Region-wide, only 13% of businesses are owned by women
- Females in many GCC nations face unique obstacles to obtain support to start and maintain their businesses
- Based on the scarcity of initiatives which target aspiring female entrepreneurs, more entrepreneurship education and training for women is needed in the GCC
The Arab World generally has low rates of female entrepreneurship. Region-wide, women own 13% of firms, which is lower than most other regions including Europe, Central Asia, East Asia, and Latin America (Chamlou, 2008). One reason for low official rates of female entrepreneurship in the region is that a considerable amount of female entrepreneurship is conducted informally through home-based businesses which are not captured by official statistics. Traditional beliefs about the role of women and familial obligations remain a barrier to increased levels of entrepreneurship (Aradi, Buckner, & Schwalje, Forthcoming).
We crafted a policy agenda that offers systemic reforms to empower women.
Learn about our Public Sector Strategy and Execution services here.
In the GCC, evidence suggests that female entrepreneurship rates are substantially lower than male entrepreneurship rates.
In Qatar, for example, female owned businesses constitute only 3.5% of all businesses (Organization for Economic Cooperation and Development, 2009). Among respondents to a Global Entrepreneurship Monitoring report on entrepreneurship in the UAE, 11.8% of male respondents were early stage entrepreneurs while only 7.6% of women were early stage entrepreneurs. However, male respondents in the UAE were much more likely to be established entrepreneurs – at 7%, while only 0.9% of females were established entrepreneurs (El-Sokari, Vanhorne, Zeng-Yuhuang, & Alawad, 2013). In Saudi Arabia, approximately 12% of males are engaged in early stage entrepreneurship while only 6% of women are engaged in early stage entrepreneurial activities (Global Entrepreneurship Research Association, 2013). Such findings suggest males in the GCC have generally higher rates of entrepreneurship and are more likely to own businesses which persist beyond the startup stage.
Women entrepreneurs face a number of obstacles which serve to depress female entrepreneurship rates. A study of female entrepreneurship in the region found that while networks of support have been successful in some countries such as Tunisia, Morocco, and Lebanon, such networks have been less successful in other Arab countries.
The study finds that “businesswomen networks are in their infancy and face several obstacles such as attracting funding, in the face of donor priorities for provision of microfinance, and growing the network” (Organization for Economic Cooperation and Development, 2009, p. 5). Nonetheless, networks that support female businesswomen, such as the Bahrain Businesswomen Society, Business and Professional Women – Kuwait, Omani Women’s Association, Dubai Business Women’s Council, and the Qatar Women Business Forum, have been quite active over the past few years promoting female participation in business with events and development programs (Organization for Economic Cooperation and Development, 2009). Support from such organizations may prove an effective strategy for encouraging more women to become entrepreneurs and to overcome cultural resistance to female entrepreneurship. Across the GCC, initiatives aimed at supporting women entrepreneurs are much more likely to take the form of professional associations or committees housed within chambers of commerce. Qatar and Saudi Arabia appear to be the only countries in the GCC with dedicated business centers and incubators that exclusively serve women (Organization for Economic Cooperation and Development, 2013).
Females in many GCC nations also face unique obstacles to obtain funding to start their businesses.
In addition to the lack of seed and venture funding that affects the majority of countries in the Arab region, research indicates that females in Qatar require guarantors in order to obtain business loans from banks. In Saudi Arabia, surveys and interviews with female entrepreneurs found that 82.2% of registered businesswomen rely on personal savings to fund their businesses and do not seek external funding (Ahmad, 2011). These female entrepreneurs also stated that they “believe that many social and regulatory interactions are more challenging for them because of their gender,” and, as a result, they relied substantially on male relatives to complete business transactions (p. 612).
In the UAE, a survey with entrepreneurs who had closed their businesses found that the majority of female entrepreneurs who closed their business did so because of personal reasons.
This contrasts sharply to males, the majority of whom stated that they closed their business because they were not profitable (El-Sokari et al., 2013). It is not clear from the report what personal reasons are causing women to close their businesses, but the report calls for more research to understand why women are more likely to discontinue their business for non-business related matters.
Low rates of female entrepreneurship should not be thought to imply that women are not interested in entrepreneurship.
