Business networks of entrepreneurs help them to access resources including finance, advice and business ideas, as well as connections to markets and suppliers. Yet, women entrepreneurs typically have smaller and less developed business networks compared to men entrepreneurs. This chapter discusses the main policy issues related to strengthening entrepreneurship networks and local entrepreneurial ecosystems for women entrepreneurs. Policy insight notes on the Palestinian Authority and Scotland (UK) are presented to illustrate this discussion. Success factors and lessons are highlighted.
Entrepreneurship Policies through a Gender Lens
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OECD Studies on SMEs and Entrepreneurship
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7. Supporting networks for women entrepreneurs
Abstract
The importance of entrepreneurship networks and supportive ecosystems
Entrepreneurship networks link existing and prospective entrepreneurs to other entrepreneurs, business service providers and other actors in reciprocal relationships that offer information and support. These networks play other important roles in helping entrepreneurs develop their projects – e.g. by facilitating access to finance, identifying business partners, suppliers, employees and customers, and stimulating ideas for new products, processes, organisational methods and business models. Networking can also positively impact entrepreneurial intentions and the ability to identify and exploit business opportunities (OECD/EU, 2019). Networking can provide cost-effective advice, access to finance, emotional support and social legitimacy (Hanson and Blake, 2009).
However, women and men’s networking behaviours often differ (Minniti, 2017). Women’s entrepreneurial networks are typically smaller, comprising more family and friends than business connections; having fewer “weak ties”, more homogenous contacts, and are less extensive than men’s networks (OECD/EU, 2018; Henry et al., 2020). Women entrepreneurs, on average, typically have smaller and more informal networks than their men counterparts. Consequently, they are less likely to interact with individuals who control key resources (Brush et al., 2004). One of the factors that explains the tendency to have weaker entrepreneurship networks is that women often have had fewer opportunities to build professional relationships in educational, workplace and social contexts compared to men. Moreover, women entrepreneurs are less inclined to join business associations, special interest groups and large formal networks (Klyver, 2011). Accordingly, when it comes to networking, women may be disadvantaged compared to their men counterparts (Foss, 2017).
Similarly, women tend to be less embedded than men in entrepreneurial ecosystems. An entrepreneurial ecosystem can be defined as a:
“set of interconnected entrepreneurial actors (both potential and existing), entrepreneurial organisations (e.g. firms, venture capitalists, business angels, banks), institutions (universities, public sector agencies, financial bodies) and entrepreneurial processes (e.g. the business birth rate, numbers of high growth firms, levels of ‘blockbuster entrepreneurship’, number of serial entrepreneurs, degree of sell-out mentality within firms and levels of entrepreneurial ambition) which formally and informally coalesce to connect, mediate and govern the performance within the local entrepreneurial environment” (Mason and Brown, 2014).
Entrepreneurial ecosystems can have a strong influence on business development and growth because firms do not exist on their own in a vacuum, rather, they interact with suppliers, customers, financiers and other actors in the local area and beyond. Entrepreneurship policy is increasingly focusing on holistic activities that support entrepreneurial ecosystems as a whole, rather than activities targeted at the individual entrepreneur or enterprise (Stam, 2015). This more holistic approach involves supporting a range of informal and formal intermediaries including banks, universities/colleges, small business and innovation support organisations, and industry networks (Isenberg, 2010).
Women entrepreneurs, however, often find it difficult to become fully integrated within local entrepreneurial ecosystems. Significant barriers include their smaller and less effective networks and lower levels of perceived legitimacy of their businesses. Strengthening entrepreneurial ecosystems and the participation of women in them is important given that “women especially benefit from strong entrepreneurship contexts” (GEM, 2018/2019). Dedicated networks and institutions for women entrepreneurs may often be required.
A systematic review of literature on women’s enterprise ecosystems recently concluded that most policy recommendations by academics are “vague, conservative, and centre on identifying skills gaps in women entrepreneurs that need to be fixed, thus isolating and individualising any perceived problem” (Foss et al., 2019). Attention is needed to strengthen the accessibility of small business support organisations to women entrepreneurs; addressing challenges in recruiting diverse (non-white, privileged) clients to these organisations, and changing the organisational cultures and tolerance of gender bias (Orser et al., 2019). Lack of monitoring of the performance of high-status publicly-funded entrepreneurship support programmes further stymies inclusiveness.
Furthermore, reporting on women’s entrepreneurship by agencies such as the United Nations, International Labour Office and the World Bank tends to emphasise necessity-based entrepreneurship, self-employment and poverty alleviation. However, it is opportunity-driven entrepreneurship that motivates the majority of women in developed economies (Global Entrepreneurship Monitor, 2018/2019). Conversely, most studies about women entrepreneurs and entrepreneurial ecosystems are situated in the Global North, with findings that remain “largely untested in the developing contexts of the Global South” (Apostolopoulos et al., 2018).
