REPORTAGE

Women entrepreneurs in South Africa: Where they are headed

Highlights from a 2023/2024 report by the Global Entrepreneurship Monitor

Women entrepreneurs have a key role to play in a country’s economic growth and development by providing business leadership and in some cases, leading innovations in under-explored markets. In South Africa, women entrepreneurs have come a long way since the dawn of democracy, overcoming gender stereotypes and structural barriers to hold increasingly powerful roles in business. A recent report from the Global Entrepreneurship Monitor (GEM), Women Entrepreneurship in South Africa: What does the future hold?, sheds light on the current state of women entrepreneurship in South Africa and the barriers that they still face, while proposing specific interventions that can remove some of the obstacles.

At a glance, the report, which surveyed 3 038 men and women entrepreneurs, is encouraging: more and more women are braving the odds and pushing through the barriers, venturing into entrepreneurship and impacting communities and society at large. Compared to the GEM’s global average for women, the South African women surveyed have a higher perception of opportunity (61.7%, compared to 55%) and a higher rate of perceived capabilities (66.2%, compared to 55.4%). But the specifics matter for South Africa to support and sustain women founders. Here are three takeaways from the GEM’s latest findings on women entrepreneurs in SA:

Most South African women entrepreneurs are over 35 years old.

The largest age cohort among the women entrepreneurs in the survey (15.9%) was 35 to 44 years old. This was followed by entrepreneurs 55 to 64 (14.2%) and 45 to 54 (13.8%). Younger women were the least represented, with 11.3% ages 18 to 24 and 12.6% ages 25 to 34. A lower entrepreneurial activity amongst younger women was also highlighted in the 2022 Mastercard Index for Entrepreneurs, which indicated 11.1% entrepreneurial activity among working-age women, although this was still an uptick from the previous year’s 10.2%. It would seem that many South African women engage in entrepreneurship at later ages in life, perhaps after pursuing a more traditional career or after raising children. However, in light of South Africa’s high youth unemployment, this trend is somewhat worrying. As such, more interventions are required to encourage younger women to start businesses.

Gender stereotypes still loom for women entrepreneurs.

Social and cultural norms play a role in encouraging or inhibiting women’s success in entrepreneurship. For instance, men are often perceived as more economically ambitious and having a greater risk appetite than women, and are thus more encouraged and supported as business owners. Self-reporting bears out this difference, at least in part: a slightly higher percentage of women surveyed here (52.6%) indicated that they fear failure compared to men (51.5%). This difference could be the result of societal pressures on women to fulfil certain roles, and certain roles only, and which criticises women more harshly for failure than it does men. Whatever the reason, one effect of these norms may be that women entrepreneurs become focused on a need to disprove gender stereotypes, rather than the business opportunity itself. In other cases, fear of failure may push women to pursue certain types of business ventures or certain sectors to the exclusion of others. For instance, a report by the Competition Commission finds that gender-related obstacles discourage women from participating in highly competitive and rewarding markets, restricting them mainly to the informal economy with low returns.

Women entrepreneurs are going digital.

Technology and innovation are the key drivers of growth and competitiveness for entrepreneurs. If anything, Covid-19 proved how crucial technology is in connecting with customers and growing and sustaining businesses. Most developing countries have fully embraced digitisation, even when limited by structural obstacles such as infrastructure, regulation, and investment. In South Africa, digital platforms are growing rapidly, spurred by the increasing use of smartphones and internet connectivity, allowing entrepreneurs to market to wider audiences relatively cheaply. Here, women may have an edge: the GEM report revealed that during the pandemic period, 45% of women entrepreneurs made use of digital technologies in their businesses compared to 35.2% of men entrepreneurs. Among those women surveyed, there was a clear recognition that adopting digital technologies is essential to the sustainability and growth of their business. In terms of increasing their adoption rate, lack of training for women entrepreneurs, as well as limited access to funding, mentoring, and technology may be some of the key factors to address.