Leveling The Playing Field For Female Entrepreneurs Encouraging female entrepreneurs to kick start their journey has benefits that go beyond just boosting the global gross domestic product.
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According to the Global Gender Gap Report 2021, it will now take 135.6 years to close the gender gap worldwide if the current trajectory in the growth of female entrepreneurs continues. The prediction has driven decision-makers and other stakeholders to propel the business ecosystem towards bridging the gender gap, and bringing more women into the workforce as well as boardrooms.
Several studies have found that companies with women in leadership positions have a higher employee retention rate, are more adaptable to the dynamic startup world, and have higher emotional intelligence. So, it is a mystery that while reports find that women-led Fortune 500s outperform those led by men, very few venture capital firms and angel investors actively pursue and invest in women-founded companies. Though venture capital funding reached all-time highs in 2021, companies founded by women received just 2% of those funds– the lowest since 2016.
On International Women's Day, it seems prudent to investigate the cause of the gender gap in the startup landscape globally, and what can be done to close it. According to this year's Global Gender Gap Index results, 58% of the gender gap in Economic Participation and Opportunity has been closed so far. It estimates that it will take another 267.6 years to close. The UAE is one of five of the most improved countries in this regard. The report outlined two opposing trends that have contributed to this- the proportion of women among skilled professionals continues to increase, as does progress towards wage equality, combined with a lack of women in leadership positions, with women representing just 27% of all manager positions.
Encouraging female entrepreneurs to kick start their journey has benefits that go beyond just boosting the global gross domestic product. If we are to take what several studies have revealed over the past few years, one thing is clear- gender diversity changes the way an organization thinks. A study by the International Labor Organization found that most of the companies that tracked gender diversity saw profit increases of 5-20%. They found it easier to attract talent, improvements in creativity, innovation, and openness, and better customer experience.
Related: Why The COVID-19 Crisis Could Give The MENA's Female Entrepreneurs An Edge
A Look At The MENA Region's Startup Ecosystem (With A Gender Lens)
The initiatives implemented by MENA governments for diversifying their economies from oil revenues have given rise to an array of startups across the region. The UAE has positioned itself as a leader in closing the gender gap in the region. As it continues its efforts towards equality, diversity, and inclusion, it is important to note that entrepreneurs form the backbone of the UAE economy. The government has done well to woo global talent with various visa reforms like the golden visa, freelance visa, stimulus packages, as well as retirement schemes. It is a symphony that rings in the right notes.
With Vision 2021, the country successfully achieved this with 95% of businesses being small to medium enterprises. A refreshing fact is that at least 50% of these are women-owned. They employ about 20% of the workforce and contribute to about 20% of the GDP. Over the years, the UAE government has consistently introduced a myriad of initiatives to address gender inequality, and empower female entrepreneurs. Some of these include the rise of support groups and finance initiatives specifically catered to female entrepreneurs, as well as business setup packages exclusively for women. My enterprise, Female Fusion, contributes to this by integrating an active community to support the increasing number of female-founded businesses through mentoring, networking, education, incubating, and achieving funding.
Looking at the bigger picture, the GDP of MENA countries is estimated to rise by 30-40% if women are further integrated into the economy. This is an abundance of evidence that supporting and encouraging women is key to creating a resilient economy, which is a global top priority for most of the countries post the COVID-19 pandemic.
The Challenges (And The Solutions)
Having been an entrepreneur not just in the UAE, but also in the United Kingdom and Europe, I have noticed that most women face similar obstacles wherever they may be.
- Many women lack confidence in themselves and their business, often offering discounts or freebies without even being asked. Support from other female entrepreneurs and mentors helps them understand the value that they possess.
- Women's business networks tend to be much smaller than men's. Networks like Female Fusion, which offers a comprehensive membership known as the Fusion Circle, help female founders get the growth they need, find customers, partners, suppliers, build connections, and much more.
- The lack of like-minded and experienced mentors and advisors is another major setback for women entrepreneurs. Without a trusted mentor to show them the right way or answer their questions, this can cause a serious restraint in their professional growth.
- Those with a family struggle to find the right balance between family and work. A community like Female Fusion reminds entrepreneurs to keep a level head, navigate through daily family and work life, as well as share their personal experiences. After all, women should support women.
As the UAE paves the road to making equal opportunities for entrepreneurship more rampant, women will start accumulating wealth, and the gender wealth gap could also begin to reduce further and faster. Gender diversity, especially in the startup ecosystem, can propel the progress of women-owned enterprises, which will eventually bring about fresh ideas, services, and products into the market.
Related: MENA's Women In Business On What Empowerment Means To Them