Emirati Women Entrepreneurs and Their Challenges

Abstract

The idea of women’s entrepreneurship is a growing aspect in the developed as well as in the developing countries of the world. However, there is a lot of literature concerning the participation of women in entrepreneurship in the developed world as opposed to the literature available on the same in the developing countries. The research paper looks at the challenges of women entrepreneurs with particular emphasis in the UAE with a view of developing a framework that would address these challenges. The framework will provide more light on these challenges and, ways to address them.

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Introduction

There have been a growing number of women entrepreneurs in the UAE who have shown determination in transforming the region economically. Indeed, women in the region are becoming key investors in various business portfolios or ventures. They hold a strong passion for providing economic solutions in the region that has immense business potential that has not received full exploitation. They aim to make an appositive contribution to the region’s economy by creating more job opportunities. However, they have been facing several complications that threaten to stall their activities (Abdelkarim, 2001). The problems range from policy issues, poor management skills, operational plans, and financial management complications. These issues require absolute mitigation through systematic approaches since the problems hold far-reaching effects that can render their business ideas redundant and inconsequential.

in the current world, the empowerment of women has taken center stage globally where women have taken up the responsibility of starting up a business as entrepreneurs to enable them to take up control of their lives, professional life, finances, and their families without the help of men. In the United Arab Emirates (UAE), women do not enjoy similar positions like their male counterparts. This segregation in terms of gender starts early in life and it moves on to become the way of life among the Emirates.

However, due to the more demanding economic and harsh, conditions, the women in UAE are forced to venture into business and participate in economic activities either informal employment, self-employment, or as entrepreneurs. Compared to other developing countries of the world, the percentage of women in entrepreneurship business is at its lowest in the UAE. Most of these women are found in the rural areas of the UAE. The few women who engage in entrepreneurship are found in various industries such as embroidery, craft making, tailoring, leatherwork, carpet making, pottery, and ceramics, while other are found in the food processing industry which proves that women in the UAE have great potential; that is untapped and which can be put in good use if the challenges facing the UAE woman is addressed. The determinants of female, participation in entrepreneurship are driven by various factors such as micro-economic and macroeconomic factors.

The research aims at looking at the problems or barriers faced by women entrepreneurs in the UAE and their impact on the entrepreneurial spirit of women.

Brief Literature Review

There have been quite a good number of researchers who have taken the task of understanding the challenges faced by women in entrepreneurship businesses. Reviewing the literature shows that there are several ways of defining entrepreneurship and the motives that would drive women in the business. We start by defining entrepreneurship.

Defining Entrepreneurship

There has been no generally accepted definition for the term entrepreneurship among the researchers (Abdelkarim, 2001), who stated that entrepreneurship is doing something new or doing something that has been done in a different way (innovation). Kargwell defined it as “the creation of a new business enterprise by individuals or small groups, with the entrepreneur assuming the role of society’s major agent of change, initiating the industrial progress that leads to wider cultural shifts (2012)”.

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In the past decade, the UAE has experienced several Emirati women establishing their businesses. This has been mainly possible because of the efforts of the UAE government whereby they have been working towards the growth and development of women in the UAE society. The UAE government is working towards providing equal study and work opportunities to Emirati women alongside men. The main reason for this is that the UAE government is promoting investments in the small and medium enterprise (SME) sector. Kargwell in her article highlights that according to the 2010 figures about 86 percent of the people working in the private sector belonged to the small and medium enterprises category (2012). The UAE government has therefore been working towards encouraging private investments so that the level of economic activity in the country can be improved.

In this view, the UAE government recognizes Emirati women as strong potential candidates as they are keener to start their businesses to gain financial independence. Naser et. al. in their article highlight that Emirati women in modern times are well educated and have the potential to start their businesses (2009). Moreover, young Emirati women plan their careers in an effective manner whereby they start their career by working with a private or public organization, and once they have gained experience they work towards establishing their own business.

Madsen in her article states Emirati women as compared to their counterparts in other countries find it relatively easy to get the start-up capital for establishing their businesses (2010). The main reason for this is that they belong to high-income families whereby they can afford the initial investment without much difficulty.

