A gender lens on the social change industry – Focusing on women, gender & social entrepreneurship

Women seem to be more attracted to start or participate in social enterprises (SEs) than in ‘regular’ business practices. While gender inequality persists in traditional entrepreneurship, SEs appear to experience fewer discrepancies between men and women in terms of positions, salaries and growth opportunities. The ‘natural’ tendency of women to act and think socially, arguably makes them more suitable for this line of work. Yet, the impact of the growing number of women getting involved in social businesses has yet to be discovered.

There has recently been an increasing interest in female entrepreneurship in general, and specifically in developing countries. There are at least two reasons for this: an increase in interest in the role of entrepreneurship in the economic development process, and the insight that female-led enterprises can have a more significant impact on the socioeconomic opportunities of households. In this light, supporting and expanding female entrepreneurship – especially female social entrepreneurship – seems to have become an objective not only to empower women, but also to reduce poverty in developing countries. This article sheds some light on the challenges of women entrepreneurs in general, and the benefits that can come from women running businesses socially. It also shows that, to date, only a few policies are known to actively support women in their social endeavours. This is perhaps due to the small amount of research conducted on the subject until now.

Challenges to entrepreneurship for women

The practice of entrepreneurship in itself marks a long-established traditional division of labour for individuals, but more so for women, due to gender identity in the market and a lack of available economic and political networks. ¹ However, mainstream economic thinking still tends to consider itself ‘gender neutral’ as entrepreneurs are perceived as rational, market-oriented individuals who have no gender, class, age, family, religion or ethnicity ² Saskia Vossenberg, an external Research Fellow on women entrepreneurship at the Maastricht School of Management, critically describes this as  ‘the imaginary entrepreneur’, who makes decisions unhindered by socioeconomic inequality or the unequal distribution of power and income, and free of family obligations or care responsibilities ³ As Anne Humbert from the Third Sector Research Centre (TSRC) affirms in her article ‘Women as Social Entrepreneurs’, such an interpretation ignores the collective nature of entrepreneurship and does not address its real diversity. The traditional perception is thus not representative of the reality women face. ⁴

Women are often those left on the sidelines of the formal economy. They face social, economic, political and legal contexts that include a gender bias and stereotyped beliefs that determine their chances on the market. Women’s start-ups often face issues related to finance. For example, estimates indicate that in Africa, women receive less than 10% of all credit going to small farmers and only 1% of the total credit for the agricultural sector ⁵ Yet they also face obstacles in access to the market, technology, and knowledge and expertise, and in availability of entrepreneurial skills ⁶ In addition, in some parts of the world (for example the Middle East and North Africa) women encounter restrictions to property ownership, legal or inheritance rights, and access to banking systems, or cannot even obtain an identity card without permission from a man ⁷ These gendered standards not only influence the level of women’s entrepreneurial engagement, but also their possibility to benefit from economic activities as customers or as a workforce. ⁸

Women often become entrepreneurs by necessity rather than choice, due to their exclusion from the formal labour market or reasons related to poverty. ⁹ As a result, women are mostly involved in the informal economy ¹⁰ and running microenterprises, having lower returns and fewer employees than their male counterparts. In addition, there is a persistent global discrepancy in male-female employment, in male-female leadership positions, and there is still a strong gender pay gap.

Such disparities between men and women entrepreneurs are less apparent when looking at social entrepreneurship. While males are generally more likely to start a social venture than females, the social entrepreneurship gender gap appears to be not as wide as with traditional commercial entrepreneurship. ¹¹ For instance, according to the Global Entrepreneurship Monitor (GEM, 2011), there are four women social entrepreneurs for every five men. ¹² A study conducted by the TSRC found that women are more inclined to get involved in ventures with a social mission and that – unlike in ‘regular’ businesses – social ventures employed around twice as many women as men. This raises the question whether male-female differences and the challenges they involve do not apply in the case of social enterprises.

According to Michelle Bachelet, the 2012 UN Women’s Executive Director and now the president of Chile, “women are natural social entrepreneurs”. ¹³ They are more inclined to think of those around them, or to ‘think more socially’. Yet, arguing that women are natural social entrepreneurs actually affirms gendered stereotypes, which often portray men as more independent and profit-oriented, while women are more sociable and relationship-oriented. ¹⁴ This stigmatization can be found throughout literature and studies conducted on women and their engagement in social enterprises. Based on its review of studies on female involvement in SEs, the TSRC argues that this stereotypical position is omnipresent, portraying women as motivated not by commercial considerations but more by a desire to act as what they describe as ‘mothers of the community’. ¹⁵ Simon Teasdale, senior lecturer in social business at the Yunus Centre for Social Business and Health, proposes that this might be partially explained by women being attracted or compelled to undertake entrepreneurial activity in less profit-oriented settings. ¹⁶

Benefits of women running businesses socially

However, there is a wide belief that much can be gained when women enter the market of social enterprises. ¹⁷ Generally speaking, and as the World Bank has already argued, “Investing in women is smart economics”. ¹⁸ According to the Bank, including women in the economic equation, either as entrepreneurs or as beneficiaries of economic policies, speeds up development and the process of overcoming poverty. This reflects their engagement in ‘regular’ business practices, but presumably also applies to those involved in the social industry. A Social Venture Network (SVN) study in the United States revealed that it makes business sense to support women in social enterprises. The network reports that women-led SEs generated an average of 15% more revenue than their male-led counterparts. The TSRC finds more moderate results in the UK, showing that social enterprises with women-dominated boards are more dependent on (public) grants and have a higher proportion of income from trading with the general public than with other ‘regular’ businesses.

