Employment, entrepreneurship and young women leaders
More than two years have passed since the Arab uprisings started in Tunisia and spread to other countries. In that time, the Arab world has experienced an extraordinary transition, the impact of which will be immeasurable for decades, if not generations, to come. Many Middle East and North Africa (MENA) countries are still undergoing profound transformation, with young Arabs continuing to demonstrate for inclusive, transparent government and extended social and economic freedoms grounded in equality and opportunity for all citizens. From the beginning, young men and women have led the movement for change, calling for an end to complex economic, social and legal constraints, and the cultural norms that have inhibited the ability of women and youth in the Arab world to engage fully in the public sphere.
Before the Arab Spring, the region’s leaders had already made some significant changes, prioritizing private sector job growth and economic diversification, and facilitating access and opportunities for women and youth to enter the job market or start and grow their own businesses. As a result, the Arab world now has more women serving in company boardrooms, political cabinets and the regional and global media than ever before. MENA countries have also made significant investments in human development and education, with almost all closing 90% or more of the gender gap in education over the past decade. The number of women holding ministerial level positions and other roles in public life has also increased in the past decade.
Following all that has happened in MENA countries over the past two years, there are now unprecedented opportunities for women to claim a critical role in shaping the frameworks that will set legal, political and social precedents for decades to come. It is also an optimum time to reform the MENA business environment and draw in potential entrepreneurs, producers and investors, including women with the education, ideas and aptitudes to make a real difference to the future of the Arab world.
It is well documented that Arab youths have been marginalized in terms of economic opportunity in most MENA countries and that women are vastly under-represented in science, engineering, sports, media, medicine, business, finance and law. They are also under-represented in politics, holding just 9% of seats in parliaments across the region. Today, according to World Bank research, only 27% of women in the region are part of the labour force, compared to 51% in other low-, middle- and high-income economies, and only 11% are self-employed, compared to 22% of men. These low participation rates represent a critical missed opportunity for much needed economic growth and development in the Arab world.
With change happening all around them, many Arab women believe that this is an optimum time to tap into niche markets by leveraging technology to meet the demands of modern consumers. In the process, they are attracting significant venture capital interest. Following the Arab Spring, more women than ever in the region are choosing entrepreneurship over traditional employment, sometimes out of economic necessity. They are coming up with business concepts that are knowledge-based, innovative, scalable and tech savvy. The World Bank estimates that women own 20% of MENA companies, compared to 32% in countries within the Organisation for Economic Co-operation and Development (OECD), and 39% in Latin America and the Caribbean. Women entrepreneurs are proving to be prolific users of information communication technologies and social media, which are fundamental to global competitiveness.
While the number of women entrepreneurs is rising, Arab women face greater challenges than men in securing employment, while unemployment is highest among women, especially among the most educated. For example, research by Booz & Company shows that 57% of university graduates in Saudi Arabia are women, but women represent just 12% of the country’s labour force and work primarily in the public sector.
The region also has one of the highest percentages of women working in agriculture. The International Centre for Advanced Mediterranean Agronomic Studies states that up to 60% of women work in agriculture in Morocco and 50% in Egypt. According to the World Bank, 70% of the MENA region’s poor live in rural areas. Food security is one of the most important challenges for the region as there is a high rate of population growth among those who depend on agriculture. Agriculture is central to Arab economies and women play critical roles in the production of food and goods. Prospects for women’s employment
Arab business women in MENA countries are struggling for access to capital, technology, networking, marketing opportunities, skills building and specialist training. Cultural attitudes about the value of women’s work and gender equality affect women’s economic participation in every part of the world, but in the Arab region these attitudes are particularly harmful to women’s entrepreneurship and have a deep and negative impact on Arab women’s professional choices and chances of success.
Numerous reports from organizations including the OECD, the World Bank, the International Monetary Fund and regional think-tanks suggest that highly educated young women are vulnerable to unemployment in MENA countries. For example, the percentage of young Egyptian women graduating with a university degree rose from 6% to 12% between 1998 and 2006, but the unemployment rate increased from 19% to 27% among young women in the same period of time.
Significantly, Oasis 500, a start-up business incubator in Jordan that decides which entrepreneurs to support after putting them through business boot camp, notes that Arab women are twice as successful as their male peers in attracting investment. Approximately 22% of Oasis 500 boot camp attendees are women and around 40% of the investments made by Oasis 500 are in companies led by women.
According to the World Bank and the OECD, small- and medium-sized enterprises owned by women in the Middle East tend to hire more women, with around 25% of employees being women compared to 22% in male owned companies. The World Bank notes in The Environment for Entrepreneurship in the Middle East and North Africa Region: 'This difference may not seem large, but female-owned firms also employ a higher share of female workers at professional and managerial levels. Male-owned firms employ more women in unskilled positions.'
Especially promising for the region, in December 2012 it became mandatory to have female board members in every company and government agency in the United Arab Emirates. This instruction was announced via Twitter by Sheik Mohammed Bin Rashid Al Maktoum, vice-president of the United Arab Emirates and ruler of Dubai. Imagine the impact on the region’s economy if every MENA country were to follow this lead.
The Arab International Women’s Forum has long believed that the political empowerment of women in the Arab world is the most legitimate pathway to sustainable development in the region. In its Women in the Workforce report, the World Bank states: 'Women’s participation in the economy is believed to provide a tremendous impetus to their enhanced participation in public affairs.' As yet, the Arab Spring has failed to deliver greater political power to women in the region and in many affected countries the gains made by women in public life over the past decades have been eliminated or seriously weakened.
In Egypt, for example, women were largely excluded from the nation-building process following last year’s change of government. Not a single woman was included in the committee that formed the new constitution, and the percentage of women in Egypt’s parliament fell from 13% in 2010 to just 2% in 2012 according to the Institute of Development Studies report Bringing Gender Justice to the Egyptian Parliament. Despite these setbacks, Arab women's groups continue to engage actively in opposing oppression and pushing for change. There has been a renewed civic dynamism in the Arab world, but this needs to translate into more women becoming involved in drafting new constitutions that will safeguard their rights.
Arab governments should acknowledge the important role women play in the region as business owners, especially in light of the potential of women entrepreneurs to stimulate economic growth, boost regional productivity and create jobs. But women need to play a larger role at this critical time. Without more women in politics, business, finance and civil society playing concrete roles in shaping the new Arab future, there will never be real, lasting and sustainable empowerment for women and youth in the MENA region.
Increasing the participation of women in the workforce will require collaborative efforts between the public and private sectors. Many governments are already working to meet female employment targets nationally and are creating incentives for private sector firms to recruit, train and retain women employees. Progress depends on Arab schools and universities producing candidates who are prepared to meet the demands of new growth sectors, such as technology, sciences and engineering, rather than the traditional sectors of healthcare and secretarial work.
Cutting the cost and complexity of opening formal businesses would allow entrepreneurs to contribute new ideas, services, concepts and technologies, boosting productivity and growth across Arab economies. Improving access to finance is also a requirement if the region is to see any real growth in entrepreneurship and job creation. The World Bank reports that in the MENA economies, commercial lending accounts for only 10% of funding and is notoriously difficult to secure. Nearly 80% of new ventures are financed by an entrepreneur’s own savings or earnings.
Although the region’s business and investment laws are largely gender neutral, financial barriers tend to affect women more than men, especially when they also face cultural resistance to women working outside of the home. For this reason, mentoring is especially important for women in the region as relatively few Arab women are visible in senior corporate roles. The groups and resources are there for mentoring, but more must be done to let women know about them.
Fundamentally, Arab governments, regional non-governmental organizations and the private sector must work together to establish investment programmes and training centres in rural areas and microcredit for small businesses. As more women overcome obstacles to doing business in the MENA region, an improved entrepreneurial, political and social environment for women will follow.