International Small Business Journal, 12(4), 14-27. 6 Spilling .... do not get access to the same financial capital (grants, debts or equity), the same knowledge,.
Entrepreneurship among women in Norway1 Gry Agnete Alsos and Lars Kolvereid
INTRODUCTION This paper summarizes knowledge about women entrepreneurs in Norway resulting from diverse Norwegian studies. One of the debates in this area deals with the number of women entrepreneurs. Is it true that there are relatively few women entrepreneurs in Norway? The paper
reviews the
number
of women entrepreneurs resulting
from Norwegian
entrepreneurship studies the last two decades. Further, it is asked: “Does it matter?” The various arguments used when debating efforts towards increasing the number of female entrepreneurs, are examined. Subsequently, possible reasons for the low prevalence rate among women in entrepreneurship are discussed in light of recent research. Finally, based on the literature review and the discussion herein, important policy implications are identified.
ARE THERE FEW WOMEN ENTREPRENEURS IN NORWAY? To answer this question we review some of the entrepreneurship studies carried out in Norway during the last two decades. In one of the first large studies carried out on entrepreneurs in Norway, Waagø (1979) 2 found 2% to be women and 98% men. In 1986 a group of international researchers, comprising the so-called Society for Associated Researchers on International Entrepreneurship (SARIE) collected data from 2278 entrepreneurs in 14 different countries. The percentage of Norwegian female respondents in the SARIE I data bank was 10%. Jenssen (1991) 3 speculated that this increase in female entrepreneurship “may be a result of the “female revolution”, but it is also likely that there has been an influence by a number of public incentives directed towards female entrepreneurs only” (1991: 94). However, the difference between the two studies may also be due to sampling, since Waagø’s study included only manufacturing firms.
1
Chapter 3 in Hauge & Havnes (eds.) Women Entrepreneurs: Theory, Research and Policy Implications, forthcoming. 2 Waagø, S. (1979): Start og utvikling av småforetak i Norge [Establishment and development of small businesses in Norway]. Trondheim: Norges Tekniske Høgskole, rapport nr. 24. 3 Jenssen, S.A. (1991): New venture formation and success. Factors influencing the supply and subsequent success of new ventures.
In 1990 the SARIE group obtained a new data set from 254 businesses started in 1986 and still operating at the time of the data collection. This data set, labeled SARIE II, contained 12.7% women and 87.3% men. SARIE II data from other countries also contained a relatively low proportion of women: In the UK 9.4%, in New Zealand 11.6%, and Poland 9.1% 4,
5
.
Based on data from the Norwegian 1990 census from Statistics of Norway, Spilling (2002) 6 reported a self-employment rate of 4.2% among women and 10.8 % among men, implying that women constituted 24.2% of the self-employed. In 1993, Bullvåg (1996) 7 collected data from 581 users of an entrepreneurial hot line. 8 His database contained 20.7% females. In 1996 a professional survey company (MMI) asked a sample of 10 000 Norwegians if they were now trying to start a business. Among the male population, 3.4% answered yes, while only 1.0% of the female population did. Hence, the proportion of women among the nascent entrepreneurs was 24%. The same question was asked in a similar study carried out by MMI in 1997. Then 4.6% of the men and 2.0% of women stated that they were trying to start a business, and a proportion of women among the nascent entrepreneurs of 34%. While the figures are small, they indicate an increase of entrepreneurship among women from 1996 to 1997 9. In the subsequent follow-up interviews carried out in 1997 and 1999 of those who stated that they tried to start a business in 1996, The proportion of women among those who actually started a business were 22.7% 10. Based on firm registrations in the VAT register from 1997-99, Spilling (2002) 11 found that 20.9% of the new businesses were started by women, or at least with women managers. In a recent survey of 1044 businesses registered in 2002, Isaksen and Kolvereid (2002) 12 reported that 23.5% of their respondents were women.
