Discussion:
Factor Driven Country: Vanuatu
Vanuatu comprises a Y shaped chain of 83 islands in the South Pacific, stretching 1176 km in a north-south direction between the Equator and the Tropic of Capricorn. The UN classifies Vanuatu as a Least Developed Country. The major industries are Fishing, Offshore Financial Services and Tourism. The country is ranked 60 among the 181 countries in the World Bank’s Doing Business Report, 2009. The country is classified as factor driven economic group meaning the key development focus is on subsistence, agriculture, extraction of natural resources, creating regional scale – intensive agglomerations.
The GEM 2010 Report on this country was included and the report states that in Vanuatu, perceived opportunities as 73.6 percent, perceived capabilities 73.6 percent. According to this report the Total Entrepreneurial Activity (TEA) ratio is 52.2 percent. This shows highest rate of entrepreneurship with over half of its people engaged in starting or already running new business
The challenges in doing business in this country are: remoteness and isolation resulting in high transport cost; limited exposure to global markets and trade regimes; susceptible to natural disaster; limited diversification due to small domestic marks; limited capacity in the public and private sector.
A largely patriarchal society, women participation rate is low. The laws in this country continue to discriminate against women, including laws on matrimonial property, inheritance and citizenship. Domestic violence is a serious problem. Less participation of women in tertiary education, laws discriminating women still remain in the statute books. Women are generally involved in cooperatives business. Accessing finance is a constraint to them. They find it difficulty to enforce contracts. Starting a business is generally costly, time consuming and the fee schedule imposed on women is too expensive. They lack access to markets and value additions, trade and brands/ certifications. Lack of understanding of basic business and financial management skill and procedures limits the success of many women’s business. Credit referral system is absent and hence loan repayment histories are not easily accessible/transferable, and no role models. Women in business are not organized.
Men have cultural dominance in Vanuatu society. Women leadership is less public, they influence decision making more at home. Main barriers of business development raised by women at Vanuatu are:
● Women need more affordable training and advice to succeed in business, in advocacy, bargaining, stock control, financial management and investment services, HR, product development, servicing markets (international and domestic) and legal knowledge about business rights ands tart up requirements.
● Women rarely ask for help and feel they should take back seat to man.
● Women noted that often the business license fees and other start up requirements to formalize a business are out of reach; government department are not friendly to women.
● Women seek networking and associations friendly to them.
● Lack of education and illiteracy are problems among the staff and human resources,
● Men feel emasculated when women are assertive,
● Banks deny credit to women and charge high rate of interest,
● Need for improved access to markets and product development ,
● Lack of infrastructure, long wait for telephone connection, irregular water supply and electricity add to the wow,
Efficiency Driven – Malaysia and China
Malaysia is a culturally diverse economy with a long history of immigrant entrepreneurs. In 2006 Malaysia was classified as middle income group by GEM 2006. About 90 percent of the early stage entrepreneurs were driven by opportunity. In GEM report 2009 it was reported that fear of failure seemed to be holding back exactly those people who see most opportunities for starting a business. The gender gap in entrepreneurship activity is very low. Entrepreneurs were most positive and saw opportunity in this occupation. The Gem Report 2010 states the TEA ratio was low and this country has highest fear of failure and these perceived risks of starting a business deter some individuals. It has the lowest level of perception about entrepreneurship as a career. The report also states that Malaysia has a very high relative level of female participation, with almost equal number of women and men entrepreneurs and higher average established business levels.
China in 1978 through their economic liberalization allowed many women to start their own business. According to Chinese Association of Women Entrepreneurs 1 in 5 Chinese’s entrepreneurs were women in 2002; 80 percent of those established after 1995. The women owned firms were active in manufacturing, wholesale, retailing and social services. A study of Lawson, Heacock and Stupystska (2007) found that Chinese women largely scored well against BRIC peers, outstripped them is labor participation and political representation but lagging in tertiary education. According to China embassy statistics 20 percent of the entrepreneurs are women. Women entrepreneurs have clear vision; sheer determination and perseverance, a sense of aggressiveness and decision making competence, political shrewdness, strong family support an extensive personal network. Access to funds and internet is also a limitation for women entrepreneurs. (Zhang and Alon 2010).
