Women Entrepreneur in Iran Essay

The only way to survive the volatile situation of today’s economy is to utilize all the available resources and to enhance all the present capabilities. To do so, recognition of women’s competence and their creative talent can help reap the benefit of this big proportion of Iran’s society. In recent years women who comprise half of the country’s population, have occupied more seats in universities than before, however the unemployment rate among women has risen dramatically. Studies have identified a number of barriers that prevent women from realizing their potentials as entrepreneurs.

This study provides a review of the constraints to Women’s entrepreneurship in Iran and recommends some approaches that can help women and other members of the society to tackle these problems . Then the main factors affecting women’s entrepreneurship and the reasons behind the low rate of women entrepreneurial prevalence in Iran has been explained. Based on this study, Governmental organizations as well as private sections have failed to incorporate this national capital. The development of women entrepreneurship seems to be the best way to tackle these problems.

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The Iranian government has taken many measures to support the development of women entrepreneurship, which is expected to play a crucial role in employment creation, gross domestic product growth, and non-oil development. Finally, some useful recommendations on women’s entrepreneurship are made to the entrepreneurial policy makers. Key Words Constraints, Entrepreneurship, Iran, Small to Medium-sized Enterprises, Women I. Introduction There are abundant definitions for entrepreneurship. To initiate some discussion here, we cite one definition, that of (Long et al. 1996), who states that:[. . . ] entrepreneurship is the creation and building of new businesses and entrepreneurs are the people who see the opportunity, create a product or a service package, put together the resources and go on to prescribe and implement plans to take advantage of the opportunity. ” Another definition for women entrepreneurship by (Verheul, Stel, & Thurik, 2004) says that: “entrepreneurship is a process of creating value through a set of particular resources in order to take advantage of the opportunities.

Woman around the world have settled their activities based on four basic criteria; namely,” entrepreneurship capability through knowledge”,” creating business opportunity in various economical sections”,” providing business facilities such as financial aids”, ” establishing local, regional, and global networks”. In many countries around the world women have a crucial role in entrepreneurial activities of their societies; they also contribute a lot in the national economy of their country.

Studies have illustrated that there are lots of barriers that put off women from recognizing their potential capabilities to become entrepreneurs, while they could have important contributions to the society’s development and get socially and economically independent. It is actually because of this independence that numerous societies have denied women (Faghihi et al. , 2011). Unfortunately, there are a limited number of studies regarding women entrepreneurship in Iran due to the fact that this field of study is very new also the employment of women in Iran has always been a challenging issue.

Therefore, women entrepreneurs have increasingly faced with numerous problems in Iran. The purpose of this article is to address the following research questions: how important is women entrepreneurship in Iran? What are their main constraints? What is the impact of women entrepreneurship on SME development? What are some practical ways to develop women entrepreneurship in Iran? In fact women entrepreneurship process can be studied from various aspects as it is affected by a collection of cultural, economic, social and political factors.

By identifying these constraints, this study seeks to highlight lessons for entrepreneurs, those involved in consultancy and advice to policy makers. It also recommends some ways to improve entrepreneurship among Iranian women. The emergence of entrepreneurship thoughts among women as well as the arrival of more educated women to the business world make them more creative and innovative by giving them self-esteem and enough confidence to utilize their special talents. This self- belief will in terms, not only succeed them in life but also will decrease a lot of restraints in which they are facing today.

II. Women Business position in Iran Economic activities of women and their tendency to entrepreneurial activities are of two kinds on the basis of necessity and opportunity. It is on the basis of opportunity in developed countries and on the basis of necessity in developing countries. However both groups of entrepreneurs think of entrepreneurship activities for different reasons such as unemployment and low wages Seymour, Nicole, 2001. Sixty percent of entrepreneurs are in northern Europe and 70 percent in southern Europe (Halimia et al. 2011). According to the data provided by Iran center of statistics Statistical Center of Iran (2009-2010), the unemployment rate among women has increased from 14 percent in 1997 to 17. 8 percent in 2005. In 2004, the unemployment rate was 10. 1 percent among men and 21. 4 percent among women. The unemployment rate for women was twice as much as men in 2005 (Annual Magazine of Statistics, 2005) Social Sciences 2005. The absorption of this national wealth in governmental organizations is not possible because of the abundance of work force.

In order to increase the role of women in national economy and confronting the crisis of unemployment of women, we should provide a good condition for women entrepreneurship in Iran. By doing so, women can provide many opportunities for themselves and solve the problem of unemployment (Gheitani et al. , 2007). According to the study published by the University of North Carolina (Research Centre for Asia and the Pacific), the percentage of all economically active Iranian women has increased from 6. 1% in 1986 to 13. 7% in 2000.