According to interviews in Qatar, entrepreneurship is an appealing career choice for women because it allows them to have flexibility over their schedule and can often be pursued in addition to full-time public sector work. High levels of domestic staff employed in Gulf homes also means that women often have time for entrepreneurship. Interviews suggested that many female entrepreneurs in Qatar maintain their day job in the public sector while they pursue entrepreneurial endeavors to ensure a steady income and retain rights to a pension. However, it is not well understood what circumstances must be present in order for such entrepreneurs to make the step to pursue their entrepreneurial endeavors full time (Aradi et al., Forthcoming).
A recent survey of Gulf residents also found that women have many of the characteristics needed to be successful entrepreneurs, but they are less oriented towards entrepreneurship.
The survey found that women in GCC countries are generally as likely as men to report being optimistic, profit-oriented, and persistent (Bugshan, 2012) ). Nonetheless, women in GCC countries are significantly less likely to say that they have access to mentors who could offer advice about managing a business. Figure 13 shows that the gender gap is substantial in some countries, at 15% in the UAE and 19% in Bahrain. This study suggests that the needs of male and female entrepreneurs differ slightly, and one role for regional entrepreneurship initiatives is to link females with business networks and possible mentors.
Emerging Support Systems for Female Entrepreneurship
Many GCC nations have recently developed entrepreneurship education programs to develop young people’s interests and capabilities in entrepreneurship. Increasingly, these programs focus on women either explicitly or implicitly due to program design.
Although the UAE offers no specific programs that target the needs of female entrepreneurs, women entrepreneurship is being supported through the Sougha initiative which was founded by the Khalifa Fund for Enterprise Development “with the aim to create socio-economic opportunities for Emirati artisans and preserve the Emirati heritage by providing the needed support to achieve social good” (El-Sokari et al., 2013, p. 23). Because the focus of the program is handicrafts, participants tend to be women. Sougha has resulted in sales over $1 million and provided income to 148 Emirati families (El-Sokari et al., 2013). Similarly, in Saudi Arabia, the government “offers 3,000 Saudi Riyals a month for women to start new businesses” (Dubai Women Establishment, 2009, p. 40).
In 2006, Oman’s new Vision for Education was launched which included the specific objective of developing students’ entrepreneurial skills. One of the programs launched under the new vision, SANAD, was established to help “job seekers among citizens with opportunities to gain their living and to support self-employment projects and develop small businesses” (Ministry of Manpower, 2013). The program includes training on business skills and also allows would-be entrepreneurs to submit proposals for small start-up loans. As of 2010, the program had supported over 28,000 Omani youth with start-up funds and had provided at least 7,000 Omanis technical and vocational training (Ministry of Manpower, 2013).
However, no public data is available on the percentage of beneficiaries who are female.
Neither is there any data on whether the program has led to female firm creation and increased employment. Prior research in non-GCC Arab nations has found that entrepreneurship and labor market programs often tend to “lack the necessary mix of design features that make programs effective” (Angel-Urdinola, Semlali, & Brodmann, 2010, p. 1).
Despite widespread support for entrepreneurship training and assistance programs in the GCC, very little data on the participation or success of women has been collected. Programs such as SANAD offer crucial support for entrepreneurship, but, without an explicit engagement with women’s communities, it is likely that women are not fully benefiting from such initiatives.
As of now, SANAD does not offer any training programs specifically for females nor does it appear to track the number of women trainees, projects supported by women, or the percent of women beneficiaries.
The example of SANAD from Oman is indicative of a widespread issue across the region concerning the infrequent use of performance monitoring and evaluation of public sector training and active labor market programs. Across the region, more data should be disaggregated by gender and participants tracked over time to understand who is benefiting and how female entrepreneurs’ proposals and businesses fare compared to those of men. This level of data collection would allow policymakers to more effectively target trainings to the specific needs of women entrepreneurs.
Based on the scarcity of initiatives which specifically target aspiring female entrepreneurs, it appears that more entrepreneurship education and training for women is needed in the GCC.