Under the 1982 constitution of People’s Republic of China women have the right to work outside the home and are supposed to have equal pay with men for equal work. They can inherit property, stand for political office and have equal access for education. Most women enter the business for the same reasons as men, as the reward is in gaining control over their own working lives. It is very difficult to try and works out how many women are purely self-employed and how many actually employ others. It is even difficult to estimate how many businesses are owned by women because often, when asked by a non-family member, they will say a firm is their husbands or is a family firm even when they have provided the whole capital and are running it themselves. The All China Women’s Federation lists the Top Fifty Businesswomen each year and women regularly appear in the Top 100 CEO listings. A recent survey of 1.5 million enterprises run by women in 2000 showed that 90% of them were in manufacturing and service industries and the failure rate was only 1.2%. By 2002 women made up 20% of entrepreneurs in China. The problems cited are lack of qualified staff, government regulation, lack of access to technology, problems in dealing with foreign alliances and lack of access to capital. (Kitching, Beverley and Woldie, Altese (2004). Many Chinese women remain tied to men and depend upon their support for their entrepreneurial venture, for personal capital. Cooke, (2005) highlights a major barrier for women entrepreneurs is that if the interact too closely with male contact in their guanxi network there may be “rumors which can be highly damaging to their career because of the relatively low tolerance by Chinese society of close relationships between men and women outside marriage”. This is being transformed due to the emergence of highly educated new generation of entrepreneurs. The other barrier is that women career is considered as secondary to their husbands and the ‘glass ceiling’ or bamboo curtain’ may be a significant barrier. (Sandra & Marilyn 2010)
The GEM 2002 report included China in its study; up to 7 percent was pursuing necessity entrepreneurship, though financial support, education, training and physical infrastructure was clearly absent. China being a developing country the participation of women is almost equal to men. As per the 2003 GEM report China is classified as the second most active in entrepreneurship. In 2004 GEM study China did not participate. In GEM 2005 established business owners prevalence rate is 13.5 percent. China was clustered as middle income, high growth country. The ratio of early stage opportunity to early stage necessity was 1.2. In 2006 this country was classified as middle income country. In 2007 China was included in the study and categorized as middle and low income countries. Entrepreneurship by young adults in this country appears to be much higher. This country was identified as a hotbed of high growth expectation entrepreneurship, considered to have the healthiest entrepreneurial anatomies. China nascent new entrepreneurs appear to be the most growth oriented, with more than 10 percent of them anticipating high growth. The proportion of innovative entrepreneurship is considerable low in this country compared to other GEM countries. In 2009 GEM report China was classified as Efficiency driven country. The man women ratio indulging in entrepreneurial activity is 21:16 indicating that the gender gap is low. According to GEM Report 2010 China has high rate of entrepreneurship (14.4 percent) yet compared to 2009 there is a moderate decline. This report states that China exhibits lower international orientation in the perceived opportunities to start business.
Innovation Driven – Australia, Japan, and Republic of Korea
Australia was included for study in the GEM Report in the year 2000. The most critical issues impeding entrepreneurship in this country are education and training, cultural and social norms and government policy. The percentage of women engaged in entrepreneurship activity then was 54 percent than that of men – among the five highest ranking GEM 2000 countries. Australia lacks positive entrepreneurial role models and low tolerance of failure and high regulatory compliances. The key issues suggested as per GEM 2000 report are: the country must rebalance the focus of education away from training good employees for corporate employment and toward creating greater awareness of the entrepreneurs career option and developing the requisite skills. There needs to be a further reduction of regulatory and tax burden combined with incentives to encourage early stage investment. As per the GEM 2002 report the entrepreneurial activity was substantially higher compared to developed Asian countries and European countries. The change from the previous year was -6.83 which was considered a significant change statistically. Australia is classified as intermediate/medium group of entrepreneurial activity as per GEM 2003. The TEA prevalence rate is 8.6. The female TEA rate is 9.06 and the male TEA rate is 16.35. The men and female ratio is 1.80. In 2004 the country had active entrepreneurial activity, driven by opportunity and necessity. Australia was clustered as high income and low growth country by GEM 2005 report. The ratio of early state opportunity to early stage necessity was 7.1. In GEM 2010 Australia shows the greatest number of women entrepreneurship among the innovation driven economies with men and women participating equally in this activity.
