CONTENTS:

I. Introduction
II. Data Collection and Methodology
III. Gender Gap in Employment with a Comparative  Perspective
IV. MSE Entrepreneurs by Gender
V. Women Entrepreneurs. Results of the Field Research
VI. Conclusions
References
Appendix
 
 

I. Introduction

    This research paper aims to investigate the nature and scope of constraints and barriers women entrepreneurs face while starting and/or expanding their micro and small enterprises (MSEs).

    Available statistics show that, in Turkey, compared to male entrepreneurs, the number of female entrepreneurs of MSEs is drastically low. Thus, this study attempts to assess the factors that restrain women from entering small business.

    In the last three decades promotion of MSEs has been in the agenda of governmental and non-governmental institutions both in industrialized and developing countries. Although these agendas have a number of features in common, basically they have different objectives. In the industrialized countries MSEs are associated with creating jobs, human-resource management, creativity and innovation, whereas in the developing countries they are usually promoted as a means of generating employment, alleviating poverty and promoting growth. In this context, women are usually targeted as being the "poorest of the poor".
MSEs, however, are not confined to enterprises of "poor" entrepreneurs. They encompass heterogeneous units ranging from one-person home-based worker, to high-tech units providing commodities or service.

    Hence the policy suggestions which will be drawn from this study will not only target "poor" women entrepreneurs, but also those with higher opportunities but with some "missing" factors that impede the success of their endeavour. Some women succeed in overcoming many of the constraints and establish successful businesses for themselves and their employees. Hence, this study will seek to identify not only the inhibiting but also facilitating factors faced by woman entrepreneurs.

    Section II will present data collection and field work strategies. Section III deals with the position of women in the labor market with a comparative perspective. Here the aim is two fold: The first is to see the rate of participation of women in the labor market with different employment status, compared to men and to give an overview of the relative share of women entrepreneurs in the workforce. The second is to evaluate gender pattern of employment in Turkey in comparison with other countries. Section IV presents an overview of MSEs in Turkey by gender and briefly summarizes the existing literature. Section V evaluates the results of the field research. Conclusions are offered in the final section.

II. Data Collection and Methodology

    This study is based on original information drawn from in-depth field interviews and focus group sessions with women entrepreneurs of MSEs. The interviews are conducted in cities where the density of women-owned enterprises vary in number and nature. The interview sites include 9 cities in various geographical regions of Turkey: Bursa, Corum, Diyarbakir, Erzurum, Istanbul, Izmir, Izmit, Mardin and Trabzon. Prospective participants were identified with the aid of a former field study on MSEs carried out by the author of this paper, and with the help received from women's centers, civic groups and MSE owners.

    The criteria for selection as a participant include such dimensions as the size of the enterprise, sectoral affiliation, the geographical region in which the enterprise is located and the characteristics of the entrepreneur such as age, educational background, marital status and the number of children.

    Examination of the literature on MSEs contributed to the identification of themes for the guidelines used during the interviews and focus groups.

    Issues explored with women entrepreneurs include their familial, socio-demographic, and economic background, the factors that facilitated or inhibited their decision to become an entrepreneur, their experiences of entrepreneurship and the particular issues that confront them as women in business. Attention is given not only to economic factors but also to constraints of non-economic factors, especially the diverse dimensions of patriarchy.

    Interviews are also conducted with various state offices and public organizations, such as KOSGEB (Small and Medium Industry Development Organization), KUGEM (Small Enterprise Development Centers) KSSGM (Directorate General on the Status and Problems of Women) and with NGOs, such as TOBB (The Union of Chambers of Commerce, Industry, Maritime Trade and Commodity Exchanges of Turkey), TESK (Confederation of Turkish Craftsmen and Tradesmen), TOSYÖV (Turkish Foundation for Small and Medium Business), and Izmit Toplumsal ve Ekonomik Gelişim İçin Kadın Merkezi (Izmit Women's Center for Social and Economic Development) in order to identify their involvement in promoting women's MSEs.

    For the purpose of this study the entrepreneur is defined as "one who takes an active role in the decision making and risk taking of a business in which s/he has majority ownership" (Moore and Buttner, 1997:13). The micro and small enterprises (MSEs) that are investigated in this research include the enterprises of self-employed and of employers with up to 50 employees performing in the manufacturing, trade and the service sectors.