In the recent past in the UAE, women entrepreneurship has received a lot of attention due to the availability of enough evidence for economic growth and development (Abdelkarim, 2001. Female participation in entrepreneurship greatly contributes to economic development and the creation of employment as well as influencing the diversity of entrepreneurship in the economic realm (Johnson and peter). These benefits remain largely untapped although they are potentially due to the challenges that women face.

Rate of men versus women in business

There is a lot of evidence that female participation in business is increasing due to the importance of economic development and liberalization of the economy in the UAE. However, the rate of women participation as compared to their male counterparts is much lower (Sowmya, 2010).

(Sowmya, 2010) shows the variations in the rates of entrepreneurship across the UAe states, with men being more active. In general, it was observed that the states with a high number of women in entrepreneurship also recorded a high number of entrepreneurial activities (Davidson, 2008)

“While the literature on female participation in entrepreneurship has traditionally focused on the micro-level, including an exploration of the distinctive characteristics of female and male entrepreneurs in terms of motivation, personality traits, or experience for example, or the features of their firms as size, goals, access to capital, management, and performance, more systematic attention has been accorded in recent years to the influence of macro-level factors on entrepreneurship generally, and female entrepreneurship specifically (Abdelkarim, 2001).

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Rules of entrepreneurship

There must be a lot of discipline when one starts a new business. Therefore, the following are the simple rules of entrepreneurship (Sowmya, 2010).

  • Find a market niche where the already established entrepreneurs will not find you.
  • The entrepreneur needs to identify the market and take the time to learn about it.
  • You require enough finances to start the business.
  • Payment of professional services offered.

Women entrepreneurs

A woman entrepreneur is a lady who is running her own business which she has started from scratch or one who is running a family business (Sowmya, 2010). The following are the characteristics of a female entrepreneur,

A society with women is a society with good manners, which is a prerequisite to success in business. The increasing trend of participation in entrepreneurship by women is a clear indication that time is not long-form for women to take control of the economy.

Women possess the natural gift of politeness, humbleness, and are focused. If they are given the opportunity and an equal level playing ground in the UAE, they can bring a much-needed milestone in economic development. Women in the UAE make a large contribution that goes unnoticed in economic development. The states employ other people who provide similar services that could have been provided by women.

According to Abdelkarim, “barriers some real some perceived and some self-imposed, confront women, entrepreneurs. This includes lack of education to learn a business, obstacles in obtaining trade licenses, and societal, cultural, and religious attitudes (2001).

In addition to this, Kargwell in her article states that modern Emirati women do not limit themselves to opening businesses in the trading sector (2012). The young Emirati women are increasingly working towards entering new fields and establishing businesses in the service and manufacturing sectors as well. The main reason for this is that the UAE has experienced tremendous economic and technological development in the past decade. This has opened up a large variety of business sectors for Emirati women entrepreneurs thereby creating huge opportunities for new business establishment.

Furthermore, the UAE government has worked towards developing its educational sector to a large extent. This is because in the past decade several new schools and universities have been established in the country (Sowmya, 2010). This has enabled Emirati women to pursue higher education without needing to travel to a foreign country. Moreover, several international universities have been established in the UAE that provides world-class undergraduate and postgraduate programs in various fields ranging from science, media to information technology.

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Research objective

To investigate the problems that women entrepreneurs face in the UAE that limits their performance in the business sector.

Purpose of the study and methodology

This study provides insightful and factual information about the problems that limit the performance level of women entrepreneurs in the UAE. It aims at equipping stakeholders with credible information to facilitate decision making and policy formulation to foster business development. The qualitative research methodology is under adoption for this study due to its capacity in driving studies that are set with qualitative ideas. The methodology is appropriate since it ensures the realization of factual, quality, reliable, and credible information.

various methods can be used to come up with the required research paper. They can be through questionnaires and observation as well as interviews.

