Entrepreneurship: Invest in what women bring to the table

Dubai - 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, experts say

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.

rohma@khaleejtimes.com