    Available official and non-official data sources are utilized to evaluate the situation of women entrepreneurs in the MSE sector. However, most of the existing databases on MSEs do not provide the gender of the enterprise owner and/or the size of the enterprise.

III. Gender Gap in Employment with a Comparative  Perspective

    Since 1970s in many regions of the world there has been a significant rise in women's participation in the labour force (Standing 1999). Whereas in the 1950's only one third of women in the 20-59 age group was part of the labour force globally, at present this ratio has reached approximately 50% (Tzannatos, 1999:552).
It is widely recognised that significant improvement has been achieved regarding women's position in many countries. However, despite positive developments in many areas including education and remuneration, women are still employed in a very restricted number of occupations and are generally paid lower wages than men (UNIFEM 2000).

    Several different groups of countries have been selected with the purpose of studying the situation of women in the Turkish labor market with a comparative perspective: three Mediterranean countries which are members of the European Union, i.e., Greece, Portugal and Spain; two Latin American countries, Brazil and Mexico; two East Asian and Southeast Asian countries, Republic of Korea and Malaysia, respectively; and two countries of North Africa, Egypt and Morocco. It is obvious that these countries are very different from each other in many respects. The following reasons may be cited for their selection for purposes of comparison. The countries in the first group are members of the European Union (EU), of which Turkey wishes to become a member. On the other hand, within the EU, these are the countries closest to Turkey economically and culturally. The Latin American, East Asian and Southeast Asian countries selected are countries that have adopted the import substitution and export based strategies, equally applied in Turkey, at different times and in different fashion. Egypt and Morocco, on the other hand, are those countries within the North Africa/Mediterranean region which are closest to Turkey in terms of GNP. Thus, we will try to assess Turkey's position in comparison with countries which have different economic and cultural characteristics, but resemble Turkey in certain respects as well.

    Table 1 presents data for labour force participation for women and men and the share of women in the overall labour force for the years 1980 and 1999 in order to trace change over two decades. We see that compared to men, women participate in the labour force at a lower rate in every country, but that in some countries such as Turkey the gap between women and men is significantly wider.

    Men's participation in the labour force varies between 63-85% and differences are not marked between countries. On the other hand, women's participation varies across the range 20-53%. Within the overall picture, Turkey is situated at the lower levels, leading only Egypt and Morocco. In countries somewhat closer to Turkey with respect to GNP per capita like Brazil, Malaysia and Mexico the participation of women in economic activities is significantly higher than that for Turkey.
 
 

    It can be observed that, in many countries, the share of women within the labour force has undergone a significant change over the years. In Turkey, on the other hand, this share rose only slightly from 36% to 37% during the last two decades. Nonetheless, when we study the data for 1999, we see that the level of 37% for the share of women in the labour force is higher than that for many countries. In order to analyze this situation at a deeper level, one has to look into the status of employment (Table 2).

    Table 2 divides the working population into the three categories of wage and salaried, self-employed and employer , and unpaid family worker. When compared to all the other countries, Turkey is the one where the share of wage and salaried employment is the lowest within the working population, for both women and men. Turkey is also the country where women are employed as unpaid family worker proportionally more than any other. An overwhelming majority of women having the status of unpaid family worker are those who, in agriculture, work on land owned by their husbands or fathers. Of women who work as unpaid family workers only 5.3% work in the urban sector (SIS, 2000).
 

    As it can be followed from Table 2, in Turkey, women participate in the labor market at a very low level as self-employed and employers, i.e., as entrepreneurs. Turkey stands at the lowest level after Morocco, with a share of 8% women entrepreneurs in women's total employment.
In the next section, the focus will be on Turkey and on women and men entrepreneurs in urban and rural areas.

IV. MSE Entrepreneurs by Gender

    MSE studies in Turkey

    Most of the studies on MSEs and SMEs (Small- and Medium-Sized Enterprises) in Turkey have concentrated specifically on the manufacturing sector and their role in industrialization and economic growth. As a result, the focus has been on technologies, productivity, R&D, marketing and competitiveness (Aktan 1998; Kaytaz, 1995; Kuruuzum 1998; Taymaz, 1997).

