When you combine the fact that women are the driving force behind many household decisions, with the fact that businesses started by women are overwhelmingly more profitable than their male counterparts, then it should come as no surprise that organisations across the UAE are looking to increase their investment in startups launched by women entrepreneurs, experts said.
But while the landscape for women entrepreneurs is slowly evolving in the UAE, in tandem with a positive global trend, many women still face a myriad of issues that need to be addressed including, but not limited, to early stage funding, ingrained gender bias, and lack of mentorship opportunities.
According to a report by the Boston Consulting Group (BCG), if male and female entrepreneurs participated equally in the economy, global GDP would rise by three to six per cent, and the world economy would be boosted by about $2.5 trillion to $5 trillion. Currently, women entrepreneurs add $5 trillion to global wealth pool every year - faster than in the years past - and currently control 32 per cent of the global wealth.
The research also found that the highest rates of women’s entrepreneurial intentions were reported in the Middle East and North Africa (Mena) region at 36.6 per cent, referring to a clear trend of younger women founding companies in countries like the UAE, Saudi Arabia, and Qatar. Analysis has also shown that if gender inequality is disbarred for entrepreneurs, the region could realize $600 billion in economic impact annually; or $2.7 trillion by 2025.
Lack of financial support
Ashish Panjabi, president of the Dubai Chapter of TiE Women, a global initiative to boost and support female-led businesses, said that regardless of the myriad benefits that go far beyond boosting the global GDP, women are struggling to survive in the business environment, given the challenges they face.
“The biggest hurdle they face is limited funding,” he said. “Women-led businesses are among the leading ventures that lack financial support. It is also common for women to be denied loans because of gender and cultural biases. The second challenge we notice is that the fear of the known and the unknown is a major issue for women. They dread failing, especially if the people surrounding them were sceptical of their capability in business. This fear is toxic and perilous, because women may end up operating from a place of fear instead of confidence.”
“We are all aware of the gender pay gap and the lesser spoken for - gender investment gap,” he added.
According to the BCG, when women business owners pitch their ideas to investors for early-stage capital, they receive significantly less - a disparity that averages more than $1 million - than men.
But the fact is, Panjabi said, that businesses founded by women ultimately deliver higher revenue - more than twice as much per dollar invested - than those founded by men, making women-owned companies’ better investments for financial backers.
Additionally, a growing body of evidence shows that organisations with a higher percentage of women in leadership roles outperform male-dominated companies. However, it was found that legal and social barriers that exist for women’s access to jobs is costing the Mena region over $575 billion. According to a survey by PwC, only 56 per cent of women felt that they were treated equally to men when it came to promotions - 55 per cent in KSA and Egypt, and 66 per cent in UAE.
“While we women find ways to turn hurdles into opportunities, some hurdles still remain such as stereotyping of women within finance-related businesses, and views on the ability to balance work and home responsibilities,” said Shameema Parveen, CEO of Edutech and co-chair of TiE Women in the Mena region. “Access to finance is a challenge for all entrepreneurs, but especially women entrepreneurs, due to the lack of confidence exhibited by financial institutions. Governments and policies can support women entrepreneurs with access to specific grants and financial instruments for women-owned business to help them scale successfully.”
UAE takes action
The UAE Government has already started several initiatives that are committed to driving gender equality in the business world and to help female entrepreneurs succeed in their businesses. It pledged $50 million to the Women Entrepreneurs Finance Initiative fund in 2017, leading to the closure of 64 per cent of the overall gender gap in the UAE workforce. In addition, gender equality is one of the UAE Government’s declared sustainable development goals so that it becomes one of the top 25 countries in the world for gender equality by 2021.
“Women constitute 70 per cent of the UAE’s university graduates and 44 per cent of the total workforce,” said Justina Eitzinger, COO of Images RetailME. “The socio-economic conditions create the perfect environment for women entrepreneurship and we have seen how a number of women have come up in the business and corporate world. Women are now actively participating in the start-up movement to change and disrupt various industries by developing innovative start-ups – some of which we are highlighting today. Women are key to the UAE’s economic future. With a surge in women entrepreneur support groups and increased funding for new businesses, there have never been better entrepreneurial opportunities for women to start businesses in the UAE than now.”
Similarly, Panjabi noted that the UAE business environment is committed to driving equality in the business world, and the UAE Government is implementing initiatives to empower female entrepreneurs. “Some of these initiatives include the rise of Women Entrepreneur Support Groups, Women Entrepreneurs Finance Initiative, Support Through Private Company Partnerships, Business Setup Packages Exclusively for Women. Also, most universities in the UAE have associated with incubators to promote entrepreneurship. The role, though, that they can play is to make sure they have more women involved in running these incubators or in investment committees as that immediately helps in level the playing field.”
“In the past couple of years, we have witnessed a major transformation in the UAE to diversify its economy and reduce its reliance on the oil & gas industry,” said business advisor and startup mentor Anastasiya Golovatenko. “The government with its ambitious Vision 2021 aims to increase entrepreneurship in the region, ensuring the UAE will be a global economic player long after the region’s oil runs out. As a result of its positive efforts in this area, the nation is now known across the globe as the hub of innovation and the latest developments.”
In Dubai, start-ups and SMEs make up 47 per cent of the emirate’s GDP. According to the Ministry of Economy, about half of the small-to-medium enterprise sector in the UAE is handled by women; further, 48 per cent of women business owners are also the sole owners of their firms.
“Women empowerment in the country is evident as they constitute a vital part of the nation’s workforce and is nothing short of a portrait of success,” Golovatenko said. “As a result of different barriers, women entrepreneurs usually run smaller enterprises, earn less than their male peers, and are more likely to give up on opportunities. To better address women’s needs, we believe it’s important to support and empower them with tips and step by step guidance helping women entrepreneurs transform their business concepts into high-potential enterprises.”
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