The role of public policy
One of the main areas of public policy action to support the access of women entrepreneurs to resources is the creation of networks focused on bringing entrepreneurs together or linking groups of entrepreneurs with business services professionals in local entrepreneurial ecosystems. A common approach is to link network creation to an entrepreneurship training programme, which creates a commonality to the network. Policy can bring entrepreneurs together into online networks, or link small local networks into larger national networks that provide greater opportunities to access resources. Many initiatives focus on networks of women entrepreneurs specifically. This helps to build strong connections quickly because it is easier to build trust among people with common traits. However, in addition, policy needs to build bridges to stakeholders from other communities.
Key success factors for policy support for women’s entrepreneurship networks are: 1) network structures and processes that ensure a high degree of interaction between members; 2) network members feeling ownership of the network; and 3) networks being proactive. Policy makers must be careful not to create a plethora of entrepreneurship networks that crowd each other out. It is also important that support does not reinforce the exclusion of women entrepreneurs from mainstream networks and resources by focussing solely on links among women rather than building connections with others in the ecosystem.
Lessons from the policy cases
The policy insight notes in this section (Palestinian Authority and Scotland, UK) highlight the need for specific support for entrepreneurship networks for women. They suggest that policy interventions to enhance entrepreneurial ecosystems generally do not yet recognise the needs of women entrepreneurs. These observations are consistent with international research that shows a lack of gender-sensitive mainstream interventions and limited women-focused programme support (Henry et al., 2017; Coleman et al., 2018). Government funding criteria and programme assessments are not typically accountable for the inclusion of women entrepreneurs.
These two insight notes highlight the following lessons for policy makers in other countries:
1. Networking support is especially important for women entrepreneurs. For a variety of reasons, women entrepreneurs may not have access to the same supports and resources as men. Networking programmes can be a vital support. They need to be organised and co-ordinated, involve all relevant stakeholder groups and avail of appropriate platforms including digital platforms.
2. Networking programmes should not be offered in isolation, but in conjunction with other supports. It is particularly relevant to package networking support with mentoring and entrepreneurial skills development programmes for women.
3. There is insufficient access of women entrepreneurs to high-quality policy and non-policy supports offered in entrepreneurial ecosystems. This reinforces the low status and legitimacy of the women-focused advisory services offered.
4. More funding is needed for women-focused organisations and initiatives in entrepreneurial ecosystems. This support should foster more inclusive entrepreneurship cultures, address gender barriers within mainstream interventions, strengthen the design of women’s entrepreneurship supports and build more supportive legal, cultural and regulatory environments for women entrepreneurs.
References
Apostolopoulos, N., H. Al-Dajani, D. Holt, P. Jones and R. Newbery, R., (2018), “Entrepreneurship and the Sustainable Development Goals,” in G. McElwee and P. Jones (eds.), Contemporary Issues in Entrepreneurship Research, Vol. 8.
Bosma, N., and D. Kelley (2019), “Global Entrepreneurship Monitor 2018/2019 Global Report”, Babson Park: Global Entrepreneurship Research Association.
Coleman, S., C. Henry, B. Orser, L. Foss, and F. Welter (2018), “Policy Support for Women Entrepreneurs’ Access to Financial Capital: Evidence from Canada, Germany, Ireland, Norway, and the United States”, Journal of Small Business Management.
Foss, L., C. Henry, H. Ahl and G. H. Mikalsen (2019), “Women’s entrepreneurship policy research: a 30-year review of the evidence”, Small Business Economics, Vol. 53, No. 2, pp. 409-429.
Henry, C., B. Orser, S. Coleman, L. Foss and F. Welter, F. (2017), “Women’s entrepreneurship policy: a 13-nation cross-country comparison”, in Entrepreneurial Ecosystems and Growth of Women’s Entrepreneurship, Edward Elgar Publishing.
Isenberg, D. J. (2010), “THE BIG IDEA how to start an entrepreneurial revolution,” Harvard Business Review, Vol. 88, No. 6, pp. 40.
Mason, C. and R. Brown (2014), “Entrepreneurial Ecosystems and Growth Oriented Entrepreneurship”, prepared for the OECD, https://www.oecd.org/cfe/leed/entrepreneurial-ecosystems.pdf.
Orser, B., C. Elliott and W. Cukier (2019), “Strengthening Ecosystem Supports for Women Entrepreneurs,” Telfer School of Management, University of Ottawa and Ryerson University Diversity Institute, http://sites.telfer.uottawa.ca/were/.
Stam, E. (2015), “Entrepreneurial ecosystems and regional policy: a sympathetic critique,” European Planning Studies, Vol. 23, No. 9, pp. 1759-1769.
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World Economic Forum (2016), “The Global Gender Gap Report 2016,” Geneva, http://reports.weforum.org/global-gender-gap-report-2016/.