Overall, there is still a lack of evidence on the effects of female social entrepreneurs. Little attention is given to how this  ‘social change industry’ is linked with gender relations, and whether women and men hold contrasting positions in the organizational structures. What is evident is that women working in the third, or non-profit, sector are less likely to face gender inequality than those working in the private sector, as the TSRC studies show. And what has been argued consistently is that supporting female entrepreneurship ‘pays off’. The more women are economically engaged, the more economies will prosper. For instance, in the US the estimated direct impact on GDP is an increase of 5% when female employment is raised to male levels. ¹⁹ Furthermore, the International Finance Corporation argues that economically-empowered women are major catalysts for development, as they usually re-invest their money for social purposes, such as a child’s education. Therefore, the conclusion that is often drawn is that women involved in social ventures have a strong socioeconomic development impact.

However, more women running social enterprises does not necessarily boost women’s empowerment or contribute to gender equality. Specific disruptive strategies are required to tackle issues influenced by gender bias.

Using a gender lens to influence social relations

For social enterprises to become more influential and increase their impact as change agents, they need to be aware of the different layers behind local problems and become part of a broader system. ²⁰ This means looking at the whole social enterprise approach through a gender lens. If socially inclusive growth is the goal, it would be rash to neglect the impact that gender-biased policies and normative standards have on the economic potential of communities and societies at large. Think of disparities in asset ownership, where women are constrained by law or custom in owning land, or women’s seclusion from the public arena in certain cultures, which could hamper their mobility and their access to information about prices, rules and rights to basic services. ²¹

A gender-sensitive approach to social entrepreneurship requires looking at people (men and women) and how they relate to the enterprise, its product, and the associated value chain. It is important to realize that, when gender issues are discussed, they refer to the meaning society gives to the roles of men and women that result in certain power relations and dynamics. In practice, such an approach means looking at the differences between opportunities for men and women to start social enterprises, as discussed above. It is also means looking at social enterprises that are offering solutions to specific issues rooted in gendered structures, or at enterprises that incorporate gender-sensitive approaches along their value chains.

The advocacy organization Women Deliver has drafted a list of 25 social enterprises that specifically ‘deliver for girls and women’. An example of a programme actively seeking to support SEs with a gender mission is WomenChangeMakers. It specifically reaches out to social entrepreneurs that address women’s access to education and healthcare, and economic and political participation. Such initiatives demonstrate the added social value of using a gender approach to running a SE as a woman, or to the women-oriented objectives of social ventures.

Studies have also been conducted into the impact of changing value chain conditions to benefit female economic empowerment. The Corporate Social Responsibility Initiative at Harvard University’s John F. Kennedy School of Government, for example, has published a series of reports on the roles companies can play in expanding economic opportunity, including a study on Coca-Cola’s women-oriented ‘5by20’ initiative. ²²

The research objective of the John F. Kennedy School of Government touches upon an essential issue, namely, what are the incentives for enterprises (even if they are already social in nature) to consider gender biases? A typical economic cost-benefit analysis shows the long-term benefits for economic growth once women enter the market. As there are additional barricades to cross, social enterprises would have the organizational structure and social purpose necessary for lifting some of the constraints that accompany female economic participation, either as entrepreneurs, clients, or as part of the value chain. ²³ However, due to the low rate of consideration given to women’s role and gender in this sector, the evidence supporting such assumptions is still to be explored.

Policy attention

When women’s role and the relevance of gender are studied in the field of ‘regular’ entrepreneurship, it is often of a general nature – addressing the economic participation of women – and therefore leads to general recommendations. These studies focus on structural issues, such as the consequences of patriarchal societies and capitalist structures. ²⁴However, a new stream of literature and programmes is emerging which focuses more on the short term than on structural imperfections that cannot be readily solved. This new trend looks at innovative strategies for women’s empowerment, and it sees a role specifically for social enterprises and how they can influence gendered patterns in society. ²⁵ Nevertheless, gender-oriented policy instruments focus mainly on increasing the revenue of women enterprises rather than on addressing the underlying gender bias that determines growth and development, or supporting women in their ambitions as social entrepreneurs.

Specific development strategies can be developed to address female social entrepreneurs, as can be learned from the development programme introduced in India (see box). There, a legion of female social entrepreneurs is trained and supported in an attempt to create a ripple effect that spreads the SE spirit across the country. In other cases, women’s economic empowerment is fostered through a combina¬tion of increased access to capital, networks and new markets, high-quality business skills and development training, and ac¬cess to broader services that offset gender-specific constraints. ²⁶ In addition, greater attention is being given to mentorship and training activities through intermediaries to increase the skill level and knowledge of potential entrepreneurs. Such supportive activities can empower women as workers and entrepreneurs, and create business engagements that are compatible with local (patriarchal) social norms.

An increasing number of nonprofits, public entities and businesses are turning social in their ambitions and organizational structure. In their endeavours, it will be crucial not to lose sight of many of the gendered constraints that influence the impact of these activities. Women need to be included in formal economic processes to strengthen national economic development and alleviate gendered constraints to economic success. If enterprises turn social with a gender lens, ongoing efforts to support women in socioeconomic efforts might just get women one step closer to an inclusive economy.

Footnotes