Academic journal article International Journal of Entrepreneurship

Saudi Arabian Female Startups Status Quo

Academic journal article International Journal of Entrepreneurship

Saudi Arabian Female Startups Status Quo

Article excerpt


There is general agreement among management practitioners and researchers that successful new ventures contribute to employment, political and social stability, innovation and competition (Thurik & Wennekers, 2004; Zedtwitz, 2003; Hoffman et al., 1998; and Dunkelberg, 1995). Similarly, the success of small and medium enterprises (SME's) is also largely attributed to entrepreneurial activities (Dyer and Ha-Brookshire, 2008).

Entrepreneurship has also become a defining business trend in many countries. We know that entrepreneurship is most successful in an ecosystem where it is supported at both the strategic level (by governmental organizations) and the institutional level (Khan, 2013 a). The long list of entrepreneurs world-wide now contains a sizable contingent of women (Dechant and Al-Lamky, 2005). As a result, research into the pathways of entrepreneurship as a general phenomenon, as well as a career option for women, has flourished in recent years (see, for example, Dechant and Al-Lamky, 2005; Minniti 2010). However, very little of this research has focused on female entrepreneurs in Arab countries, where now private enterprises (SME's and entrepreneurial ventures) are viewed as a way for these nations to reduce their reliance on oil and dependence on an expatriate workforce.

Many authors argue that women entrepreneurs can be instrumental in developing emerging economies. However, it is noticed that there is a lack of studies that can be used to assess the experience of women entrepreneurs in Arab countries--especially Saudi Arabia. A study conducted to understand women entrepreneurship in UAE and Saudi Arabia (Al Lamky 2005). However, the number of studies and the context of the research on Arab women have been limited.


Studies on Women Entrepreneurship in the Arab Region

The literature has often ignored the role of values in determining the choices of women entrepreneurs. Studies such as Gennari and Lotti (2013) and Fagenson (1993), asserted that women join the work force out of a need for achievement and respect in society. Recent studies show a major factor influencing women entrepreneurs is the level of constraints for women in the workforce (Elisabeth and Berger 2016. In some countries women have no access to capital or bank loans, while men have this advantage (Lilia 2014).

Education and Employment

A recent report from the World Bank (2012) analysed data from over 5000 companies in the Middle East and found that women owned approximately 13% of all firms and of these female-owned firms, only 8% were micro firms (with <10 employees), while over 30% had more than 250 employees. There appears to be a relationship between education and entrepreneurial activity. The 2012 GEM Report on women entrepreneurs demonstrated that in most regions, women entrepreneurs are more likely to have post-secondary education than women who are not entrepreneurs (30% vs. 26% for MENA/Mid-Asia) and more likely than male entrepreneurs (30% vs. 26% for MENA/Mid-Asia). For a comparison, 70% of female entrepreneurs in the U.S. and 55% in Israel have a post-secondary degree (Minniti, 2010). This agrees with work of Mark et al. (2006) who found that the average level of education among women entrepreneurs in developed countries was higher than their counterparts in developing countries, including Arab nations. Earlier studies, like Aldrich et al., 1998 had been inconsistent about education and business ownership. Sharpe and Schroeder (2016) analyzed data from the World Bank and found that unemployment among women in the Middle East is relatively high, although it differs by country. It has been lower over the past five years in Lebanon, Israel and Qatar (2-12%), compared to Egypt, Saudi Arabia and Jordan (14-28%).

Unemployment rates arise from numerous challenges that women face in the Middle East. These insights combined with the restrictions for women in banking and ownership make starting companies more difficult for women than for men. …

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