4
Shane, S. (2000): Prior knowledge and the discovery of entrepreneurial opportunities. Organization Science, 11(4): 448-469. 5 Kolvereid, L., and Obloj, K. (1994): Entrepreneurship in emerging versus mature economies. An exploratory study. International Small Business Journal, 12(4), 14-27. 6 Spilling, O. R. (2002): Kjønn, entreprenørskap og foretaksledelse I norsk næringsliv – en statistisk oversikt. In N.G. Berg and L. Foss, L., eds., Entreprenørskap: Kjønn, livsløp og sted, Oslo: Abstrakt, 83-108. 7 Bullvåg, E. (1996): Etablereren og etableringsprosessen. Doctoral dissertation, NTNU, Trondheim, Norway. 8 Grønn linje for etablerere, VINN, Narvik. 9 Kolvereid, L., and Alsos, G.A. (1997): Bedriftsetableringer i Norge. En undersøkelse om etableringsfrekvens og gründerklima. Nordland Research Institute, NF-arbeidsnotat nr. 1019/97. 10 Rotefoss, B. (2001): A resource-based approach to the business stat-up process. A londitudinal investigation. Doctoral dissertation, Henley Management Collage/Brunel University. 11 Spilling, O. R. (2002): op. cit. 12 Isaksen, E., and Kolvereid, L. (2002): Growth objectives in Norwegian baby businesses. Bodø Graduate School of Business, Working Paper Nr. 10/2002.
In 2000, Norway participated for the first time in the Global Entrepreneurship Monitor project. Among men, Norway ranked 6th on entrepreneurship of the 21 participating countries 13. Among women, Norway obtained the same rank. The score for both men and women was above the GEM average. In 2001 Norway ranked 16th in entrepreneurship among the 29 participating countries 14. Among men Norway ranked as number 15 and as number 17 among women. The proportion of female entrepreneurs was about 30%. 16 of the 29 countries had a higher percentage of females in their samples. In 2002 Norway ranked as number 14 in entrepreneurship among the 37 participating countries 15. Among men, Norway ranked as number 12 in entrepreneurship, while among women Norway ranked as number 17. In 2002 Norwegian men scored higher than the GEM average, while Norwegian women scored lower than the GEM average. From 2001 to 2002 entrepreneurship among men in Norway had increased, while entrepreneurship among women had decreased. The conclusion from the literature review concerning entrepreneurship among women in Norway is that the country has experienced a growth in female participation in entrepreneurship from 1979 until 2000. The data from Global Entrepreneurship Monitor, however, suggest that there has been a decrease of entrepreneurship among women in Norway during the last couple of years. Results from the GEM study also suggest that the proportion of women entrepreneurs is low in Norway compared to the other GEM countries 16.
DOES IT MATTER? The conclusion so far is that there are relatively few women entrepreneurs in Norway. The next questions that arise are: Does it matter? And furthermore: Why does it matter? In the public debate a variety of arguments for the aim to increase the number or proportion of women entrepreneurs are used. The rationalities behind the various efforts directed towards this aim are also diverse. As mention earlier, these efforts are usually linked to more general political aims, such as the population of rural areas or a competitive economy. In this respect women’s entrepreneurship is in many senses one means (among several) to contribute to these 13
Kolvereid, L., Bullvåg, E., and Oftedal, E. (2000): Global Entrepreneurship Monitor. Entreprenørskap i Norge 2000. Bodø Graduate School of Business. 14 Kolvereid, L., Bullvåg, E., and Oftedal, E. (2001): Global Entrepreneurship Monitor. Entreprenørskap i Norge 2001. Bodø Graduate School of Business. 15 Kolvereid, L., and Oftedal, E. (2002): Global Entrepreneurship Monitor. Entreprenørskap i Norge 2002. Bodø Graduate School of Business. 16 Verheul, I., and Thurik, A. R. (2003): Explaining the entrepreneurial activity rate of women: A macroeconomic view. Paper presented at the Babson-Kauffman Entrepreneurship Research Conference, Babson College, Wellesley, MA. 4-6 June.
