EU SME policies encouraging women to start businesses are an important first step in achieving greater European entrepreneurship equality, but are not sufficiently oriented towards growth, according to Irish entrepreneurial expert Paula Fitzsimons.
Paula Fitzsimons is Irish national coordinator for the Global Entrepreneurship Monitor (GEM) and director of ‘Going for Growth’, as part of Fitzsimons Consulting, which specialises in entrepreneurship and growth.
She was speaking to Olof Gill.
European Employment Commissioner Vladimir Špidla recently made the point that increasing female entrepreneurship will be key to Europe competing in the global market in the future. Your argument is that people – and in this instance women – should be encouraged to grow businesses as well as start them.
Yes, absolutely. We have a clear recognition that there aren’t enough women starting businesses, and women are viewed as a potential entrepreneurial talent pool.
But if you want to make a significant contribution to economic growth, innovation and productivity, those businesses must become capable of growth. It’s quite clear that Europe needs more ‘gazelles’ – i.e. companies capable of significant growth – and the point we’re making is that we need to encourage women to not only be self-employed but to break the barrier to employing one or two people, or to move further if they’re already significant employers.
In short, we should be pushing for them to have a growth aspiration at the earliest possible stage. They must have this initial strategic positioning.
Swedish Vice-Premier Maud Olofsson, whose country currently holds the EU presidency, recently called for EU policies to mirror Sweden’s aggressive entrepreneurship equality policies. Do you think EU policies could go further?
I think the EU can be even more ambitious. Certainly, putting a spotlight on getting more women to become entrepreneurs is important as a first step, but I think policies should be encouraging women from the outset, not only to have an entrepreneurial mindset, but an entrepreneurial mindset which is sustainable and focused on growth.
Sustainability is crucial, because we must be careful that we’re not actually giving an “opportunity cost” to either the woman herself or to society in general, and thus ensure that her labour is worth more as a self-employed person than as an employee.
To what extent have the Swedes succeded in promoting a genuine EU equality agenda compared to previous EU presidencies?
The Swedish Presidency’s concern for European SMEs has been high in general, and within that they have repeated ‘women’s entrepreneurship’ as a mantra right the way through, so they have certainly put it very high on the agenda, and I think they are to be congratulated for that.
Before, it was almost considered politically incorrect to ask for any positive action, but the Swedes are saying ‘we have this talent pool – let’s use it for the good of Sweden and the good of Europe’.
On the subject of positive action, do the EU policies you are familiar with go far enough in this regard?
I think the ‘spotlight effect’ we mentioned already can have a very positive impact, and I wouldn’t be expecting Europe to do everything. In actual fact, member states can often try something out in a small way and see if it works, and that can lead to the identification of best practice.
For example, we have demonstrated that our Going for Growth initiative – which was really put together on a shoestring and was piloted with 60 women in Ireland – can work, and that it’s something which could be rolled out among member states, as opposed to trying to conceive something at a very high policymaking level that is developed from the top-down.
You start small, you refine, and then you tailor to the circumstances. In providing various forums for these matters to be discussed, the EU is in my opinion being aggressively positive. EU funding is also crucial in providing initiatives like ours with start-up capital.
Do men and women start different types of businesses?
Women by and large set up different types of businesses to men. Women tend to work in the services sector, and this trend in the labour market is reflected in female entrepreneurship.
Often the barriers to entry are lower, and the amount of money they need to start their business is less than those typically set up by men. Men are much more dominant in manufacturing and construction, whereas women are more active in retail, hotel and catering.
In fact, one third of women’s businesses are being set up in these consumer-type services. Where we’re not seeing many women is in innovation, in the high-tech space. Because of this, many of the businesses set up by women do not attract venture capital in the same way as other businesses.
That’s not to say that women can’t set up businesses that in the long run will attract business angels and venture capital funding, but at the outset, the type of businesses started by women and their aspirations for them usually require different types of funding.