% of established business enterprises are owned by women.
Equally disturbing is that according to the Business Women's Association in its Women in Leadership Census 2012 report: “Only 4% of the CEOs of JSE-listed companies are women and only 6% of the people who chair such companies are women. Of about 400 companies listed on the stock exchange, only 12 were headed by women in 2011.”
Other research indicates that while women make up 43.9-% of the workforce, they constitute only 21.4% of all executive managers and only 17.1 % of all directors in South Africa. Less than 10% of South Africa CEOs and chairpersons (9.7%) are women.
The quarterly labour force survey (QLFS) for the first quarter of 2011 further revealed the disconcerting status of women’s economic and employment opportunity. According to the survey, employment amongst women was found to be declining marginally, whist that of males increased. This situation is totally unacceptable.
This issue is not peculiar to South Africa alone; the 2012 G20 Worldwide Index of Women as Public Sector Leaders demonstrated that while women made up a sizeable percentage of the workforce in most countries, this was not reflected in their representation in leadership.
Women leaders in the Workplace
According to the Human Science Research Council’s 2014 report entitled “Women leaders in the Workplace” a lot indeed has been achieved in the last 20 years. The report author Jane Rarieya says eloquently that the past 20 years of democracy in South Africa have seen significant strides being made to ensure that gender equality has become a societal reality.
Indeed, South Africa has received international recognition for these efforts and is currently ranked 16th in the world by the Global Gender Gap Index, a framework used by the World Economic Forum to capture the magnitude and scope of gender-based disparities among countries in the areas of economic participation and opportunity; educational attainment; health and survival; and political empowerment.
Just to put these strides into perspective let us look at the 2012 – 2013 Commission for Equity Annual Report. It says women participation in top management grew by 6.1 between 2002 and 2012. And, women participation in senior level management grew by 8.5 percent within the same period.
Challenges Facing the Female Entrepreneur in South Africa
According to the Small Enterprise Development Agency (Seda); gender inequality issues are at the forefront of explaining the disparities in SME development at both the global and national level. For example, women in business continue to report gender discrimination when seeking finance from traditional financial institutions, including state owned institutions.
Some of the key barriers to promoting women in business include cultural and societal problems as well as the psychological impact of cultural norms.
In South Africa, various surveys have provided evidence of the fact that Black women’s access to financial services is dominated by informal savings, funeral and burial schemes that offer limited credit to the enterprise. Despite the fact that women represent a critical component for alleviating poverty and the promotion of BEE, there are numerous challenges facing the female entrepreneur. These include;
• Employment legislation and policy
• Technology and business infrastructure
• Absence of vehicle for skills development and capacity building
• Socioeconomic factors; family responsibility, HIV/AIDS, poverty
• Poor access to financial assistance, credit and unavailability of collateral
• Lack of access to markets and procurement
• Lack of access to information
• Shortage of effective supportive institutions
Adding to the challenges outlined above it has been found that women-owned business activity tend to fall predominantly in the informal sector and women face the challenge of achieving business growth that warrants entry into the mainstream economy. This implies that participation of women in value-adding activities is significantly limited. Poor access to the wider market implies that prospects for sustainable growth of micro-enterprises owned by women are severely limited. Furthermore, the lack of management training and a lack of sales and marketing skills are concerns that continue to plague women-owned enterprises.
Comrades, I hope I did not scare with all the reports that paints a black picture of the status of women in business in South Africa and globally. The reality is that women emancipation when it comes to entrepreneurship activity is growing at the snail pace. The then explains why President Jacob Zuma has established both the Ministry for Women and the other for Small Businesses. These developments augur well for the future of our country. Indeed, We Shall Move South Africa Forward.
I thank you