aims, which particularly has been the case for the efforts related to rural policies (Lotherington, 2002). Other arguments or efforts may be related to equality issues or women’s positions. Billing and Alvesson (1989) 17 developed a framework of how to understand and categorize the major reasons and arguments for the interest in facilitation women’s opportunities for attaining managerial positions. They identified four perspectives and categorized them according to two axes or dimensions. The first axis relates two whether emphasis is put on similarity or dissimilarity between women and men, while the second relates to whether the focus is put on ethical/humanistic or efficiency concerns. Analogously, it can be argued that the various arguments for increasing the number of women entrepreneurs can be categorized according to similar dimensions: (1) emphasis on similarity or dissimilarity between women and men and (2) emphasis on humanistic concerns or on economic efficiency concerns. In this respect, economic concerns include wealth creation (pursued by profitable new businesses and efficient use of resources, including human resources) both at the national and at the regional level, while humanistic concerns include the interests of women as a group, such as access to (satisfying) job opportunities, distribution of wealth and power to influence society. A combination of broad division of the dimensions in two categories (similarity vs. dissimilarity and humanistic vs. economic concerns), gives us four types of arguments for supporting women entrepreneurs: 1) Similarity and humanistic concerns: Equal opportunity approach A view that women and men are primarily similar in the relevant aspects combined with a focus on women’s opportunities as basic motivation, generally lead to arguments that women should have the same opportunities to become entrepreneurs as men (and hence the financial gain, influence and/or interesting tasks associated with it). When women do not become entrepreneurs in the same extent as men, this is because they are discriminated against: They do not get access to the same financial capital (grants, debts or equity), the same knowledge, the same network contacts, etc. as men. This discrimination is not necessarily direct, but may also be indirect due to attitudes among lenders or advisors, or structural factors such as the fact that women own less inherited or earned financial capital. According to these arguments,
17
Billing, Y.D. and Alvesson, M. (1989): Four ways of looking at women and leadership. Scandinavian Management Journal, 5(1): 63-80.
efforts are needed to remove (or at least reduce) he discrimination and thereby support women entrepreneurs, so that women not are hindered if they want to start a new business. 2) Similarity and economic concerns: Women as resource The basic view that women and men are primarily similar combined with the focus at economic concerns, generally lead to arguments related to women as an (underutilized) resource. The Norwegian Industrial and Regional Development Fund give an example of this view when they argue for their efforts towards women: “SND supports women since women are an important resource for value creation. In a competitive market, businesses should utilize available competence among both sexes.” 18. When entrepreneurial abilities are seen as evenly distributed between the sexes, the low start-up rate among women is seen as a resource utilization problem. The society should utilize the entrepreneurial abilities among women to create an even more dynamic and competitive economy. In these types of arguments, men are usually the norm. Since they start new businesses more often, women should do that too. Efforts are needed to motivate more women to start new businesses, and to help them overcome eventual direct or indirect discrimination. 3) Dissimilarity and humanistic concerns: Entrepreneurship as an alternative When the view that women and men are primarily dissimilar is combined with a focus on women’s opportunities, arguments focusing on entrepreneurship as an (better) alternative for women are used. For example, it has been stated that women should start their own businesses to enjoy the successes and the value creation, and to get the opportunity to form their management role to fit their own lives 19. They also argue that women and men possess different entrepreneurial resources, and therefore different types of efforts are needed to support them. Others argue that entrepreneurship is an alternative career path for women, based on a view that women are less hierarchical oriented that men, and therefore not can utilize their full potential in organization hierarchies 20 (Schei, 1998). 4) Dissimilarity and profitability concerns: Women as a different resource
18
SND (1998): SND og kvinnesatsing. Aktiv bruk av kvinners ressurser i verdiskapingen [SND and women support. Active use of womens resourses in business life]. SND notat nr 3 – 1998. 19 Kvinneuniversitetet (2003): Start din egen business, igjen og igjen og igjen [Establish your own business, again and again and again]. Downloaded 31.07.2003 from www.kvinneuniversitetet.no. 20 Schei, B. (2003): Utvikling av innovative nettverk som strategi for samarbeid på vers av grenser – Norge en sinke? [Devlopment of innovative networks as an strategy for cross-co-operation –Norway a slow learner?] Innledningsforedrag til seminaret ”Entrepreneurship across borders”, 22. mai 2003, Fredrikstad.