Problems that women entrepreneurs face in UAE

As noted, women entrepreneurs in the UAE region have been facing immense problems that limit their performance capacity in the business sector (Abdelkarim, 2001). The problems that are socially and economically instigated range from structural issues, strategic, policy formulation, administration skills, and financial management issues. Firstly, UAE women entrepreneurs have not been receiving holistic support from the government in terms of funding, security, and formulation of favorable business policies. The government has not been able to provide women with adequate funds or grants to boost their ventures as evident in other settings (Davidson, 2008). The government has also been reluctant in crafting favorable business policies that are conventionally informed. The unfavorable policies that favor established business operators have not created a level playing field that can enable women to gain a competitive advantage.

Secondly, the lack of proper training on key issues about business administration, financial management, allocation of resources, and strategy formulation is also affecting women entrepreneurs in the UAE. They lack training on key aspects that define the successful nature or failure of a business. Indeed, training on these elements is a key aspect that women should undergo if their performance in the business sector is to be high (Davidson, 2008). Thirdly, they lack the requisite skills and administration capabilities that are fundamental in ensuring effective coordination of activities, allocation of resources, and enhancement of efficiency. This has been affecting their effectiveness and efficiency in the execution of various activities thereby exposing them to unwarranted losses.

Consequently, they lack the capacity of identifying proper project management tools and operating techniques that are essential in ensuring exemplary growth (Moore, & Longenecker, 2008). According to the findings of various studies, it is evident that key issues that affect women entrepreneurs have not been receiving adequate attention since the focus is mostly put on opening and managing businesses. This has been affecting women entrepreneurs in the UAE who affirm that they still operate in a hostile business environment that does not favor them in comparison to their established competitors. This affects their performance levels.

Studies have shown that women may be having difficulties in raising finances; they have less likelihood than their male counterparts to gather enough finances, confidence, and a network of contacts that would enable them to start a business and run it successfully. In addition to these problems, there exists gender discrimination by finance and support service providers, by employees, customers, and cold feet by the government. According to (Davidson, 2008) “previous research shows that it is more difficult for women to raise start up and recurrent business finance than men and that women are more likely to encounter credibility problems when dealing with bankers”. The four areas in terms of financing that women find problematic are;

  1. Women are at a disadvantage when it comes to raising start capital
  2. Most of the guarantees required by financial service providers are beyond the ability of women to raise and their credit history does not favor them.
  3. When women establish a business, it becomes difficult for them to raise capital as compared to men due to the greater problems women face while trying to enter the financial network.
  4. There is a bitter relation between bankers and women where bankers view women as having high risks than men

Women are faced with another challenge of lack of information especially information relating to business and technological development. Women in the UAE possess little access to information and technology which affects their entrepreneurial spirit. According to, (Moore, & Longenecker, 2008) “women access to information is mainly limited because of the restraint on their mobility and communication due to socio-cultural factors. Lack of access to information hinders women entrepreneurs in many ways”. Starting a new business by women in the UAE is never a simple job and it is made worse by a lack of information on the laws and regulations governing the various businesses. Also due to their lack of information, they are not in close contact with their suppliers, middlemen, people who offer tenders, government support centers and they lack the technological know-how.

Women also lack management skills because they lack prior business experience. They are deemed to have never run a business successfully. They also suffer from a language barrier with their clients. Also, women have another problem since they lack the necessary marketing skills to market their businesses. The other problem faced by women in the UAE is that they leave their workplaces for a long period when they are on maternity leave. This exposes their businesses to poor management, especially where they had not recruited a replacement.

Therefore, the problems that women in the UAE face can be summarized as follows;

  • Lack of information
  • Lack of product design
  • Lack of skill development
  • Lack of marketing skills and facilities
  • Lack of micro-financing schemes
  • Lack of business or entrepreneurship skills

Expected Findings

This research conducted for this paper has identified the main obstacles that prevent Emirati women entrepreneurs from successfully operating their businesses in the long run.

One of the main factors that prevent Emirati women entrepreneurs from achieving success in their business is the lack of family support. The main reason for this is that Emirati women are expected to play dual roles in society. This means that they are primarily responsible for taking care of their husband and children while playing the role of a caretaker. Moreover, as an entrepreneur, they also have the responsibility of managing the operations of their business successfully. This causes Emirati women to work towards maintaining a balance between their work and family life. Most Emirati women are unable to maintain this balance in the long run as they get exhausted from effectively managing dual responsibilities.

Another factor that prevents Emirati women entrepreneurs from achieving success in their business is the lack of specialized training programs that enhance their leadership skills. The main reason for this is that entrepreneurs need to have access to specialized training programs where they can be taught and mentored by successful leaders. These kinds of programs are very few in the UAE. Moreover, the existing programs are only limited to focusing on training male leaders. This creates a problem for women entrepreneurs as end up having lower leadership skills than their male counterparts.

Women also observed that political instability adversely affected their business. This is because; no investor would like to invest in a politically unstable state. It was observed that the economic meltdown greatly affected women’s morale to conduct business. This is especially to women entrepreneurs who were involved in international trade since the foreign currency fluctuated forcing most of them out of business. A regional and international competition was also cited as a major factor affecting the success of their businesses in the region. Male usually dominate the majority of the business and they pose the major competition to women entrepreneurs.

It was observed that legal constraints also put a burden on women as they were not able to obtain the requisites documents required to run a successful business. There was a trend that was observed that women are generally afraid of starting their businesses ass they see it as a male dom9inated field. Lastly, childhood upbringing is also an important factor that can prevent Emirati women entrepreneurs from achieving success in their business. The main reason for this is that Emirati women are mainly brought to adopt a subordinate position as compared to men in society. This prevents Emirati women from taking up leadership positions. Moreover, Emirati women are brought up in an environment where they are refrained from openly expressing their views and ideas. Due to this, Emirati women find it difficult to bring their innovative ideas to fruition when working in the position of an entrepreneur.

Conclusion

In conclusion, this research identifies three main factors that harm the success of Emirati women entrepreneurs. These factors are family support, specialized training programs, and childhood upbringing. This report recommends that the UAE government should work towards providing specialized training programs for women leaders so that they can acquire and develop the necessary skills required to successfully manage their businesses. Moreover, the government should generate awareness among the people about providing support to Emirati women in terms of their domestic roles and their upbringing so that they can become financially independent and contribute towards the development of the country. It should also be noted that women contribute equally to the economy, just like men. They should be provided with a conducive business working environment and business incubators for women should be established. Technological advancement is another challenge facing women entrepreneurs in the United Arab Emirates. Therefore, women should be equipped technologically to enable them to start up business to fruition.

The male counterpart should allow their female counterparts to start and own businesses to provide fair competition which will be good for the economy.

References

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Gallant, M., Majumdar, S., & Varadarajan, D. (2010). Outlook of female students towards entrepreneurship. Education, Business and Society: Contemporary Middle Eastern Issues, 3(3), 218-230. Web.

Kargwell, S. A. (2012). A comparative study on gender and entrepreneurship development: Still a male’s world within UAE cultural context. International Journal of Business and Social Science, 3(6). Web.

Kargwell, S. A. (2012). Women entrepreneurs breaking through: Push and pull within UAE cultural context. International Journal of Business and Social Science, 3(17), n/a. Web.

Madsen, S. R. (2010). The experiences of UAE women leaders in developing leadership early in life. Feminist Formations, 22(3), 75-95. Web.

Naser, K., Mohammed, W. R. & Nuseibeh, R. (2009). Factors that affect women entrepreneurs: Evidence from an emerging economy. International Journal of Organizational Analysis, 17(3), 225-247. Web.

Abdelkarim, A. (2001). Employment and Employability in a Small Oil Economy-the UAE. Maastricht, the Netherlands: Shaker Publishers.

Davidson, C. M. (2008). Dubai: The Vulnerability of Success. New York: Columbia University Press.

Moore, C. W., & Longenecker, J. G. (2008). Managing Small Business: An Entrepreneurial Emphasis. Australia: South-Western/Cengage Learning.

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