Now women in Iran have allocated more than 60 percent of universities capacity to themselves (Faghihi et al. , 2011). In Iran, the economic participation rate stands lower for women compared to men. “In June- September 2007, the economic participation rate was 65. 4% for men and only 16. 8 % for women. Iran holds the rank of 46 among 50 Less Developed Countries regarding women employment index (Ghasemi, 2001). In 2007, the unemployment rate was 8. 5% for men and 15. 3% for women. The unemployment rate of population aged 15-24 was 18. 2% for men and 28. 7%for women.

The unemployment rate of youth aged 15-29 came down to 18. 8% while standing higher for women (Mirghafoori, Tooranloo, & Taheridemneh, 2010). The World Bank survey on MENA reports that female unemployment in Iran has increased twice that of men (Safiri, 2007). According to Tehran University Women Study and Research Center, unemployment among educated women has risen dramatically in the last five years from 4. 7% to 24%. According to the government figures, the employment rates in major economic sectors indicate that women’s share of employment in agriculture sector (36. %) is higher than men (22. 7%), whereas men’s participation in both manufacturing sector (32. 5%) and in sector service (45. 1%) is higher than women (28. 8% and 35. 1% respectively). Higher women involvement in the agricultural sector may represent the inability of women to migrate to major cities to find a job compared to men. It also shows that women are not skillful enough to look for a better job elsewhere other than in agriculture which requires more labor and harder work.

The businesses created by the Iranian women entrepreneurs with higher education include in different areas: manufacturing (24. 8%), services (66. 7%), and agriculture (8. 6%) (Chamlou, 2010) considering house work as a productive activity Iran GDP with the fixed and current price will increase 70%. The calculations show that in all those years the males’ production rate was more that females’. The main reasons could be inequality of wages in similar jobs, also the number of men which exceeded the number of women in business.

Differences in wage levels are mainly due to the contrast in occupation, women might work shorter hours than men or they might be employed in more part time jobs. Another reason for this inequality of wages is the discrimination in payroll. It seems as if women are more likely to be taken on during recessions and structural adjustment than men. Moreover, women are forced to take up informal jobs to be able to look after their family and children and that is what UNICEF called “invisible adjustment”.

Work limitation of women and their thirst to occupy more jobs leads to more supply of women workers than what the society demands for, in this case more managers and employers are likely to take women on who works more in return for fewer wage. Unfortunately, this is the main reason beyond the differences in wages among men and women which lead to more unwillingness from the part of women to contribute to the country’s economic growth. Although In most of developing countries women work 25% more than men, their rights is 40% less than their counterparts’ men.

We witness the same kind of discrimination in developed countries as well to a lesser degree. In Japan for instance, the salary of women is almost half of men, Sweden on the other hand has a better situation, and women’s salary is almost the same as men 90 to 100, these facts shows that in the world today we still do not have equal salaries for men and women. There is more women presence in some jobs called “Womanly Jobs” to name a few; teaching, nursing, housekeeping, and so on. These jobs are all considered low-paid job taken by women.

Hiring women in these jobs is not only an inappropriate way of encouraging women to contribute to the economy of their country, but it will also keep them well away from any economical participation. III. Women Entrepreneurship Constraints: According to the GEM 2006 report on Women and Entrepreneurship, “regardless of the country, men are more likely to be involved in entrepreneurial activity than women”. This is very true in Iran. Women constitute less than 10% of entrepreneurs in Iran (Mirghafoori, Tooranloo, & Taheridemneh, 2010) which is lower than both regional (MENA) and global (GEM) average level.

Women own 13% of 5169 firms surveyed by the World Bank in MENA. There are limited articles on the reasons behind the low level of women entrepreneurship in Iran (Ghasemi, 2001). Some of restrictions for women’s economic activities are “Structural constraints” which deals with the countries’ structure, the rest are “Non-structural constraints”. Social, economic and cultural constraints are categorized as “structural” and personal and physiological characteristic of women are considered “Non-structural” constraints (Chamlou, 2010).

Arasti has studied 105 Iranian Entrepreneurs with higher education degrees. According to her study, the main entrepreneurial barriers are as follows: laws and regulations (83%), administrative bureaucracy (81%), obtaining licenses (79%), financing (71%), gender discrimination (69%), market inaccessibility (65%), management and cost control (58%), human resource recruitment (55%), searching for suppliers (54%), role conflicts (52%), finding an appropriate partner (40%) and managing the business (31%).