When the focus is moved towards economic concerns, while still keeping the view that women and men are primarily different, the arguments tend to focus on women as a different resource. This different should be used to create diversity, which is seen as a benefit both to the single business and to the community. The Norwegian Industrial and Regional Development Fund (SND) state the purpose of their policy towards women: “Norwegian private sector needs diversity to increase profitability. SND wish to increase women’s share of and participation in the private sector. (…) The future for Norwegian private sector is competence. The challenge is to utilize women’s competence, education and abilities, as a valuable part of the totality. (…) An offensive effort towards women will strengthen the industry sector and increase profitability.” 21. The diversity argument implies that entrepreneurship among women is a value beyond that it creates new businesses (which men also can do), and the women stand for a different kind of entrepreneurship than men. The following argument is an example of this: “Women entrepreneurs organize themselves differently from men. They run their own separate businesses, but are often utilizing competence from others to complete particular tasks. To achieve entrepreneurship and innovation among women in Norway it is necessary to make conditions favourable for networks.”22. These four categories of arguments must of course not be seen as the only possible. The two dimensions that determine the categories are continua: The similarity or dissimilarity between the sexes can be more or less stressed, and humanistic and economic concerns can be mixed 23 . In the public debate, the arguments are often mixed. However, in our opinion it may be useful to sort the arguments out along these dimensions, to tidy the debate. Mixing the arguments, representing different views and goals, confuses the discussion and, among other things, makes it hard to agree upon means.
21
SND (2003): Hensikt. Kvinner i næringslivet [Intentions. Women in business life]. Downloaded from www.snd.no 02.07.2003. 22 Schei, B. (2003): Utvikling av innovative nettverk som strategi for samarbeid på vers av grenser – Norge en sinke? Devlopment of innovative networks as an strategy for cross-co-operation –Norway a slow learner?] Innledningsforedrag til seminaret ”Entrepreneurship across borders”, 22. mai 2003, Fredrikstad. 23 Billing, Y.D. and Alvesson, M. (1989): Four ways of looking at women and leadership. Scandinavian Management Journal, 5(1): 63-80.
POSSIBLE EXPLANATIONS In early 20th century it was viewed as natural for men to immerse themselves in business and commerce, whereas it for women was natural to be concerned with domestic pursuits 24 . Since then, there have been tremendous changes when it comes to women’s participation on the labour market, as well as in the general norms for men’s and women’s pursuits. Equal opportunity policies have been an important part of the politics in the Nordic countries the last two or three decades, and we like to believe we are in the very forefront when it comes equality questions. Nevertheless, entrepreneurship is still a male dominated activity both when it comes to general norms and actual deeds in these countries. Moreover, while studies from for instance US and UK show a large increase in the number of women starting new businesses, a similar growth does not seem to be the case in Scandinavia, at least not to the same extent. Since the 1980s, a diversity of public efforts has been put forward to support entrepreneurship among women in Norway. Most of these have been a part of the regional policies. The aim has been to create jobs for women in rural areas, which again is seen as important to keep the population of the rural areas at the desired level. Other efforts have been related to industrial policy and thereby to the general objective of contributing to a competitive economy. While related to these more general policies and aims, the efforts are still rooted in an observed difference between women and men: Fewer women than men start new businesses. The first three possible explanations for the relative low proportion of women entrepreneurs in Norway are found in the MOS model, developed by Stevenson (1996) 25. This model suggests that entrepreneurship is determined by three factors: motivation, opportunity and skills 26, 27. Proposition 1: Women lack motivation to start businesses. In rich West European countries, entrepreneurs start businesses to pursue opportunities, rather than out of necessity. There is virtually no necessity entrepreneurship in the Scandinavian
24
Korabik, K. (1999): I Sex and gender in the new millennium. In G.N. Powell, ed., Handbook of gender & work, Thousand Oaks, CA, Sage, 3-16. 25 Stevenson, L. (1996): The Implementation of an Entrepreneurship Development Strategy in Canada: The Case of the Atlantic Region, ACOA/OECD, Paris, 1996. 26 Stevenson, L. (1996): Op. cit. 27 Lundström, A., and Stevenson, L, (2002): On the Road to Entrepreneurship Policy, FSF, Stockholm 2002.