    First studies on women entrepreneurs in Turkey have been published in the beginning of 1990s. While studies on MSEs without a gender perspective concentrated on the issues related to the performance of the business, research on women entrepreneurs focused primarily on the descriptive characteristics of the entrepreneur, their role attitudes in the enterprise and in the family, that is, their relations with their employees, business colleagues and with their family members (Celebi, 1997; Celebi et al, 1993; KOSGEB, 2000). Very few studies intended to identify problems and provided proposals and programs to facilitate and promote entrepreneurship among women (DGSPW, 1993 and1996).

    Statistical Evidence

    The official statistics show that the number of women's enterprises increased from 371 000 to 779 000 between 1988-2002, which accounts for  a rise of  109%, whereas men-owned enterprises increased from 4 852 000 to 5 402 000 indicating an increase of  11% (Appendix 1). An analysis of the situation in the urban areas however, show that in the same period, the increase in the number of women-owned enterprises was from 127 000 to 215 000 with a rate of 69%, whereas men-owned enterprises increased from 1 783 000 to 2 373 000 with a rate of 33%. The dramatic rise observed in women-owned enterprises in the rural areas might be an outcome of the transformation experienced in the agricultural sector. As Ozbay (1994:13) puts it: "rural marginalization results in the feminization of agriculture in Turkey". Furthermore, even though the rise in women-owned enterprises in overall Turkey in general and in urban areas in particular has been higher than the rise in men-owned enterprises, still the share of women-owned enterprises in total is 15%. And this share drops to 10% in the urban areas. Those figures, however, should be evaluated in caution. First, it is more likely that more women than men entrepreneurs are engaged in informal activities and second, some activities carried out primarily by women are not acknowledged by the official statistics and thus, women's participation might be reflected to statistics misleadingly low (Ozbay, 1994; Charmes, 1999). On the other hand, it is well-known that a notable number of enterprises are registered legally as owned by women, whereas in essence run by men

    Table 3 gives the distribution of women and men enterpreneurs in terms of the size of the enterprise measured by the number of employees. The categorization of the statistics, however, do not allow us to see the distribution of women/men entrepreneurs below and above the size of 50 employees. Nevertheless, it can be observed that women are primarily concentrated in self-employment. Women entrepreneurs working on their own constitute 61% of total employer and self-employed women whereas this figure is only 30% among men entrepreneurs.
 

    Among the employers women are more likely to have micro enterprises with 2 or 3 employees. 94% of women employers and 89% of men entrepreneurs have micro enterprises with less than 10 employees. These figures indicate that the vast majority of enterprises are microenterprises.

    It is well-documented that in the labor market, as employees or employers, women and men tend to concentrate in different sectors. Mead and Liedholm (1998: 64) observed that in the developing countries while men's enterprises are more evenly distributed and over a wider range of activities, women's MSEs are usually confined to a narrow range of activities such as knitting, sewing, cooking and retail trading.

    Table 4 shows that majority of self-employed women are engaged in agricultural activities. No women employers are found in the mining and construction sector.

V. Women Entrepreneurs. Results of the Field Research

 In this section, the issues that are being explored in the field survey are presented:

    A. Why a women wants to become an entrepreneur?

        This section will analyze the intentions of women while starting their business.

• There is a strong suggestion that reasons unique to women play a major role in the decision to become an entrepreneur.
• For some women entrepreneurs family environment plays an important role in their decision to become an entrepreneur. Moore and Buttner (1997:16) states that "historically, female entrepreneurs have tended to come from the ranks of women who grew up self-reliant. Some are encouraged by family mentors."
• Some women resort to entrepreneurship because they lack the education and skills to find employment in the formal sector.
• Increased entrepreneurship by women could be a reaction to continuing discrimination in the formal labor market (Weiler and Bernasek 2001).
• Economic necessities such as making a living after a divorce, the two-income requirement for a desirable standard of living appear to be crucial reasons to enter business.
• Some women enter business for self-fulfillment rather than a supplement to the family income.
• "In cases where women are earning less in self-employment than they were in wage employment, it may be that the nonpecuniary benefits of self-employment lead to a utility premium in running one's own business in excess of the value placed on the loss of income, which is especially relevant in the case of women entrepreneurs" (Moore and Buttner, 1997) What are these non-pecuniary benefits?

