Innovation’s Inequality: How we view Women Entrepreneurs

The same entrepreneur might be described as young, promising, aggressive and sensible – or inexperienced, ill-tempered and not daring enough. A recent Swedish study has shown that female entrepreneurs are judged more harshly than their male colleagues, and that negative perceptions of a women at the helm leads to a negative perception of the business she’s steering. Ultimately, this means less financing for women-run businesses – a disparity that hinders not only the female entrepreneurs themselves, but also innovation and the growth of our society.

Let’s start by getting the background info straight: government venture capital is an important engine to drive innovation and growth, and one of the main financial sources for entrepreneurs. Venture capitalists can take bigger financial risks than banks, and therefore have the possibility to back entrepreneurs working in uncertain fields. Their support is vital for new ideas that could potentially be real game-changers.

A third of Swedish businesses are owned and run by women. However, they receive significantly less funding than male-run businesses – only between 13 and 18 % of the total government funding. A Swedish research group whose initial task was to study financial decision-making in the government venture capitalist (VC) groups, not to look at gender discourse, was surprised by how gender biased their data was.

The research group was listening in on closed-room discussions regarding applications for financial support from 125 entrepreneurs – 99 men and 26 women. They registered phrases used to describe the entrepreneurs, comments on the applicants’ looks, and the way the discussion evolved around each applicant.

What is the difference between inexperienced and promising? Or how about sensible and level-headed? Well, a person can be both at the same time, it’s all a question of how we describe – or perceive – things. A young entrepreneur might be both inexperienced and promising. But, if only one of those words is used, the image of the entrepreneur will become black or white. Positive or negative – promising or inexperienced?

When communicating, it is all a question of how we put things. The same message can be delivered in a thousand different ways. Depending on how we chose our words, we affect not only those we talk to, but also our own mindset. If you never talk about young women in the same terms that are used to describe entrepreneurs, you create a mental gap between the two that becomes hard to bridge.

The Swedish researcher group noticed that the venture capitalists questioned the female entrepreneurs’ credibility, experience and knowledge. When discussing the male applicants, they instead used stereotypical assumptions that fit into the traditional image of an entrepreneur. Some of the men were considered aggressive or arrogant, but in their case, these weren’t seen as negative traits. On the other hand, the more enthusiastic and excited women triggered discussions about eventual emotional weaknesses.

So what happened to the entrepreneurs who were included in the study? Well, 53% of the women had their application dismissed, compared to 38% of the men. Of the women who were actually rewarded financial aid, they received only 25% of what they asked for, compared to an average of 52% received by the male entrepreneurs. In short, this is a story that ends with a very tangible loss not only for female entrepreneurs, but for society at large.

Have a think about how we affect the future of girls and boys around us by the way we communicate, and how you might be participating in preserving old stereotypes about men and women, entrepreneurs or otherwise. How could we all work to broaden the traditional image of an entrepreneur?

Being a Woman and an Entrepreneur in Malawi

By Mayamiko Chiwaya, Student Driven Solutions graduate, age 16

Starting a business in Malawi is not an easy thing. Most people think that once you come up with a business idea you can implement it right away, which is not always true. To start a business requires hard work and dedication. In this edition, I will share with you the challenges women and girls encounter while striving to start small businesses in Malawi.

According to my investigations, the first challenge that women and girls in Malawi often meet is lack of recognition. Women and girls are not recognized as people who can develop Malawi as a country through business. It’s for this reason that they often fail to start small businesses because they are not given the chance. For example, in most banks in Malawi, women are given smaller loans than men.

Pamela Banda, age 18, a successful young lady operating a shop selling fashion items once experienced this challenge when getting a loan from the bank, but still managed to get a small loan from her mother’s bank to launch her business. She shares her story:

“At first people underestimated me because of my age. People thought that at my age I couldn’t run a business because most of the time, people my age have not completed secondary school in Malawi. Apart from being underestimated, I also met different discouragements. I received negative comments from people. They said business was for uneducated people. They said educated people work in offices and other institutions while uneducated people have to do business since they do not have the capability to work. As for me, I did not believe it because nowadays in Malawi things have changed and the economy is not normal so one needs to work and do at least a small business in order to live a decent life.”

Pamela started her business because she saw that her parents had a big responsibility in taking care of all the children. They weren’t able to help everyone so she decided to start the business to support herself. She makes profits and is able to support herself through college. Her parents pay school fees and the business supports her with pocket money. She was even able to buy a laptop using the profits!

Agness Ngozo, age 30, operates a butchery business and said she also encountered the same problems that Pamela described:

“I faced a lot of discouragement from different people, including my own husband. They said to own a butchery was a masculine business not feminine so I had to stand firm to the idea and now I own several butcheries.”

Agness started her business because she didn’t want to be a housewife with nothing to contribute. She hated always asking her husband for money and it caused them to fight. She got a loan to start her business two years ago and has managed to expand the business to new areas. She says, “I have many customers and people love to buy from me because I sell quality meat.” She is able to take care of her family and pay her children’s school fees.

It seems the discouragements most women face when they want to start a business come from their husbands and friends. Mostly people do this out of jealousy since they think they can’t do it themselves.

When I asked Pamela how she managed to overcome her challenges, she said:

“I put God first in everything. I know that I may have the knowledge, a good attitude and a hardworking spirit to do business but if I don’t put God first God will not reward me. Apart from putting God first, I also have confidence in me. I believed in myself and I believed I could do it no matter what. I also challenged the people who discouraged me from starting a business. The more I challenged them, the more I took control and their discouragements over me diminished.

“I would like to encourage my fellow girls who are fighting hard to start businesses that they should have self-confidence because confidence makes us win before we have started. I also had some goals, which guided my decisions and actions so whatever I was doing was in line with my goals. If I had not set goals, I could have been easily moved by what people were saying.

“Lastly I learned through my past experiences, which helped me make better decisions. I know that the good decisions I’ve made in my life have come from learning from errors, mistakes and pains. If I had not failed, I could not have learned and I could not have become a person who makes good decisions today. It was through all of this that I managed to overcome the challenges I faced during the start of my business.”

At such a young age, Pamela did not allow age to be the barrier for her to start a business as she knew that age doesn’t matter, but what matters is how you age.

 

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About the Author, Mayamiko Chiwaya:
I am 16 years old. My ambition is to become a successful entrepreneur in Malawi. I am passionate about writing, designing, and baking. I like to play football and read novels. My favorite quote is, “Age doesn’t matter but how you age matters.” I was raised in a family of two by a single mum who is a nurse. I am a graduate of Student Driven Solutions and am now running a business.

Student Driven Solutions has launched a crowdfunding campaign to support their work: “Please consider making a donation as little as $1 and as big as infinity! All donations help support girls like Mayamiko start businesses to jumpstart their future.”