countries 28. This can be an effect of the highly developed social security systems found in these countries. While it may be possible to increase necessity entrepreneurship in these countries by cutting social security benefits, a more realistic policy is to increase the proportion of women who prefer an entrepreneurial career to a career in existing organizations. In 1996 30.4% of the adult male population in Norway stated that they preferred being self-employed rather then employed somewhere. The same figure for women was 18.7% 29 (Kolvereid andOlsen , 1996). In a similar study in 1997 the numbers were 35.1% for men and 21.3% for women. Rotefoss et al. (1996) 30, investigated employment status preferences among employed and self-employed people. Among those who were employed, 16% of women and 27.8% of men stated that they would have preferred to be self-employed. Among those who were self-employed, 77.9% of women and 72.4% of men reported that they preferred to be so rather than employed by someone. The conclusion from the above numbers is that fewer women than men want to become self-employed. Hence, women are probably less interested in pursuing an entrepreneurial career than men, which is one important explanation for the low proportion of women entrepreneurs. However, this is not the full explanation. A closer look at the numbers shows that among those who reported that they prefer to be self-employed rather than employed about 40% are women 31. This is a significantly higher proportion than the about 25% women entrepreneurs. Proposition 2: Women do not see opportunities. When asked if they have a business idea that can be used to start a business, 39.0% of men said yes, compared to 26.7% of women 32. An explanation may be that men, who are more interested in an entrepreneurial career than women, are more alert to opportunities than women. Shane (2000) 33 showed that entrepreneurs discover opportunities related to the information that they already possess. Differences in prior knowledge between women and men, resulting from the gender segregated labour market and gender differences in education, 28
Reynolds, P.D., Bygrave, W.D., Autio, E. and Hay, M. (2002): GEM Global 2002. Babson College, Kauffman Foundation and London Business School. 29 Kolvereid, L., and Olsen, B. (1996): Past, present and potential self employment in Norway. Paper presented at the 9th Nordic Conference on Small Business Research, Lillehammer, Norway 29-31 May. 30 Rotefoss, B., Kolvereid, L., and Olsen, B. (1996): Employment status preferences among employed and selfemployed. Paper presented at the 6th Global Entrepreneurship Research Conference, London, UK, July 11-13. 31 Alsos, G. A.. and Ljunggren, E. (2002): Betydningen av kjønn i etableringsprosessen. In N.G. Berg, and L. Foss, L., eds., Entreprenørskap: Kjønn, livsløp og sted, Oslo: Abstrakt, 109-123. 32 Kolvereid, L., Bullvåg, E., and Oftedal, E. (2000): Global Entrepreneurship Monitor. Entreprenørskap i Norge 2000. Bodø Graduate School of Business. 33 Shane, S. (2000): Prior knowledge and the discovery of entrepreneurial opportunities. Organization Science, 11(4): 448-469.
may therefore give different access to information about business opportunities. Many women’s education for and experience from the public sector, may not give access to as many business opportunities as education for and experience from the private sector, which men generally have more of. Proposition 3: Women lack the competence and skills required. When asked if they had the necessary competence and skills required to start a business, 53.2% of men answered yes, compared to 33.9% of women 34. However, whether this reflects differences in actual competence or in the judgment of own competence is unclear. Alsos and Ljunggren (1998) 35 investigated if women are less successful in starting new businesses because they lack the necessary competence and skills and therefore do not do the right things in the start-up process? Investigating nascent entrepreneurs, they found few differences in what women and men actually do when trying to start a business. Thus, women in this study did not seem to suffer from inferior competence. Ljunggren and Kolvereid (1996) 36 found that women entrepreneurs perceived to have higher behavioural control and higher internal drive than their male counterparts. This finding suggests that women go through a more thorough self-screening process prior to entering a business formation process. Women appear to place more requirements on themselves than men. There is reason to ask whether these requirements are excessive, or just more realistic than those of men entrepreneurs. The Norwegian labour market is strongly gender segregated, and women and men take different types of education. As a result, their competence differs. Some types of education and work experience may give better access to knowledge, which is useful when starting a business. This gender segregation may therefore be an important explanation for the few women entrepreneurs. Women have shorter experience from the private sector, and less management experience than men. The fact that there have been a low proportion of women also in the past has as consequence that women more seldom have entrepreneurial experience
34
Kolvereid, L., Bullvåg, E., and Oftedal, E. (2000): Global Entrepreneurship Monitor. Entreprenørskap i Norge 2000 [Entrepreneurship in Norway]. Bodø Graduate School of Business. 35 Alsos, G.A., and Ljunggren, E. (1998): Does the Business Start-up Differ by Gender? – A Longitudinal Study of Nascent Entrepreneurs. Journal of Enterprising Culture, 6 (4): 347-367 36 Ljunggren, E., and Kolvereid, L (1996): New business formation: Does gender make a difference? Women in Management Review, 11(4): 3-12.