• Studies on the type of work performed by women entrepreneurs show that women often draw on existing knowledge and skills such as cooking, washing, sewing, child and elderly care, etc. Even with higher education and additional marketable skills women are more likely than men to engage in activities that are extension of their domestic roles.
• Activities that are extension of domestic roles usually require low capital and training. "Women were more likely than men to undertake businesses that did not require any capital to get started" (Weiler and Bernasek, 2001).
• Do women try to avoid male-dominated areas or are they not allowed to enter those areas?

        Cultural and social environment

• What are the cultural and social factors that make it easier/more difficult for women to enter entrepreneurship and stay in business?
• Linkages between work and family. Brush (1992) suggests that "when a woman starts or acquires a business, the set of business relationships are integrated into her life" (Moore and Buttner, p.15).
• How important are the role of family, social networks, religious and ethnic solidarity in market relations MSEs? Ozcan (1995) suggests that social networks provide opportunities to develop business experience and financial means to set up a business.
• Family labor plays a crucial role in MSEs (Aktar, 1990; Cinar et al., 1988; Ozcan, 1995; Ozar 2000).

•  UNDP report (1998) shows that lack of financial resources, high fees required for registration of the enterprise and high taxes paid by the registered enterprises are the most inhibiting factors for women entrepreneurs.
• Banks consider loans to the MSE sector too costly and without collateral too risky. A great majority of women lack assets necessary for collateral requirements. In some countries like India, initiatives exist for providing alternative sources of credit for women entrepreneurs like SEWA (Self-Employed Women's Association). "SEWA has set up a bank of its own. The majority of SEWA loans are unsecured, supported by a reference person and investigation into the background of the applicant." (Reddy, 1998: 254).
• Why are women-owned enterprises are disproportionately concentrated in low-return activities? (Mead and Liedholm 1998:71).
• Micro credit programs have become one of the key strategies for addressing women's poverty. These programs have been successful in increasing women's income levels and control over income in many of the world's poorest regions, however, for some women and their families, microfinance programmes have had negative impact (UNIFEM, 2000). Mayoux (1995) argues that the diversity of the small-scale sector on the one hand, and the complexity of the constraints posed by poverty and inequality on the other hand, make it unlikely that any easy 'blueprint' will be formulated for successful women's micro-enterprise development.
• Women have limited access to capital, business and technical education, and management experience. How do women provide necessary skills for their activities? Do they have access to new technologies?
• How do changes in macro level economic environment affect MSEs in general and women's MSEs in particular.
• How do women entrepreneurs manage to survive during the economic crisis?
• Is there a relationship between economic crisis and failure of women's enterprises?
• A field study in Cairo on small-scale manufacturing industry shows that even in times of deteriorating economic conditions and growing competition from expanding modern industry MSEs manage to survive thanks to their flexibility in adapting new conditions. They are able to immediately adapt their production to the changing demand. For example, some workshops turn from production to repair. More and more customers are inclined to have defective articles repaired because they cannot afford to buy new goods. (Meyer, 2000)
• How do women entrepreneurs perceive success or failure? What are their criteria?

• Most programs that target MSEs as an appropriate strategy for national development explicitly target men, better-off firms and certain sectors like manufacturing where men predominate.
• Otero (1994) shows that in Latin America NGOs have been more successful than state programs  in providing services to women entrepreneurs.
• Celebi (1997) found out that women entrepreneurs of small enterprises in the tourism sector in Turkey have not received any support from governmental or non-governmental institutions of any kind. She argues that the governmental institutions give support, if any, to those women that are in production like weaving rugs or making embroidery, and ignore the problems of women working in the trade and the service sector (Celebi, 1997:60).
• The existing structure of bureaucracy negatively affects the MSEs operations since their entrance into the market. "To establish a small or medium-scale firm, depending upon the type of production and sector, it is necessary to apply 60 public institutions and complete different kind of paper work" (TUSIAD, 1987:48) (See Appendix 2, Table 1) It is clear that one needs time and knowledge to complete all the process which is complicated and difficult, to finish alone without help (See Appendix 2, Table 2).
• Many MSE entrepreneurs, men and women, would like to expand but are reluctant to do so because of the restrictive legal and regulatory frameworks operated by the governments.
• Governmental policies frequently discriminate against MSEs relative to their larger counterparts (Mead and Liedholm 1998:70).
• Women have often been excluded from the male dominated professional and trade associations and this fact negatively affects the advancement of their business.
• How do women entrepreneurs develop and sustain formal and informal networks?

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Appendix 1:
 

Appendix 2: