How Large is the Arena is for Female Entrepreneurs?

By Professor Jinyun SUN, Fudan University

According to the co-research project by Fudan University and the Bank of Communications, twice as many female entrepreneurs of SMEs engage themselves in the service sector as opposed to the manufacturing sector. Female entrepreneurs in developed regions are more capable of handling political relations than their male counterparts.

In today’s China, we see women are gaining the upper hand in higher education and it is more likely for them to take over leadership positions in government and industry. Free competition in the market motivates women to establish their enterprises and fight tooth and nail to make it work on their own.  Fudan University and the Bank of Communications jointly issued a report recently on the tendency of female entrepreneurs, the industries they choose and their areas of specialty.

The survey shows that female entrepreneurs account for 14.2% of the total samples and they account for 9.6% in the manufacturing industry and 18.4% in the service sector. The reason for such a distribution, according to Jinyun SUN, head of the project, is the comparatively lower threshold of entry in the traditional service industry in terms of capability and resources. The mentality of risk-avoidance and “play it safe” has driven female entrepreneurs to start up in service-oriented industries.

The survey also indicates that amongst the sampled female entrepreneurs, 19.4% are based in Southwest China — the highest in terms of geographic distribution, which is followed by the Central, Northeast and South China with respective proportions of 16.5%, 16.5% and 16.2%. The Northwest and East China regions have rather low proportions of female entrepreneurs, both at 7.9%.

It is also revealed that female-led enterprises tend to have smaller total assets than their male-led counterparts. This trend is also evident in the number of employees in the enterprises, especially the manufacturing industry. The dual roles of entrepreneurs and women as well as social norms on genders have constituted both internal and external constraints which limit more women from entering the service and manufacturing industries in China. However, there has been no evidence that female entrepreneurs are inferior in regards to making profits according to the statistics of the survey.

The more developed the region is, the more effectively the market operates and the less important the relevant relationship assets are. Studies have proven that gender does have a prominent impact on a business’s management of external relations. Female entrepreneurs’ feminine traits of gentleness, warmth, sympathy and patience plus good communicative skills have given them an advantage in establishing rapport with government officials over their male counterparts.

Thus, female entrepreneurs in developed regions are more capable of handling political relations than their male counterparts, whereas male entrepreneurs in under-developed regions are more capable of dealing with economic relations than their female counterparts.

Jinyun SUN points out that businesses should always strike a balance between the maintenance of economic and political relations during their different developmental phases. Each business will have to develop its own set of management concepts and methods in regard to such relations, based on its regional economic environment, available resources and the personal traits of the entrepreneur.

Considering the potential of success for female entrepreneurs, maybe more programs should be set up to encourage entrepreneurship. What, if anything, do you think business schools should do to promote female entrepreneurship? Let us know by leaving a comment below!

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