than men. This type of experience is related both to entrepreneurial intentions and start-up preparation and actual start-ups 37. Building upon the work of Katz (1990)38 and Learned (1992) 39, Rotefoss (2001) 40 presented a model of the start-up process containing milestones or “hurdles” that the entrepreneur must jump in order to successfully start a business: Reaching the aspiring milestone represents an intention to found a business (representing the M in the MOS model), reaching the preparing milestone indicates an attempt to start a business, and reaching the entering milestone implies success in establishing the business. One possible explanation of the low rate of women business/owners is therefore that women drop out during the start up process, and that they have higher failure rates than their male counterparts. Proposition 4: Among those who are interested in an entrepreneurial career, fewer women than men actually try to start a business. Kolvereid and Olsen (1996) 41 reported that 24% of men and 16.5% of women preferred to be self-employed without being so. Moreover, 14.6% of men and 7.5% of women were found to be moving into self-employment by starting a business. The ratio for the proportion of people moving into self-employment to the proportion of people who prefer to be self-employed but are not, was 61 for men and 45 for women. Hence, a higher percentage of women than men do nothing for realizing their desire to become self-employed. Alsos and Ljunggren (2002) 42 reported that the proportion of women was 40 % among those who had start-up intentions, and 25 % among those who actively tried to start a business. Hence, among those who want to become entrepreneurs, fewer women than men go from words to deeds and actually start a business Proposition 5: Among those who try to start a business, fewer women than men actually succeed in doing so. 37
Ljunggren, E. (1998): The new business formation process: Why are there so few women entrepreneurs in Norway? Licentiate-thesis. FE-publikationer 1998: 159. Handelhögskolan vid Umeå Universitet, Umeå. 38 Katz, J.A. (1990): Longitudinal analysis of self-employment follow-trough. Entrepreneurship & Regional Development, 13(3), 429-441. 39 Learned, K.E. (1992): What happened before the organization? A model of organizational formation. Entrepreneurship Theory and Practice, 17(1), 91-95. 40 Rotefoss, B. (2001): A resource-based approach to the business stat-up process. A londitudinal investigation. Doctoral dissertation, Henley Management Collage/Brunel University. 41 Kolvereid, L., and Olsen, B. (1996): Past, present and potential self employment in Norway. Paper presented at the 9th Nordic Conference on Small Business Research, Lillehammer, Norway 29-31 May. 42 Alsos, G. A.. and Ljunggren, E. (2002): Betydningen av kjønn i etableringsprosessen. In N.G. Berg, and L. Foss, L., eds., Entreprenørskap: Kjønn, livsløp og sted, Oslo: Abstrakt, 109-123.
Bullvåg (1996) 43 tested this hypothesis, and rejected it. The hypothesis was also tested by Alsos & Ljunggren (1998) 44 and Rotefoss (2001) 45, with the same result. Women who try to start businesses have equal chances to actually start a business as their male counterparts. Alsos & Ljunggren (1998) 46 reported that among persons identified as trying to start a new business in 1996, 46 % had started a business, 29 % had given up the effort, and 25 % were still trying to start a business one year later. These proportions were close to identical for women and men. In a continuation of this study, Alsos, Ljunggren and Rotefoss (2000) 47 found that 72.7 % of the women and 72.3 % of the men had succeeded in setting up a business three years after the first contact in 1996. Proposition 6: Women entrepreneurs have high failure rates. Some studies have found that businesses run by women are less growth oriented. Concerning the relationship between gender of the owner/manager and profitability the findings are mixed. Some studies have found that businesses with female owner/managers are less profitable than businesses run by men. Others have failed to find such differences. While growth is desirable in many cases, business growth is associated with risk and increased failure rates. This may explain why Norwegian businesses run by women have lower risk of going bankrupt than businesses run by men 48. Two final possible explanations suggested here, is that women entrepreneurs are discriminated when seeking financial support and that entrepreneurship among women is not much appreciated in the society. Proposition7: Women do not have access to the financial capital needed to set up a business.. New businesses are often financed from a combination of equity capital and debts, and possibly also grants from public support schemes. As a means to support entrepreneurship among women, women entrepreneurs are given some priority to start-up grants from SND (The Norwegian Industrial and Rural Development Fund). This better women’s access to 43