Arasti does not find the socio-cultural factor as an important barrier for Iranian women entrepreneurs with higher education degrees while Saber (2002) considers this element as a considerable barrier to women entrepreneurial activity in general. A. Cultural Constraints: Although economic constraints are the most important factor in women’s employment, studies have shown that values and cultural beliefs of a society have a significant role in women employment.

In a country like Iran the accepted belief among people is that women are not allowed to work without their husband’s permission. Here we list the most important restrictions Iranian women are facing: false social belief about women contribution in economic activities, women lack of information of their civil rights, lack of awareness about available social and economic activities, higher rate of illiteracy among women, lower percentage of women with academic education and expertise.

The society’s perception about women as mothers and wives rather than successful entrepreneurs is most of the time another barrier for women’s entrepreneurship. According to prior studies, marital status has also influenced the women’s job in a way that single women have more freedom to participate in economic and social activities rather than married ones Seymour, Nicole, 2001. On the other hand, as the fertility rate increases among Iranian women, the society is faced with a decline in women’s employment rate because of the important role of women in families as mothers.

Therefore, women in Iran who are expected to be good mothers and good wives rather than successful entrepreneurs do not have enough opportunities to participate in social and economic activities and strengthen their position as entrepreneurs in the society. B. Social constraints: One of the social problems women are encountering in their work place is “Discrimination” (Antecol, 2007). It presents itself in two types of discrimination: Direct and Indirect discrimination.

We witness direct discrimination regularly in all fields, from unequal wages, job promotion, to benefits, overtime, and awards. There are also many discrimination even in the legislation in which one cannot dare to prove them. The indirect discrimination projected towards women is all the negative attitudes that men have towards employment of women. Men see women as a threat to their job security and that is one reason for job and wages discrimination against women. Discrimination can manifest itself through men’s disapproval of their wives’ economical participation in enterprises.

In many societies because of cultural restriction on women, they are expected to spend most of their time taking care of their family and children. In the majority of developed countries and many of African, Latin American, and Asian countries there has been a dramatic increase in the number of women entrepreneurs. Women are the main contributors of SMEs, enhancing their potential partnership in SMEs are necessary for each country’s economic growth. Government should also help reduce poverty and encourage economic and social presence of women.

The most unfortunate problem women are facing in their workplace is “Sexual harassment” (Antecol, 2007). Sexual harassment, which could damage women and their workplace terribly, is mostly done by managers and high ranking personals. Another form of sexual harassment on the part of women is mental violence, this situation is especially worse when men consider women as their economical rivals. Sexual assaults are closely related with sexual harassment, it forces women to be content with their salary, no job promotion and no considerable awards.

C. Economic constraints: Housework is one of the most common work women do in our society, it includes many other economic activities such as; helping with agriculture in rural areas, producing goods and services, and so on. There is no economical evaluation on women’s activities in reducing family expenses and their role in non-financial economy. House work creates income, this income is hidden, and this money remains in family’s pocket to spend on their welfare.

If women do not do the house work for any reason, the family has to pay someone else to take care of this job. There should be more attempts to acknowledge women’s housework as a factor which has direct role in financial economy of a country and families’ income. Considering the fact that housewives comprise three fourth of the country’s population, it is important to cleanse men’s mind of their negative attitudes towards women’s position in society (Labor market Weekly 2008).

Development of social justice as well as supporting employment of women and equality of men and women in workplace has been undertaken in many countries. Although men and women equality in workplace has been accepted in many countries, we could still see inequalities in some countries. These inequalities are especially more tangible in SMEs. Entrepreneur women are mainly involved in informal section of the economy and SMEs Seymour, Nicole, 2001.

Inadequate access to technology, supporting services, information and lack of enough security for women’s participation in some jobs on one hand and the lack of awareness about the accessibility of some raw materials and new markets as well as poor negotiation and bargaining skills on the other hand are other economic barriers. Moreover, long process of applying for a loan, the lack of banking facilities and financial resources as well as bank officials’ negative outlook towards women in refunding their loans are all another major problems for women entrepreneurs.

IV. Ways to develop entrepreneurship in women There are two main methods to reduce restrictions on employment of women; one way is a long term method of gradual change of cultural and social behavior in order to reduce discrimination and the other way is a short term method which has been employed by some countries. The long term method needs ample time to utilize different approaches to bring about public awareness through seminars, educational movies, and mass media programs. The short term method is to enforce practical laws against discriminations of any form.