Japan was included in the year 1999 in the GE monitor, as per the GEM report 2000 there were 1 adult in every 100 interested in entrepreneurship that is the TEA prevalence rate was 1 percent. The Ratio of men is to women was 2 is to 0.5. The main critical issues were Cultural social norms, finance and education and training. It had one of lowest rate of entrepreneurial activity. The rate of women entrepreneurial activity was four times lower than that of men. The cultural climate was unfavorable and those who started did not have necessary skills. Education was geared to seek employment cost of raising finance was high. In GEM report 2001, the level of entrepreneurial activity was just 5 percent, lowest that is 1 in every 20 were involved in this activity. The total entrepreneurial activity rate is 5 percent in 2001. Incidence of Venture capital was high in this country during this period. The most important issues were cultural social norms, financial support and education and training. This country had low opportunity based entrepreneurs but high proportion of entrepreneurs by necessity. The involvement of Japanese women in entrepreneurial activity was also low. The ratio is 1 woman in every 2.4 men. Significant structural changes made banks reluctant to lend to entrepreneurs and the tax system and government regulations were not conducive for entrepreneurs.
In 2002 report less than 3 percent of adults are involved in entrepreneurial endeavors. The TEA index was 1.8 indicating low entrepreneurial activity. Compared to 2001 there was a decline to -3.38 points which was considered statistically significant, involving in opportunity based endeavors. The Men women ratio of entrepreneurial activity was 5:1. This report indicated that the female entrepreneurship was 0.6 percent i.e., 6 in 1000. Japan continued to be least entrepreneurial county in as per GEM report 2003. The total TEA prevalence rate is 3.3. Lack of young people and not lack of interest is the reason for low entrepreneurial activity. The female TEA rate is 1.93; the male TEA rate is 5.06 and the male –female ratio is 2.62.
In 2004 Significant changes were observed in Japan and one person in every 70 was involved in starting a business. The total TEA rate was 1.5, one of lowest level of entrepreneurial activity, mostly driven by opportunity. There was no gender division and the participation rates were reported to be statistically identical. In 2005 early stage entrepreneurial activity was 2.2 percent. This country was clustered as high income low growth country. The ratio of early stage opportunity to early stage necessity was 4.2. In 2006 GEM report the nascent entrepreneurs’ activity is 1.6 percent, new business owners 1.4 percent and the early stage entrepreneurs activity was 2.9 percent. Classified as High income country but the early stage entrepreneur activity was relatively low. 85 percent of them started business seeing it as an opportunity.
In 2007 early stage entrepreneurial activity was 4.3 percent showing a growth rate. A high income country is opportunity driven, and only half of the entrepreneurs see their business as full time occupation. This country also exhibit low levels of entrepreneurial growth ambition. The perceived entrepreneurial activity is 2 percent, perceived opportunities are 7 percent, perceived capabilities are 9 percent and the fear of failure is 38 percent.
In the 2008 Report Japan was classified as innovation driven economies and was found that the rate of early stage entrepreneurship had gradually increased. Japanese still did not agree that starting a business as a good career choice. The fear of failure was 44 percent, and just 26 percent felt that entrepreneurship was a good career choice. The TEA ratio was 5 percent Japanese participated in entrepreneurship training and education. In this country men are twice as likely to be involved in early stage entrepreneurial activity as women (8:4).
In 2009 GEM report Japan was classified as innovation driven economy. In Japan entrepreneurship is still not considered as a good career choice. Fear of failure seems to hold back people who see most opportunities for starting a business. The perceived opportunities is 8 percent, perceived capabilities is 14 percent, 50 percent have fear of failure 28 percent feel that entrepreneurship is a good career choice. The TEA rate is 3.3. The Gender gap men are to women 5:1.
In Republic of Korea as per GEM 2000 Report the total entrepreneurial activity prevalence rate was 14 percent. The ratio between men and women was 10 is to 4. The important points of impediments are government policy, finance and training. The entrepreneurial activity rate of women was 37 percent when compared to men. South Korea is well endowed with a well educated technologically sophisticated population, many of whom are highly individualistic and risk averse. Excessive red-tapism and regulatory requirements hinder the start up activities. Many entrepreneurs while technologically strong lack adequate managerial capacity.