Bullvåg, E. (1996): Etablereren og etableringsprosessen. Doctoral dissertation, NTNU, Trondheim, Norway. Alsos, G.A., and Ljunggren, E. (1998): Does the Business Start-up Differ by Gender? – A Longitudinal Study of Nascent Entrepreneurs. Journal of Enterprising Culture, 6 (4): 347-367 45 Rotefoss, B. (2001): A resource-based approach to the business stat-up process. A londitudinal investigation. Doctoral dissertation, Henley Management Collage/Brunel University. 46 Alsos, G.A., and Ljunggren, E. (1998): op. Cit. 47 Alsos, G. A., Ljunggren, E., and Rotefoss, B. (2000): Who makes it through the business formation process? A longitudinal study. Babson Kauffman Conference of Entrepreneurship Research, Boston, 8-10 juni. 48 nord.no. (2003): Kvinner går sjeldnere konkurs. Downloaded 07.03.2003 from http://www.nord.no. 44
financial capital to some extent, and have raised the proportion of women getting start-up grant to close to 40 %49. However, these grants are only given to start-up projects with low capital requirements. Women’s proportion of support from schemes directed towards larger projects is less than 10 %. Further, SND do generally not support service industry start-ups or start-ups based on a local market, which are types of start-ups, were women are over represented. There is no evidence for direct discrimination against women business starters when it comes to debt financing. However, in a study of the staff of public support agencies, Alsos, Ljunggren and Pettersen (2002) 50 found that they assumed that women entrepreneurs start smaller businesses, need less financial capital, exploit poorer venture ideas and are less competent than men. There may also be differences in access to debt financing as a result of structural conditions such as the differences in types of businesses started between men and women. Women’s overrepresentation in service industries may make it harder to get debt financing, since they have fewer assets to mortgage. The wealth is unevenly distributed between women and men in Norway51, which generally implies that men may have better access to equity than women. Access to equity also increases the ability to get debt financing. This implies that women generally may have less access to private financial capital than men.
49
Pettersen, L.T., Alsos, G.A., Anvik, C.H., Gjertsen, A. and Ljunggren, E. (1999): Blir det arbeidsplasser av dette da, jenter? Evaluering av kvinnesatsingen i distriktspolitikken. NF-report no 13/99, Nordland Research Institute, Bodø. 50 Alsos, G. A., Ljunggren, E., and Pettersen, L. T. (2002): Kvinners entreprenørskap – med offentlig pådriv? In N.G. Berg and L. Foss, eds., Entreprenørskap: Kjønn, livsløp og sted, Oslo: Abstrakt, 244-264. 51 http://www.ssb.no/emner/05/01/selvangivelse/tab-2003-01-30-03.html
Proposition 8: Entrepreneurship among women is not appreciated in the Norwegian society. Ljunggren and Kolvereid (1996) 52 found that female entrepreneurs perceived stronger social support than their male counterparts. Based on a representative sample of the Norwegian population, Kolvereid and Alsos (1997) 53 found that women and men perceived the entrepreneurial climate quite similar. Among the 37 GEM2002 countries Norway rank as 3rd with regard to entrepreneurial framework conditions for women entrepreneurs. This score is based on the expert views of the conditions. In this respect, entrepreneurship among women seems quite much appreciated in Norway. However, taking an institutional perspective, one could argue that the gender segregated labour market in Norway as well as the tradition of entrepreneurship as a male dominated career path, contributes to making entrepreneurship institutionalised or constructed as a masculine phenomenon 54. It is still more “normal” for a man to engage himself in entrepreneurial activities than for a woman. Ahl (2002) 55 showed how even researcher studying gender aspects of entrepreneurship constructs this in a masculine way. Ljunggren and Alsos (2001) 56 showed how media describes entrepreneurship as a masculine phenomenon. Such socially constructed “truths” are persistent, and it takes a long time to change them. This may be one reason for women not preferring entrepreneurial career to the same extent as men.
