Entrepreneurship Policies through a Gender Lens

Iran

By Nastaran Simarasl, California State Polytechnic University - Pomona

Vahid Makizadeh, University of Hormozgan

Background

Women comprise almost half of Iran’s 83 million population (United Nations, 2019). In the last decade, women’s enrolment in Iranian universities has outnumbered that of men, yet women graduates are 33% less likely than men to find paid employment. Marriage and maternity further decrease women’s employment opportunities (Saleh-Isfahani, 2008; OECD, 2017). While restricted career mobility may lead women to choose entrepreneurship, business ownership is not a level playing field for Iranian women. While there are no laws explicitly preventing Iranian women from starting a business, women’s entrepreneurship is restricted by the institutional environment, including social norms, values and family obligations (Bruton, Ahlstrom and Li, 2010).

Policy issue: The institutional environment

Following the Islamic Revolution in Iran in 1979, women’s contribution to the economy has centred on their roles as the cornerstones of families, with social norms emphasising the virtues of child-rearing and being “a good wife.” In Iran’s regime, where principles of Sharia law1 rule, men are considered the breadwinners within their immediate families, while wives or daughters are responsible for the household. Women’s participation in the paid economy is considered unnecessary and secondary to that of men. This largely explains the low level of women’s participation in formal economic activities. Iran ranks 147^th among 153 countries with regard to women’s engagement in economic activities (World Economic Forum, 2020).

From a legal perspective, an Iranian woman’s “custody” is transferred from her father to her husband upon marriage (World Bank Group, 2016). A single woman must obey her father, and a married woman is obliged to obey her husband. This concept is referred to as “Tamkin” in Arabic.2A woman also has to obtain her legal guardian’s3 (written or verbal) permission to engage in activities outside the home, including studying, travelling and engaging in occupations based solely on the guardian’s discretion (Kokabisaghi, 2018; Human Rights Watch, 2017; Moghaddam, 2004). Such legal requirements can severely damage women’s engagement in entrepreneurial activities, particularly in instances when her husband or father does not grant permission to set up a business. A woman entrepreneur interviewed in a recent study explained the restrictions imposed upon her soon after she got married:

“During the year we were engaged, he [my husband] had seen how my business worked. He knew that my clients were all over Iran and that I had to travel a lot. After we got married, he told me “now that we have become serious, you should obey me.” After we got married, both he and his family told me: “Those ambitions were good as long as you were single. Now that you are married, your husband comes first and then your job; first your husband and then your education” (Simarasl, Pandey and Mathias, 2019).

Women’s entrepreneurship is also restricted by societal norms that do not value their engagement in economic activity (Chamlou, 2008). Widespread unfavorable sexist attitudes towards women entrepreneurs, particularly among men, are among the key challenges for women running businesses. For instance, Simarasl et al. (2019) cite a serial woman entrepreneur whose loan request was declined when she was referred to a government support organisation: “When they asked me what I wanted to do with the loan, I told them that I wanted to build a concrete manufacturing facility. The men in that organisation all laughed at me and told me that, instead, I should get a sewing machine and make money with that. They refused to give me a loan.” Another common obstacle facing Iranian women entrepreneurs, particularly nascent entrepreneurs, is the attitudes of landlords or real estate agents when women seek rental offices for their businesses. A former woman entrepreneur, who closed down her business due to the hardships she encountered, reported: “As soon as the landlord realised that I wanted to sign the lease, he said “I do not sign a lease with a woman” (Simarasl et al., 2019).

Following recent changes in the national entrepreneurship ecosystem, including the rise of e-commerce, the emergence of business angel networks and venture capitalists, and an increase in entrepreneurship training programmes and advisory services offered by the government, universities and other educational institutions (Davari and Najmabadi, 2018; Jozi, 2015), some efforts have been made to promote women’s entrepreneurship. For example, in 2017, the non-profit, non-governmental organisation – the Entrepreneurship Development Foundation for Women and Youth – launched the My Business Path initiative aimed at promoting entrepreneurial activities among women and youth. This national-level initiative has been supported by the Vice Presidency of Women and Family Affairs,4 and has been implemented in a number of provinces in Iran. It aims at identifying aspiring entrepreneurs among youth and women, providing them with entrepreneurship training, consultation and mentorship, and take them through the process of turning their business ideas into feasible ventures in underserved provinces in Iran (Entrepreneurship Development Foundation for Women and the Youth, 2020).

Conclusions and recommendations

Although foundational laws and societal norms in Iran are unfavourable for women’s entrepreneurship, initiatives such as My Business Path have the potential to increase women’s involvement in entrepreneurship over time. While changing a country’s institutional environment, especially societal norms and values, takes time, the following recommendations are offered to policy makers who seek to create institutional environments that are favourable towards women’s engagement in business ownership.

Recommendations for Iran

• Amend Iran’s civil laws in ways that ensure women’s pursuit of education, careers (including entrepreneurship) and mobility rights (which are critical to women’s entrepreneurship) are not undermined by their male guardian’s will.

• Promote women’s entrepreneurship via different national media (i.e. national television, etc.) by recognising accomplished women entrepreneurs, their challenges, and their successes.

• Familiarise all members of society (men and women) with the importance of women’s entrepreneurship from early childhood, for instance by including stories about successful women entrepreneurs in school textbooks.

• Assign advocates for women’s entrepreneurship within business support organisations to promote legal change and to champion women entrepreneurs in their efforts to raise capital, access mentorship and obtain business permits without gender discrimination.

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