While most GCC nations have supported entrepreneurship centers to improve the environment for entrepreneurship including providing funding and training, reducing bureaucracy, and establishing business incubators very few of these centers specifically cater to women’s needs. Moreover, without a critical presence of other women, females who desire to be entrepreneurs may not feel comfortable in such centers. There are few entrepreneurship centers specifically targeted to the distinct types of businesses women may found or designed to support their distinct needs. One example that is potentially replicable in the GCC is the Roudha Center in Qatar which is a business incubator specifically focused on training and enabling female entrepreneurs.
Due to the high number of females who exit the labor market in their thirties, one potential population segment for entrepreneurship training is college educated women who have exited the labor market after child birth and want to open a business to have flexibility in their working hours. Another area of focus may be female secondary school leavers and high school graduates who could benefit from entrepreneurship training to supplement their incomes.
Female students are also a potential training beneficiary group that is often overlooked.
According to interviews in Qatar, entrepreneurship training is rarely offered in K-12 schools due to lack of an approved curriculum. Rather than complementing existing curricula, females are exposed to entrepreneurship much later in their school or have to seek out such training at specialized institutions outside the formal education system (Aradi et al., Forthcoming). In the UAE, the Khalifa Fund for Enterprise Development has initiated two types of training programs in both government and private schools to “create a dynamic entrepreneurial culture”(Khalifa Fund for Enterprise Development, 2013). However, it is unclear how many students actually benefit and what the long-term outcomes of the program are.
Prior interviews suggest that, in GCC countries, entrepreneurship policies and educational policies are not necessarily aligned and are infrequently viewed as complimentary under national TVET policies.
For example, policy makers and institutional administrators in Qatar mentioned the need to integrate entrepreneurship more effectively into the education system from an early age. Study participants also pointed to a need for career guidance to accommodate entrepreneurship so that it might be possible for students to differentiate between choices after secondary schooling like starting a business, joining the armed forces, seeking a job immediately, attending a TVET program, or continuing their studies at the higher education level (Aradi et al., Forthcoming).
References
Ahmad, S. (2011). Businesswomen in the Kingdom of Saudi Arabia: Characteristic, Growth Patterns and Progression in a Regional Context. Equality, Diversity and Inclusion: An International Journal, 30(7), 610-614.
Angel-Urdinola, D., Semlali, A., & Brodmann, S. (2010). Non-Public Provision of Active Labor Market Programs in Arab-Mediterranean Countries: An Inventory of Youth Programs. Washington, DC: World Bank.
Aradi, W., Buckner, E., & Schwalje, W. (Forthcoming). Female Access to Technical Vocational Education and Training and Labor Market Outcomes in Qatar. Paris: United Nations Educational, Scientific and Cultural Organization.
Bugshan, F. (2012). Lack of Mentors May Hinder Women’s Entrepreneurship in GCC. Washington, DC: Gallup.
Chamlou, N. (2008). The Environment for Women’s Entrepreneurship in the Middle East and North Africa Region. Washington, DC: World Bank.
Dubai Women Establishment. (2009). Arab Women Leadership Outlook 2009-2011. Dubai: Dubai Women Establishment.
El-Sokari, H., Vanhorne, C., Zeng-Yuhuang, & Alawad, M. (2013). Entrepreneurship – An Emirati Perspective. Abu Dhabi: Zayed University.
Global Entrepreneurship Research Association. (2013). Global Entrepreneurship Monitor Key Indicators. Retrieved December 1, from Global Entrepreneurship Research Association http://www.gemconsortium.org/key-indicators
Khalifa Fund for Enterprise Development. (2013). Khalifa Fund in Schools. Retrieved November 27, 2013, from http://www.khalifafund.ae/En/BuildYoungEntrepreneurs/Pages/KhalifaFundinSchools.aspx
Ministry of Manpower. (2013). Sanad: An Overview. Retrieved November 27, 2013, from www.manpower.gov.om/en/sanad_home.asp
Organization for Economic Cooperation and Development. (2009). Implementation of the 2007 Declaration on Fostering Women’s Entrepreneurship in the MENA Region. Paris: Organization for Economic Cooperation and Development.
Organization for Economic Cooperation and Development. (2013). Directory of Initiatives Supporting Women Entrepreneurs in the Middle East and North Africa. Retrieved November 27, 2013, from http://www.oecd.org/mena/investment/menawbfdirectory.htm
