UNITED

NATIONS

E

Economic and Social

Council

ECONOMIC COMMISSION FOR EUROPE

Distr.

GENERAL

OPA/AC.21/3

5 October 2001

ORIGINAL: ENGLISH

COORDINATING UNIT FOR OPERATIONAL ACTIVITIES

First Forum of Women-Entrepreneurs

Geneva, 22 October 2001

UNECE Euro-Asian Foundation

of Women-Entrepreneurs

(Note by the Secretariat)

Background

Women throughout the word have been experiencing difficulties in accessing financial resources, business networks, and markets for starting up and expanding their businesses. In this region, women have been struggling with similar difficulties despite of their impressive progress in many walks of social life (political process, educational attainment, employment, career choice, and etc.).

The situation throughout the countries of the UNECE region, however, varies. Whereas, the American women have dramatically advanced their social and economic status, women in many countries in transition have suffered setbacks. Many have lost jobs due to either an economic decline and workers' attrition that followed the initiation of transition, or due to the collapse of public support for working mothers, and, a consequent drastic reduction of public child care, causing many women to quite their jobs.

Transition has had a multifaceted impact on women. For some, it has brought about new opportunities, and they were able to successfully capture them, starting up their own businesses. For some other, it meant the destruction of their livelihood that pushed them to the bottom of social hierarchy. Feminisation of poverty witnessed in many of these countries has been a cumulative effect of transition on female population at large.

GE.01-

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Responding to economic shocks, many women in countries in transition have developed survival strategies, which, in some cases, were transformed in valuable business solutions of economic problems they have been facing. An example of such solutions is, for instance, credit unions created by women-vendors and rural women in order to meet their need in operational capital, and as well to overcome restriction on their access to financial resources in the formal banking sector.

A visible presence of women in the informal economic sector implies that they have capabilities to generate income that could be successfully employed if the institutional setting is right, and a support, at least minimal, for their entrepreneurial activities is available. Most women are well educated and have a higher incidence of high education than men. Therefore, the underutilization of female human resources deprives societies of a significant share of economic wealth, which otherwise could be contributed by women.

Considering that the well being of women directly affects the well being of children, assistance to women's entrepreneurial activities could also improve the child situation, which has deteriorated in many countries in transition.

The situation of women in developed countries of Europe has been showing mixed trends. Some of them are rather disturbing. Women in developed countries have been also affected by a recent re-organization of large manufacturing firms. The latter, in the face of global competition have been "down-sizing" by restructuring and laying off workers at an unprecedented rate. According to a recent study, standard employment rate for women in the EU countries are lower than for men by around 21 percent.1

Adjusting to this development, women, in an increasing proportion, have been accepting less favourable terms of employment, part-time and temporary work arrangements.2 Furthermore, women's earnings have been taxed much heavily than that of their spouses, as it is considered to be a complementary, secondary one, in the family. This has been translated in an increased economic vulnerability of women, as these unfavourable work arrangements coupled with lower pay and heavy taxation do not allow to accumulate significant personal assets.

At the same time, many women have been choosing an alternative path - starting up their own business. Among these women are those with corporate management experience, as well as former housewives with the limited work experience, unemployed women and those, who have been rank-and-file employees for years.

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There has been a surge in female entrepreneurship over the last decade in all countries of the UNECE region. Thus, before the fall of the Berlin Wall, 94 percent of the women of the former German Democratic Republic in the working age category worked. The 20-percent unemployment rate has pushed many women to seek to create their own enterprises. Since 1990, more than 150,000 women-run enterprises have been established.3 In the United States, the share of women's owned enterprises in total number of businesses has reached 38 percent, and the total number of people they provide with jobs more than doubled between 1988 and 2000.

Women-owned and led enterprises, however, are less profitable than those owned by men even in the same industry. Various studies cite a number of reasons:

•	Banks have been treated women's businesses differently than those owned by men;

•	The lack of support networks (banking, professional, business, and etc.);

•	Reluctance to participate in networking;

•	Women's reluctance to take a risk;.

•	Women's choice of industries for starting up businesses;

•	The lack of role models and mentors;

•	The lack of business managerial experience;

•	The lack of technology literacy;

•	Women's reluctance to employ new technologies in their businesses;

•	Women's reluctance to seek opportunities to expand their businesses;

•	The lack of knowledge and information about industries and markets;

•	The lack of self-esteem;

•	Difficulties in making decisions;

•	Women more often seek an advice from their family members and friends rather than from independent experts;

•	Competition between business and family obligations, and, therefore, women devote less time to their own business than men; and

•	Tendency to focus on details, while often ignoring the big picture of demand/supply developments.

As a result, women's businesses tend to be smaller and technologically less advanced. Most of new women's businesses have been created in the service sector, which is more volatile, and often represent a market version of women's traditional activities within the household.

The same studies, however, mark some interesting characteristics of women's managerial style, which, in their view, could open new opportunities for women-entrepreneurs:

•	Women manage their businesses in a more democratic style than men, who are more inclined towards an authoritative style and control.

•	Women are better in team building and tend to care about their employees' development and growth.

•	Women prefer a consensus approach in making a decision.

•	Women spent more time on research and study of options before making a decision.

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These qualities appear to be of value to the emerging new business model, which is less dependable on the personality and needs a cooperative team work.

The main conclusion to which all these numerous studies arrive is that in order to succeed women-entrepreneurs greatly need:

•	to become aware of the shortcomings that undermine their perspectives;

•	to strive to improve their knowledge of market and technologies;

•	to expand women's business networks, and to improve a horizontal and vertical cooperation between women-entrepreneurs;

•	to improve their relationship with the banking sector, as well as the perceptions of the banks about women's entrepreneurship;

•	to rely on high quality professional services; and

•	to have a government support for women's entrepreneurial activities, considering their social and economic contribution.

In the light of the above, it is proposed:

•	To establish an UNECE Euro-Asian Foundation of Women-Entrepreneurs with the following goals/objectives:

•	to improve the access of women's owned and led enterprises to financial resources;

•	to improve women's access to information;

•	to assist women's owned and led enterprises in building up new technological capabilities and capacities;

•	to assist women-entrepreneurs in developing their business networks;

•	to assist women-entrepreneurs in mobilizing a support of the public and private sector; and

•	to improve the competitiveness and sustainability of women's businesses in the market environment.

2.	To set up an Initiative Group to work out a blueprint of a foundation.

The Task of the Initiative Group

The Initiative Group in consultation with associations and women-entrepreneurs – participants of the UNECE Forum will:

1.	formulate the goals/objectives of the foundation;

2.	propose an operational mode of the foundation;

3.	propose a membership structure;

4.	propose sources of financing and means of mobilization of funds; and

5.	propose mechanisms and instruments of funding of activities.