There are important items in developing women entrepreneurship in Iran; * Considering women dual role both as housewives and mothers, a person who contributes greatly in family income * Recognizing suitable business opportunities with enough flexibility towards demand variations of labor market * Addressing the importance of women’s role in family and education of their children * Preparing proper and available education on how they could manage themselves financially * Enhancing suitable sources of financial and non- financial services to entrepreneur women * Establishing business networks and harmonizing between governmental and private sections

* Educating people in governmental sectors, banks and other financial institutes to recognize women economical potentials Seymour, (Nicole, 2001). V. The Findings of Development of Women Entrepreneurship in Iran This information is gathered from 50 different countries around the world which shows the importance of women entrepreneurship in those countries. Most of these findings are about government actions to support women entrepreneurship, namely; The importance of women entrepreneurship and their contribution in local economy, educational programs to develop entrepreneurship among women, especial services with regards to gender differences, enabling better financial services for women, legal support for women and discrimination laws to protect women, and so on.

In Jamaica, entrepreneur women are experience a lot of difficulties, getting loans and other bank facilities. The main reason in this case is the discriminatory behavior of loaners. They claim that women neither have academic education nor the ability to introduce a reliable bailsman; they totally limit women’s ability to do any business work. In Pakistan this situation is even worse. They face both legislative and discriminatory behavior. Although the number of women is more than men their activities are limited to very small businesses with very limited growth potentials. In South Africa women manage SMEs more than men (18% compared to 11%) in 1996.

In order to develop women entrepreneurship many countries have undertook various measures, in Ghana for instance, the assembly of small industries has established a department under the name of women entrepreneurship. This department programs different seminars, business programs to fulfill the need of women entrepreneurs; it also exhibits job programming for young girls and women in many vocational institutes. In India the small industries, organizations, corporates and local banks have organized a lot of educational programs. The NGO awards for the best women entrepreneurs are given to women on their business merits each year. In Indonesia, government begins a variety of activities to promote women’s role in country’s development.

We hope Iran like many other developing countries begin to support more entrepreneurship women and facilitate their contribution to the economic development of our country. The Iranian government plays an important role in the allocation of resources in the country. The oil revenue constitutes 80% of the country’s foreign exchange revenue which is controlled and distributed by the government. The country’s strategic objectives are classified in Iran National Economic, Social, and Development Plans based on five-year periods. One chapter of the National Plan is allocated to women and the economy. During the last two Iranian National Plans, the Third Plan (2000-2004), and the Fourth Plan (2005-2009), women issues have been prioritized.

National plans, regarding women empowerment are as follows: • To promote women’s economic rights and independence, including access to employment, appropriate working conditions and control over economic resources • To provide business services, training and access to markets, information and technology, particularly for low-income women to strengthen women’s economic capacity and commercial networks • To eliminate occupational segregation and all forms of employment discrimination • To formulate macroeconomic policies and development strategies that can address the needs and efforts of women suffering from poverty • To facilitate women’s equal access to resources, employment, markets and trade • To provide women with possibilities of access to savings and credit mechanisms and institutions • To develop gender-based methodologies and conduct research to address the feminization of Poverty Seymour, (Nicole, 2001). VI. Conclusion: One of the main criteria to evaluate the economic development of a country is the degree of importance they lay upon their women. The world’s attention is directed towards women, for the social and economic development and for the realization of social justice we should consider women as active and creative forces.

The role of women in the country’s development is closely related to the social and economic development and is a fundamental factor in transformation of all societies. Based on the fact that women comprise half of the world’s population, and two third of all jobs are done by women, only one hundredth of the entire world’s properties belong to women, it is important to highlight women entrepreneurial role in our country. The gender gap exists and is significant in women entrepreneurial activities of Iran at both national and international levels. Iranian women are faced with visible and invisible structural constraints and gender discrimination in respect of social as well as economic aspects.

Despite the prioritization of women’s issue in the Third and Fourth National Plans, women’s access to resources and their economically active participation is considerably lower than men. In the Fifth National Economic Plan, a special chapter has been allocated to the subject of women, with even more attention to women entrepreneurship than the previous one. However, obstacles to women entrepreneurship are chiefly social and cultural rather than legal. Promoting women participation in various aspects of life can result in more appropriate entrepreneurial environment for Iranian women. Studies on Iranian women entrepreneur have proved that Iranian women have surpassed all the constraints and barriers to their entrepreneurial tendencies.

Families, government, private sections, institutes and corporates are important factors in encouraging and enhancing entrepreneurship. The more they try to eliminate these constraints, the more realistic the goal of women entrepreneurship development will be.

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