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Opinion of the European Economic and Social Committee on ‘Female entrepreneurs — specific policies to increase EU growth and employment’ (own-initiative opinion)
(2012/C 299/05)
Rapporteur: Madi SHARMA
On 19 January 2012 the European Economic and Social Committee, acting under Article 29(2) of its Rules of Procedure, decided to draw up an own-initiative opinion on
Female entrepreneurs — specific policies to increase EU growth and employment.
The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 28 June 2012.
At its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 11 July), the European Economic and Social Committee adopted the following opinion by 121 votes to 7 with 4 abstentions.
1. Conclusions and recommendations for promoting female entrepreneurship in Europe
1.1 This opinion makes four key concrete proposals for policy interventions to promote and develop female entrepreneurship in order to support sustainable growth in Europe. It focuses solely on female entrepreneurship and does not address the wider dimension of female engagement in the labour market or the decision making process.
1.2 The policy recommendations are not cost–neutral, but the small investment required by the European Commission and Member States will be outweighed by the return on investment from the added economic benefit which results from the increase of female-owned businesses in the economy and from job creation within these companies. It could also be argued that funds could be redirected from low impact projects to better support the objectives.
1.3 Furthermore, the policy recommendations do not require any new structures and can be integrated into current ministries for economic development, but must not be established in gender ministries, because female entrepreneurship is an "economic" issue.
1.4 These recommendations can be supported by evidence of return on investment from the results of similar actions in the USA in terms of a doubling the number of female entrepreneurs, an increase in jobs created and economic input into society. It was the mandatory element of data collection and procurement policy which had greatest effect ( 1 ).
1.5 Create an office of European Women's Business Ownership within the European Commission and in competent ministries (preferably not gender ministries to provide a distinction between economic activities and gender
equality responsibilities) at Member State level, without establishing whole new structures.
1.6 Appoint a Women’s Enterprise Director/Envoy or High Level Representative within the European Commission and Member States' enterprise ministries, with a cross-departmental role in raising awareness about the economic benefits of encouraging more women to start and grow businesses.
1.7 Collect data and produce annual policy and research updates on women’s enterprise across European regions, increasing access to gender-disaggregated data across government departments and agencies.
1.8 Enforce current legislation in areas of gender equality. This should include a focus on ensuring that the allocation of resources and funds is analysed by gender to deliver transparency, accountability and due diligence in terms of proof of genuine gender equality compliance.
1.9 To create an enabling environment for female entrepreneurs the following should also be considered:
— including men in debate and communication;
— removing gender stereotyping, particularly in education and career paths;
— promoting academic studies which can lead to new business start-ups for women;
— ensuring fair access to funding and resources on equal terms; and
— improving social protection for self-employed.
EN C 299/24 Official Journal of the European Union 4.10.2012
( 1 ) 1988: Women’s Business Ownership Act (HR5050) http://www. nwbc.gov/sites/default/files/nwbc05.pdf.
2. Context
2.1 EU growth and small and medium-sized enterprises (SMEs)
2.1.1 The European Parliament resolution on women entrepreneurship in small and medium-sized enterprises ( 2 ) recognised that "there are discrepancies between Member States in the numbers of women entrepreneurs; whereas fewer women than men consider entrepreneurship as a viable career option and despite the upturn in the last decade in the numbers of women running SMEs, in the European Union only 1 in 10 women are entrepreneurs as opposed to 1 in 4 men; whereas women make up around 60 % of all university graduates, they are underrepresented in full-time work in the labour market, particularly in the field of business; whereas it is crucial to encourage and empower women to embark on entrepreneurial ventures in order to reduce existing gender inequalities".
2.1.2 Against the background of the financial crisis in Europe, austerity became the key word in finding a way out of the crisis. Only recently was talk of austerity complemented by talk on investment. Policies to promote growth must be the key focus.
2.1.3 In a globally changing landscape characterised by uncertainty, continuous change and much greater global competition recognising the role of entrepreneurs in channelling such investment for economic recovery is one of the key elements of ensuring a competitive and dynamic European economy. Having recognised the role of SMEs in our society, the European Commission has now made harnessing the potential of SMEs a primary focus.
2.1.4 Entrepreneurs have become even more important as providers of employment opportunities and key players for the wellbeing of local and regional communities ( 3 ). The EU, through the Lisbon Growth and Jobs Strategy, the Small Business Act, Europe 2020 and the new COSME ( 4 ), has thus firmly placed the needs of SMEs at the heart of its activities achieving positive results.
2.1.5 The national and local environments within the EU in which SMEs operate are very different and so is the nature of SMEs themselves. Policies addressing the needs of SMEs therefore need to fully recognise this diversity and fully respect the principle of subsidiarity (Think Small First - A Small Business Act for Europe).
2.1.6 In its recent opinion on the Communication "Small Business, Big World – a new partnership to help SMEs seize global opportunities" ( 5 ) the EESC notes that the Commission
assumes gender equality in business, but makes no specific recommendation to support female-owned SMEs looking at internationalisation.
2.1.7 Europe lacks an infrastructure that specifically supports female entrepreneurship. None of the above policies, subsequent interventions or provisions has fully recognised the gendered issues of business ownership, nor have they identified the growth opportunities or diversity within the business sector (home-based, micro-enterprises, family-owned).
2.2 Current policy on women-owned businesses
2.2.1 Women-owned businesses are critical to the health of the European economy. For more than a decade, governments and a range of organisations in the public, private and academic sectors have recognised the value of supporting women’s enterprise from both a policy and practical perspective. The result has been increased awareness of the contribution these businesses make to the economy.
2.2.2 The Commission is currently working with Member States to find ways to overcome the factors that discourage women from taking up the option of entrepreneurship and a number of initiatives have been launched including:
— The European Network of Mentors for Women Entrepreneurs, inaugurated during a Polish Presidency event on 15 November 2011. The Network is one of the actions proposed in the 2011 SBA Review, enforces and complements the actions to promote, support and encourage female entrepreneurship.
— European network for policy makers to promote women's entrepreneurship (WES).
— Women's entrepreneurship portal ( 6 ).
3. The economic potential
3.1 Despite encouraging progress, the EU still needs to take further significant measures to release the full potential of enterprises and especially SMEs owned by women. Women are too often invisible within the business arena – in the media, within business representative organisations, and when it comes to influencing policy.
3.2 There is a continuing gender gap in terms of entrepreneurship, which translates into fewer women entrepreneurs. Today women entrepreneurs in Europe make up only 30 % of all entrepreneurs. This adds to the unexploited potential for economic growth.
EN 4.10.2012 Official Journal of the European Union C 299/25
( 2 ) (2010/2275(INI)). ( 3 ) EESC Opinion on Employability and entrepreneurship – role of civil
society and local and regional bodies from a gender perspective (OJ C 256 of 27.10.2007, p. 114).
( 4 ) Programme for the Competitiveness of enterprises and SMEs (COSME) 2014-2020.
( 5 ) COM(2011) 702 final. ( 6 ) See: http://ec.europa.eu/enterprise/policies/sme/promoting-
entrepreneurship/women/portal/.
3.3 In 2012, the role of women-owned businesses is more important than ever, there are women-owned businesses operating across Europe, and neighbouring regions such as Euromed ( 7 ), in every sector, and their role in growing the economy, and creating and sustaining new jobs is crucial to recovery and growth.
3.4 Most worrying is that at a time when government funding for business support has been cut in many countries, and when many businesses are struggling to survive and grow, policies to support women owned business have fallen off the agenda, despite the laudable words. Women–owned businesses are a "multi-billion Euro opportunity" ( 8 ) which must be recognised and not dismissed.
3.5 One of the biggest challenges in quantifying women’s enterprise in Europe is the lack of data, both quantitative and qualitative. Business registers and many sources of government statistics (including VAT registration) are not gender-disaggregated. Similarly, gender information is not readily available from banks or business support organisations.
3.6 Despite these gaps, several consistent sources of information on entrepreneurship and self-employment provide information about male and female business-related activity. These include the Global Entrepreneurship Monitor (GEM) and the annual population surveys in most European countries (Census). Data collection in the US highlights the potential for Europe ( 9 ).
3.7 Research shows ( 10 ) that women-owned businesses invest more in training for their staff than employers in general, and that around two-thirds are aiming to increase the leadership capability of their managers. So investing to support growth- oriented women owned businesses is likely to have a greater return than on investing in businesses in general.
3.8 Most statistics are conservative forecasts and there is significant research evidence which indicates even stronger growth aspirations among female entrepreneurs, including those who are mothers ( 11 ). Research undertaken by Natwest Bank in the UK found that 88 % of women compared with 74 % of men, were predicting growth in their businesses. The growth predicted averaged 25 %.
4. Gender equity in business
4.1 The EU has an ethical duty to give women what they really deserve. The gender agenda needs to be always at the
forefront of EU decision-making. In times of crisis "gender justice" becomes even more imperative. Both men and women need to be present in the debate, as all too often issues concerning women bring only women around the table.
4.2 Gender mainstreaming policies, including legislation, are in place across Europe but do not include a focus on ensuring an analysis of the allocation of resources or funds by gender. To deliver transparency, accountability and due diligence in terms of proof of genuine gender equality compliance such analysis needs to be provided.
4.3 This is a legal requirement in the UK under the terms of "Gender Equality Duty" ( 12 ), which requires all public authorities, carrying out all their functions, to have due regard:
— to eliminate unlawful discrimination and harassment on the grounds of sex;
— to promote equality of opportunity between women and men.
This should require an analysis of allocation of resources and funds to prove gender neutrality.
4.4 The Gender Equality Duty concept is important for ensuring gender equality through responsibility and through assessment of the allocation of resources and collection of disaggregated data from a gender perspective. This would support policy makers in assessing the true impact on female entrepreneurship. (Example: regional development (ERDF) or social (ESF) funds: The EU allocates funds to Member States, which reallocate those funds to a regional level. Often those funds are used to create jobs by creating enterprises, but at no point is the question of gender raised.) To ensure gender equality transparency, each level of policy makers should question and analyse, by gender, how the money is distributed.
4.5 Gender can be a "lens" through which other inequalities (race, disability or age) can be understood and acted upon. For gender mainstreaming to be effective across Europe there needs to be an integrated approach, particularly as highlighted in the OECD report "Tackle gender gap to boost growth" ( 13 ). A focus on gender covers all aspects of equality and affects everyone, men and women. A focus on gender recognises that inequalities between women and men result from unfairness or stereotyping which affects everyone.
EN C 299/26 Official Journal of the European Union 4.10.2012
( 7 ) EESC Opinion on Promotion of Women's Entrepreneurship in the EUROMED Region (OJ C 256 of 27.10.2007).
( 8 ) See: www.wescotland.co.uk/wepg. ( 9 ) http://womeninbusiness.about.com/od/wibtrendsandstatistics/a/
statswibindustr.htm. ( 10 ) http://www.bis.gov.uk/assets/biscore/enterprise/docs/b/11-1078-bis-
small-business-survey-2010-women-led-businesses-boost.pdf. ( 11 ) http://www.enterprising-women.org/static/ew_growthreport.pdf.
( 12 ) http://freedownload.is/doc/overview-of-the-gender-equality-duty- 11622854.html.
( 13 ) http://www.oecd.org/document/0,3746,fr_21571361_44315115_ 50401407_1_1_1_1,00.html.
4.6 A gender analysis is needed to avoid wasted resources in education and training, higher levels of ill-health, economic costs to businesses where women’s skills are not valued and their potential and talents unrecognised. Furthermore, support for career guidance, overcoming stereotypes and breaking the glass ceiling is essential to empower women of all ages. Female role models and leaders also need to be more prominently featured in the media and society to promote the positive changes women bring to the economy.
5. Recommendations
5.1 Policy interventions
5.1.1 The EESC recognises that Europe is in a time of austerity measures, but simple specific policies for women owned enterprises could bring a return on investment that outweighs the small contributions from the EU and Member States to put these four proposals in place.
5.1.2 These proposals have not been randomly selected but come from consultations with female entrepreneurs and with business associations. Similar recommendations were made in the European Parliament resolution ( 14 ). Most importantly, similar measures were introduced in the US under the "Women's Business Ownership Act" (1988. It was the mandatory element of data collection and procurement which had the greatest effect. The proportion of female entrepreneurs to male ones in the US is now around 2:1 (the number of women business owners in the US, as a percentage of all businesses, increased from 26 % in 1992 to 57 % in 2002). This doubled the numbers of female entrepreneurs, increased the number of jobs created and increased the economic input into society.
5.1.3 The proposals would be to:
5.1.3.1 Create an office of Women's Business Ownership within the European Commission and Member States’ competent ministries. It should preferably not be situated in the gender ministries to provide a clear distinction between economic enterprise activities and gender equality responsibilities. It must have a serious mandate with targets and resources. DG Enterprise currently has 1 out of 900 staff solely dedicated to female entrepreneurship in Europe!
5.1.3.2 Appoint a Women’s Enterprise Director/Envoy, or High Level Representative within the European Commission and Member States’ enterprise ministries, but with a cross-departmental role for raising awareness about the economic benefits of encouraging more women to start and grow businesses. These offices should be time bound (4-10 years depending on economy and funding structure) and should have a very clear remit with specific objectives and accountability. The Women’s Enterprise Director/Envoy or
High Level Representative could also have responsibility for promoting the industry and academic tracks which lead to increased female entrepreneurship such as research, science, high-tech, direct selling and online/IT development.
5.1.3.3 Collect essential data that allows for the measurement and quantification of the allocation of resources for female entrepreneurs - a key reason why women face discrimination in business, especially in the start-up phases. Support the production of annual policy and research updates on women’s enterprise across European regions. Increase the collection of and access to gender-disaggregated data across government departments and agencies. It is essential that DG Enterprise and Economic Development Ministries across Member States conduct a Gender Impact Assessment by collecting relevant data which includes the number of female entrepreneurs, the number of women-owned businesses, the number of employees in these businesses, the allocation of resources to these businesses and entrepreneurs. It is important to recognise that countries such as Australia, Canada and the US have successfully increased levels of female entrepreneurship through the collection and analysis of such data.
5.1.3.4 Enforce current legislation in areas of gender equality. Recent figures show female unemployment at its highest level in 23 years across Europe. There is also a record level of young people, including many female graduates, who are not economically active. The gender pay gap exists and there is a lack of female representation in the decision-making process across Europe. It is essential that the EU and Member States fulfil their obligation of gender duty in disaggregating information by gender, particularly in data collection and in the allocation of resources.
5.2 Civil society interventions
5.2.1 It is proposed:
5.2.1.1 That as all activities relating to the promotion of female entrepreneurship and women owned businesses are of societal and economic benefit to all, men must be encouraged to be part of this debate and recognise the added value of promoting women's activity as entrepreneurs. The relevant communications, networks and training should include both genders and social protection should also ensure that equal treatment is given to all in society.
5.2.1.2 To ensure the accessibility of entrepreneurship to all by making sure that education at all levels removes gender stereotyping of entrepreneurs and by managing the language and terms used to describe entrepreneurs. At the same time, to ensure that support currently offered to entrepreneurs by universities and further education is attractive and useful to young women, closing the gap between the numbers of young men and young women starting businesses.
EN 4.10.2012 Official Journal of the European Union C 299/27
( 14 ) (2010/2275(INI)).
5.2.1.3 To promote traditional and non-traditional career paths for women of all ages in a gender neutral manner. Europe has many highly qualified women with degrees, many currently unemployed as a result of the crisis, who may not have considered owning their own business as an option.
5.2.1.4 To create dedicated women’s business centres offering essential business information, networks, knowledge sharing, training and mentoring. These are absent in some EU countries and often under-resourced within business associations and chambers of commerce across the EU. However, these centres where dedicated resources are applied can be highly effective in promoting female entrepreneurship. Many examples of best practice can be found in Germany.
5.2.1.5 To ensure support and access to information, funds and resources in research, science and technology for women who may wish to start their own company or develop their research or innovations.
5.2.1.6 That financial institutions review the disclosure of information on lending in relation to gender. There is
research that shows that lending to women is low and often at much higher interest rates than for men ( 15 ).
5.2.1.7 To review of social security provision for all entrepreneurs but particularly the practical aspects of provision for female entrepreneurs during pregnancy and as mothers and carers. The Commission Action Plan: The European Agenda for Entrepreneurship ( 16 ) draws attention to the need for better social security schemes, but does not go far enough in delivering relevant proposals.
5.2.1.8 To develop and implement an EU-wide public broadcasting compact, to encourage public broadcasters from Member States to commit to setting targets on gender balanced media coverage in relation to entrepreneurship – Taking women off the "female pages" and putting them on the business pages! Research indicates that media coverage can significantly and positively influence perceptions and attitudes towards female entrepreneurs. Increased media coverage of successful female entrepreneurs as role models would have a measurable impact on societal attitudes towards female entrepreneurship.
Brussels, 11 July 2012.
The President of the European Economic and Social Committee
Staffan NILSSON
EN C 299/28 Official Journal of the European Union 4.10.2012
( 15 ) See for instance "Women and banks - Are female customers facing discrimination?", IPPR report, November 2011, in: http://www. wireuk.org/uploads/files/women-banks_Nov2011_8186.pdf; "Women’s business ownership: a review of the academic, popular and internet literature", in: http://www.bis.gov.uk/files/file38362.pdf.
( 16 ) COM(2004) 70 final.