PRACTICAL IMPLICATIONS Of the 8 propositions presented, there is empirical support for the first four only. There is no evidence to support the last four. This suggest that we need policy measures that can enhance motivation for entrepreneurship among women in Norway, that can enhance their skills and ability to identify opportunities, and that can trigger entrepreneurial attempts among women that are interested in an entrepreneurial career. 52
Ljunggren, E., and Kolvereid, L (1996): New business formation: Does gender make a difference? Women in Management Review, 11(4): 3-12. 53 Kolvereid, L., and Alsos, G.A. (1997): Bedriftsetableringer i Norge. En undersøkelse om etableringsfrekvens og gründerklima. Nordland Research Institute, NF-arbeidsnotat nr. 1019/97. 54 Ljunggren, E. (1998): The new business formation process: Why are there so few women entrepreneurs in Norway? Licentiate-thesis. FE-publikationer 1998: 159. Handelhögskolan vid Umeå Universitet, Umeå. 55 Ahl, H.J. (2002): The making of the female entrepreneur. A discourse analysis of research texts on women’s entrepreneurship. Doctoral dissertation. JIBS Dissertation series no. 015. Jönköping International Business School, Jönköping, Sweden. 56 Ljunggren E. and Alsos, G. A. (2001): Media expressions of male and female entrepreneurs. Paper presented at the Babson-Kauffman Entrepreneurship Research Conference, June 2001, Jönköping, Sweden.
Increase the desire to become self-employed among women Norway has a very good social security system for employees. However, this is not the case for entrepreneurs. Many benefits that are available to employees are unavailable to people who are self-employed. These include salary during absence from work, paid pregnancy leave, and unemployment benefits. Policy makes should consider making some of these benefits available to people who pursue entrepreneurial careers. 57 They should also be aware of the possibility that social security benefits available to employees only, may reduce entrepreneurial initiatives. This may particularly be true for women, who are generally more dependent upon paid pregnancy leave and sickness allowance than men. Another way to affect women’s desire to become self-employed is related to the masculine construction of entrepreneurship. Persistent work for a long time period with bringing forward role models, presentation of entrepreneurs in media, etc. is needed to influence the social construction.
Improved education in entrepreneurship While entrepreneurship often is a part of the curriculum for studies dominated by men, such as business- and engineering, this is not the case for studies that attract many women, e.g. nursing, child and health care. Entrepreneurship among women may be enhanced if one is able to achieve a less gender dependent choice of education. Also, teaching entrepreneurship as part of the curriculum on women dominated studies may increase entrepreneurship among women.
Mechanisms that can trigger business start-up attempts among women Shapero and Sokol (1982) 58 mention several different factors that can trigger entrepreneurial action. According to them, negative displacements are often antecedents of entrepreneurship. Such displacements can be either externally imposed (e.g. when moving from one place to another), job related (e.g. being fired, demoted or promoted), or internal to the entrepreneur (e.g. “traumatic birthdays”). The state of being out of place or between things can also trigger entrepreneurial action. One is more likely to start a business upon discharge from military service, on completion of studies, or upon completion of a project. The last type of triggering mechanism that Shapero and Solol (1982) 59 refer to is positive pull, for example the offer of 57
The new proposal from the government that self-employed should receive the same benefits as employees in organizations with regard to paid pregnancy leave, is thus a step in the right direction. 58 Shapero, A, and Sokol, L. (1982): The social dimensions of entrepreneurship. In C. Kent, D. Sexton, and K. Wesper, eds., Encyclopedia of entrepreneurship, pp. 72-90. Englewood Cliffs, N.J.: Prentice Hall. 59 Shapero, A, and Sokol, L. (1982): cit. op.
financial support, a contact of a would-be customer, or an offer of partnership from a friend, colleague or even a customer. While Shapero and Sokol (1982) 60 argue that dramatic negative displacements are most effective trigger for entrepreneurial action, policy makers are probably best advised to focus on positive pulls aimed at women who have a desire for an entrepreneurial career. Such initiatives could include the identification and diffusion of interesting venture ideas, helping to put entrepreneurial teams together, and help to find customers in the government sector.
60
Shapero, A, and Sokol, L. (1982): cit. op.
