Entrepreneurship Policies through a Gender Lens

Denmark

By Helle Neergaard, Aarhus University

Background

Denmark ranks 14^th among 153 countries with respect to gender equity in economic participation and opportunity, educational attainment, health and survival, and political empowerment, according to the Global Gender Gap Report (Zahidi et al., 2020). While this is encouraging, Denmark lags behind other Nordic countries: Iceland, Norway, Finland and Sweden rank respectively 1^st, 2^nd, 3^rd and 4^th. With regard to equality in economic participation and opportunity in comparison with other Nordic countries, the picture is bleaker (eports.weforum.org). Denmark is characterised by deeply-rooted gender imbalances that have not changed in the last decade (Politiken, 2018). Since 2008, Denmark has taken a gender-neutral approach to entrepreneurship policy. This implies that entrepreneurship policies do not differentiate the support needs of women and men, as policy makers assume the needs of business ownership to be identical (Petterson, 2012). Danish women entrepreneurs are invisible within an increasingly gender imbalanced society.

Although women-owned businesses constitute one of the fastest growing entrepreneurial populations in the world (Brush, 2006), Eurostat data (2016) indicate that Denmark’s share of self-employment within the EU is among the lowest of the ranked economies. With regard to new business ownership, for example, Denmark ranks third last (GEM 2019/2020). The dearth of Danish women entrepreneurs has attracted attention from multiple actors, such as the non-governmental Danish Entrepreneurship Association, whose director has stated, “[t]he situation is unsustainable. Our country lacks entrepreneurs, especially women – to create and develop a rich society” (2018: p. 1.3).

To date, there has been little policy response to address gender differences in the level of entrepreneurial activity. The most pertinent challenges relevant to Danish women entrepreneurs include, among others: lack of entrepreneurship education for women; vulnerability of women in self-employment; dual entrepreneur and caregiver roles, and political emphasis on sectors and types of growth in which women are under-represented (Neergaard and Weber, 2018; Grünfeld et al., 2020). These four key policy issues are considered below.

Policy issues: Education, self-employment, dual roles and political priorities

Education

Although Danish women have higher educational attainments than men (OECD, 2019), most complete degrees in the Humanities such as Arts, Journalism, Education, Health and Welfare, and Other Services. These academic disciplines do not typically provide the skills and competences needed to launch or manage a small business (Grünfeld et al., 2020). Indeed, 32% of Danish women perceive that they lack the competences needed for business start-up (Danish Chamber of Commerce, 2020). Moreover, significantly more men than women receive entrepreneurship education and establish businesses during and after graduation (European Commission, 2014). Danish women entrepreneurs, therefore, face a double bind: they lack the education and experience to start a business and have a tendency to start businesses in the “wrong” sectors (see the following section on self-employment). Lack of knowledge for starting a business remains a major obstacle.

Self-employment

Eighty percent of women entrepreneurs in Europe are solo-entrepreneurs or own-account workers (European Commission, 2014). In Denmark, the corresponding number is 87% while another 7% have one employee only. Women solo entrepreneurs constitute the largest cohort in the Education, Human Health and Social Work, Other Services, and the Arts, Entertainment and Recreation sectors (Grünfeld et al., 2020). Public sector entities compete in most of these sectors, and hence, are able to finance and take risks that solo entrepreneurs cannot. It is also difficult for women to start businesses in sectors in which they are not educated (Grünfeld et al., 2020). The majority of women solo entrepreneurs (79%) are liberal professionals and freelancers, and fall into the “precariat class” of employment. The precariat class includes individuals in temporary, short-term employment contracts or with fluctuating income, who accordingly have little predictability or security in their jobs (McKay et al., 2012). Self-employed workers are generally perceived to be “vulnerable workers” (Cho et al., 2016) due to workplace isolation, limited social safety nets, and operating under conditions of uncertainty (de Mol et al., 2018); they also have little job security, long working hours (more than the legislated 37-hour work week for employees), lack pensions and savings, and have limited entitlement to state benefits and private health-insurance coverage (Johnson, 2015). Many women also describe themselves as being at greater risk than employees due to the status of their work (EU-OSHA, 2010). While this is true for all workers, given that 70% to 80% of women entrepreneurs are solo/own-account workers, these issues are particularly pertinent. Danish women entrepreneurs also have a higher mortality rate compared to men entrepreneurs, while men entrepreneurs live 10% longer than the general male population (Andersen et al., 2009). The vulnerability of self-employment as an entrepreneurial career constitutes a significant barrier for women.