In GEM 2001 report Korea was ranked to be the highest group of necessity entrepreneurship. The Total Entrepreneurial activity rate in 2001 was 15 percent. In 2001 Korea had the fourth highest level of entrepreneurial activity among the other GEM Countries. Entrepreneurial activity was high among and proportion of women was very low. The University education system did not do much to encourage entrepreneurship. Level of entrepreneurial activity was highest in this country as per GEM 2002. The TEA index is 14.5. The change compared to the previous year is just -0.37. Necessity entrepreneurship is most prevalent in this country. The men women ratio is 2.36.
In 2003 Korea was classified as high level of entrepreneurial activity. The total TEA prevalence rate is 20.2 in this year. The female TEA rate is 8.75 compared to male TEA rate that is 20.50. The male–female ratio is 2.34 as per 2003 statistics. Korea did not participate in the GEM 2004 /2005/2006 monitor.
In 2008 Republic of Korea was categorized as innovation drive country. 69 percent of the adults perceived entrepreneurship as a desirable career option. The TEA is 10 percent. In this country men are twice more likely to be involved in early stage entrepreneurial activity than women.(15:5)
In 2009 Korea was classified as innovation driven economy. The perceived opportunities is 13, perceived capabilities is 53 percent, fear of failure is 23 percent and 65 percent feel as entrepreneurship as a good career choice, necessity driven entrepreneurship. The TEA rate is 7.0, gender gap is men to women was 10:4. Government and national policies show increased attention to encouraging entrepreneurship.
Summary:
An entrepreneur has clear vision and cannot be discriminated by their race or gender. Women have made their mark by owning business in the Asia – Pacific Region. The researcher has made an attempt through this paper to understand the various impediments face by women entrepreneurs in these countries as highlighted in the GEM reports. Scrutinizing these reports for a decade it is evident that the concerns for women in these countries are the same.
Australia an innovation driven country has the highest human development index and men and women are equally participating in the entrepreneurial activity. But culture and social norms, education and training for women are still critical issues in this country. Japan another innovation driven country is still driven by the fear of failure. Here just one woman for every five men opts for entrepreneurial activity with low proportion of opportunity based entrepreneurs but high proportion of entrepreneurs by necessity. Still in Japan entrepreneurship is not considered as a good career choice. In the next innovation driven country, Korea the entrepreneurial activity ratio between men and women is 10 is to 4. Korea is endowed with a well educated technologically sophisticated population, many of whom are highly individualistic and risk averse. The important points of impediments are government policy, finance and training. Excessive red-tapism and regulatory requirements hinder the start up activities. Many entrepreneurs while they are technologically strong lack adequate managerial capacity in this country.
Malaysia an efficiency driven country is a culturally diverse economy with a long history of immigrant entrepreneurs. In this country it was reported that fear of failure seemed to be holding back people who see most opportunities for starting a business. The gender gap in entrepreneurship activity is very low. It has the lowest level of perception about entrepreneurship as a career. The interesting fact is that the GEM report states that Malaysia has a very high relative level of female participation, with almost equal number of women and men entrepreneurs. China an efficiency driven country is clustered as middle income, high growth country.. Entrepreneurship by young adults in this country appears to be much higher. This country was identified as a hotbed of high growth expectation entrepreneurship, considered to have the healthiest entrepreneurial anatomies. The man women ratio indulging in entrepreneurial activity is 21:16 indicating that the gender gap is low. In China women career is considered as secondary to their husbands and the ‘glass ceiling’ is a significant barrier.
In Vanuatu (least developed country) men have cultural dominance. Women leadership is less public, they influence decision making more at home. Main barriers of business development raised by women at Vanuatu are: absence of affordable training and advice to succeed in business. Women rarely ask for help and feel they should take back seat to man. For women the business license fees and other start up requirements to formalize a business are out of reach; government department are not friendly to women; lack networking and associations friendly to them. They also lament that lack of education and illiteracy are problems and lack of infrastructure, long wait for telephone connection, irregular water supply and electricity add to their wow.
Thus findings from various sources reveal that the women have to go a long way in these countries in the Asia Pacific Region to match their counter parts in the developed counties.
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Copyright: Dr.Padma Shankar
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