Female entrepreneurs still vastly outnumbered in Europe

Company_hands.jpg

As the European Commission pushes for greater gender balance in its own ranks, the EURACTIV network takes a look at how women across Europe fare in the business world.

Women are increasingly represented in the workplace and major strides have been made in this regard over the past generation. The financial crisis has hit male-dominated industries hardest, with manufacturing and the construction sectors shedding jobs. 

Other traditionally male-oriented jobs in mining and farming have also been in long-term decline, leading some to speculate that there will soon be more women than men in the workplace. 

But a different picture emerges when examining the boardrooms of blue-chip companies. Men still dominate senior management positions and are significantly more likely to run their own business. 

This disparity in the number of female entrepreneurs is an issue the Sweden has highlighted during its six-month EU presidency. Europe’s Small Business Act (SBA) also stressed the importance for promoting female entrepreneurship. 

The SBA calls for mentoring schemes to inspire women to launch their own start-ups and establish a network of female entrepreneur ‘ambassadors’. This network was established earlier this month. 

Nonetheless, the scale of the task remains daunting, with female leaders in the business and political worlds being the exception rather than the rule. 

Germany

In Germany, Chancellor Angela Merkel has said she is unhappy with the level of female representation in the labour market and in politics. She has also accepted that her own Christian Democratic Party (CDU) has too few women in key positions. 

The new German cabinet includes just four female ministers out of a 15-strong team. Asked by journalists if female executives would be encouraged by this ratio, Merkel said the head of government is a woman and the example is set at the top. 

The current economic crisis is far from an ideal starting point to begin fighting under-representation of women in top positions. Although 47% of all workers and employees are female, only 33% are in higher positions. In top positions and the level of senior decision-makers, just 21% are female. 

There is a broad spectrum of gender ratios from industry to industry, ranging from 53% in the services sector and 39% percent in public administration to 14% in the construction industry. 

Gender-specific differences in salaries also remain and women are heavily outnumbered in the boardroom. In Germany’s 600 most important companies, there are only 42 women out of 1,721 board members, which is a proportion of 2.4% and this small figure has been declining since 2005. 

The German Green Party recently sought to bring in a 40% quota for the boards of companies quoted on the stock market. Jutta Glock, a very well-known professor and lawyer in Berlin dealing with problems of management personnel, is supporting the proposal, arguing that it is scientifically proven that companies with at least three women on their board are more successful. 

The share of female entrepreneurs setting up businesses is increasing slowly, but women still account for no more than 29% of all German start-ups. 

There are about 520,000 companies managed by female entrepreneurs, which is 18% of all German companies but – for a range of reasons – they produce only 5.6% of the total turnover of German firms. 

Another interesting ratio is the number of daughters taking over family businesses: just 10%. 

France 

Despite a strong performance as entrepreneurs, women still earn less than men in France. On average, female workers earn 17.9% less than their male counterparts. 

Looking at the boardroom, there are no female CEOs at the 40 biggest French companies. The figure is not as low in the small business sector, but France could certainly do better as far as gender diversity is concerned. 

The board of directors of the 40 biggest companies include just 8.8% of women, according to a study by a consulting agency Capitalcom. The rate in executive committees is only 6.8%. 

Women account for 47.2% of the total workforce, according to the Ministry of Employment and Solidarity’s “key figures” for 2008. But the proportion of casual contracts is substantially higher among women and they still earn less than their male counterparts. The gap between salaries is 23.1% for executives, although the gap is narrower in the civil service. 

Less than one third – 29% – of businesses are created by women, according to a 2006 study by the Information System about New Businesses (SINE). Women usually hold higher-level degrees but they are less experienced than male entrepreneurs and they invest less money. The French state implemented a funding system exclusively for women in 1989 after realising that banks were more reluctant to lend them funds to start their own business. An “equality label” was created in 2004 for businesses which respect certain norms in gender diversity. 

A study carried out by the government agency responsible for the creation of businesses showed that women led 31% of the SMEs included in the sample. These SMEs led by women are smaller and mainly operate in the specialised services sector. These discrepancies in the workplace have fomented a debate about whether to enforce quotes. 

UK 

In the UK, the downturn has hit men harder than women. While men have been losing jobs since the beginning of 2008, it was the end of last year before female unemployment began to rise. Even then, fewer women are losing their jobs compared to their male counterparts. 

The Office for National Statistics (ONS) says the difference is explained, in part, by the fact that women are more likely to work in the public sector than men. It also notes that women have largely been insulated from major job losses in heavy manufacturing industries. 

A high proportion of business ownership in the UK, around 90%, is made up of the self-employed. The number of women who are self-employed has grown in recent years, but munch of the growth is in women working part-time and among those focusing on more flexible working patterns to fit into domestic commitments. 

Research suggests that the southern regions of the UK have higher self-employment rates than the northern areas, but this disparity is lower if only those working full-time in self-employment are considered. 

Czech Republic 

Female entrepreneurs account for 9.6% of total female employment – which includes employees, employers and the self-employed – while 20% of working men are categorised as entrepreneurs, according to the Czech Statistical Office. 

While women, both as employees and entrepreneurs, dominate the health and social work sectors, men dominate construction and manufacturing. Most female entrepreneurs in the Czech Republic focus on providing services in areas like cosmetics, hairdressing, massage and cleaning, etc., says the Office. 

“Women generally do not tend to take risks, which is the main reason for the imbalance,” says Helena Cetlová, president of STAM, a regional organisation of female entrepreneurs and managers. “In most cases women prefer to be employed,” she adds. 