Dual entrepreneur and caregiver roles

In Denmark, women continue to assume the primary role of caregiver. Many enter business ownership to achieve flexibility and work/life balance. For some women, entrepreneurship is viewed as a way to conciliate family and professional demands. Danish legislation, however, makes it difficult to maintain a business while on maternity leave (Neergaard and Thrane, 2011). Indeed, maternity benefits are based on a percentage of earnings in the previous year, and earnings of nascent or new firms are generally low. Women are permitted to work a few hours per day while on maternity leave. Parental responsibilities and inadequate maternity leave policies result in discontinuance of many women-owned businesses (Neergaard and Thrane, 2011).

Political priorities

Danish entrepreneurship policies prioritise rapid-growth enterprises, as evidenced in the types of support programmes offered by government (e.g. by the Innovation Foundation). Yet, across most economies and compared to men, women typically grow their businesses at a slower rate (Grünfeld et al., 2020). Many women also prefer to grow their businesses through collaboration with other firms, rather than through hiring. Incremental growth in turnover and job creation are then spread over many businesses, a practice that is not adequately captured by traditional government measures of economic contribution and firm growth. Furthermore, traditional financial institutions, such as banks, rarely take a long-term perspective or fully understand the liberal professions. This affects their ability to advise and support entrepreneurs in these professions and can result in declined financing (Constantinidis et al., 2006; Leitch et al., 2018). Capitalisation of firms can require entrepreneurs to relinquish a portion of the ownership. Further, many women prefer steady and measured growth (profit over scaling) and self-financing. Research also shows that women use crowdfunding more successfully than men, both in raising money and in reaching their finance targets (Abouzahr et al., 2018). Crowdfunding may be a preferred choice because it does not require dilution of firm ownership or collateral (Chandramouli, 2018). Therefore, it is important to identify gender-sensitive metrics, and to educate financial advisors and providers of capital on women entrepreneurs’ preferences and needs.

Conclusions and recommendations

Since 2014, Denmark has had no policies or small business initiatives targeted explicitly at women entrepreneurs (Petersson et al., 2017), and no strategy for increasing support to women entrepreneurs within mainstream entrepreneurship initiatives. Yet, research suggests that dedicated women’s programmes have a greater impact in incentivising women’s entrepreneurship than mainstream programmes (OECD/EU, 2018). There remains a need for increased awareness of the different conditions faced by entrepreneurial men and women, and differences in management practices to inform the development of gender-sensitive entrepreneurship policies.

Traditional government metrics used to gauge economic contribution are insufficient for enhanced understanding of the ecosystem mechanisms that result in performance variations among entrepreneurial men and women. Measuring growth in terms of turnover and employees, for example, portrays women-owned enterprises as “less” when many women choose forms or strategies of growth that are not reflected in these measures. Understanding the contributions and decisions of women entrepreneurs is essential for the development of policies to strengthen the entrepreneurial ecosystem, fixing the system rather than “fixing” women to match the expectations of men. This will require consultation with women entrepreneurs to gain an in-depth understanding of their support needs and preferences.

Recommendations for Denmark

• Introduce enterprise/entrepreneurship education and training programmes for the Humanities and other women-dominated academic disciplines.

• Reduce the vulnerability of self-employed women by tailoring family policies and business supports to better fit the needs of women entrepreneurs. This includes improving maternity policies and programme eligibility criteria.

• Develop gender-sensitive measures of entrepreneurship and entrepreneurship support.

• Educate financial advisors and providers of financial capital about women entrepreneurs’ preferences and capital needs (e.g. implement policies that facilitate micro-financing and access to soft capital for women entrepreneurs).

References

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