Asked by EURACTIV why women are not as well paid as men, Cetlová said lower education and time spent on maternity leave during their prime working years play a part. There may also be social reasons, such as men discouraging women building their own careers, she said. 

Lenka Š?astná from the Association of Female Entrepreneurs and Managers (APM) agrees that most women prefer being employed to starting up their own business. 

“Starting up a new business is usually very time-consuming but women have no additional time while taking care of babies,” she says. According to Š?astná, women face problems adjusting to the ways of “male business networking”. 

Both Š?astná and Cetlová think that national “pro-family” policy is poorly designed and offers few tools to support women who want to combine family and business life. 

Italy 

In Italy, just 167 out of 2,831 seats on company boards are occupied by women. This means women occupy only 4% of leading positions in business. Of the 1,200 chief financial officers (CFOs) at the most important companies in the country, only 70 are women. However, data shows that companies with a stronger female presence have fared better during the economic crisis. These companies have also offered higher yields and generally performed better economically. 

Between 2001 and 2007, female-run companies with an annual turnover of more than €200 million have increased at an average rate of 8.8% annually, compared to 8.6% for male-run companies. 

For companies with a turnover between €50 million and €200 million, the difference is even starker: female-owned businesses grew by 7.7% compared to 6.5% for male-owned businesses. Finally, in the case of companies with a turnover between €10 million and €50 million, female enterprises grew by 3.6% per annum, while male enterprises grew by just by 2.7%. 

Italian parliamentarian Lella Golfo, a member of Silvio Berlusconi’s PDL party, has proposed a bill which would change the election procedures for company boards listed on the stock market. 

“The bill I proposed in the Parliament calls for each company’s statute to reserve a quota of at least 30% for each gender,” she said. However, the proposal would not be applied to small and medium-sized enterprises (SMEs), the composition of which is often linked to family relationships. 

According to a study by Unioncamere and InfoCamere, women leading SMEs and micro enterprises fared better than their male colleagues in weathering the storm of the economic crisis. 

“In the period 2007-2008, women who hold individual companies have remained stable,” said the Union of Italian Chambers of Commerce. 

Across Italy, 25.5% of businesses are owned by women. Compared to 2007, the small army of women managers has performed relatively better than their male colleagues, particularly in business services such as information technology, professional services and advice. 

The number of women in boardrooms has increased in the hotel and restaurant sector as well as in health, construction, agriculture, transport and communication fields. 

Slovakia 

In 2008, women made up around one in four of all enterprises in the Slovak Republic. They are concentrated in the services sector, and are very rare in the industrial sector. 

“Female entrepreneurship in Slovakia is influenced by significant regional disparities. One solution to remove these differences may be to stimulate the business environment. Even though the number of new entrepreneurs in Slovakia is rising, it lags behind the rest of the EU in attracting women to start up their own business,” Jozef Hudák of the economy ministry told EURACTIV. 

The economy ministry says female entrepreneurs in Slovakia have equal opportunities when trying to access state support. But organisations defending the interests of Slovak women running their own businesses expect more to be done to promote female entrepreneurship. Their main argument is that women have a great responsibility in running a household and raising their children. 

“The most efficient female entrepreneurship stimulus depends on the successful development of economy,” Hudák stressed. 

One of the initiatives for promoting female entrepreneurship and motivating Slovak women to start to run their own business is the ‘Best Female Entrepreneur of the Year’ award organised by the National Agency for the Development of Small and Medium-sized Enterprises (NADSME). The prize was first awarded in 1999. 

NADSME also supports the European Network of Female Entrepreneurship Ambassadors, which was coordinated by the Enterprise Europe Network initiative. In September, Slovakia appointed eight enterprise ambassadors – one for every region in Slovakia. 

Hungary 

In Hungary, 15.17% of men are entrepreneurs and 8.33% are women. Women are twice as willing to start individual enterpreneurial activity as men, but when it comes to heading up limited companies, men dominate the top positions. Two thirds of large companies are run by men. 

Of the businesses led by women, 93% are micro enterprises and 28% do not have any employees. The corresponding figures for men show that 92% of male-run businesses are micro-enterprises and 20% do not employ staff. 

Female entrepreneurs are supported by the economy and transport ministry. Several organisations, including the Centre for Young Enterpreneurs in Budapest, use this resource to fund projects. The latter organisation provides training for 200 people in groups of 25. 

In addition, the social affairs ministry has several programmes for enhancing the participation of women in public and economic life. However, the presence of women in high-profile positions is not yet mainstream in Hungary. 

Hungary does not participate in the ‘Female Entrepreneurship Ambassadors’ initiative led by the Swedish EU Presidency. 

According to the European Commission, the entrepreneurial potential of women constitutes an "underdeveloped source of economic growth and of new jobs". At present, on average, women make up 30% of the entrepreneurs in the EU, but "often face greater difficulties than men in starting up businesses and in accessing finance and training," says the EU executive. 

As part of its ongoing strategy to increase the number of female entrepreneurs in the EU, the Commission launched a 'European Network of Female Entrepreneurship Ambassadors' earlier this month (EURACTIV 06/10/09). These will share experiences, compare notes and act as role models to inspire women to become entrepreneurs across the 27-member EU. 

At political level, the Commission has encouraged governments to nominate female candidates to the next EU executive (EURACTIV 14/10/09). There was also some disquiet after the European parliamentary elections, when no significant progress was made towards addressing the gender imbalance (EURACTIV 11/6/09). Around 35% of MEPs are currently female. 

Supporter

Borderlex

From Twitter

Subscribe to our newsletters

Subscribe

Want to know what's going on in the EU Capitals daily? Subscribe now to our new 9am newsletter.