Spotlight on female entrepreneurs

Download article in original language : IT0505106FIT.DOC

The first report on female entrepreneurship in Italy was published in January 2005. The report, entitled Impresa in genere, commissioned by the Ministry of Productive Activities and UnionCamere, analyses the problems, the structure and the motivating factors behind women-run companies in Italy.

Background

The rate of employment among women in Italy is only 42.7%, while in the European Union the average stands at 56.1%. This makes Italy the country with the lowest female employment rate in the EU. One of the reasons which might explain the low rate of women’s participation in the labour market is the low level of part-time employment. While 34% of women in the EU have a part-time job, in Italy only 17.2% do. The gender unemployment gap is also more accentuated in Italy than in the EU, the EU difference between men’s and women’s unemployment standing at 2.2%, while in Italy it is 4.8% (women’s unemployment being 11.3% and men’s 6.5%).

Yet thanks to recent policies supporting the employment of women in Italy, the employment rate of women has increased by five percentage points over the last 10 years. Law 215 of 1992 was specifically concerned with the promotion of women’s entrepreneurial activities, and has proved particularly significant and effective.

In January 2005, the Ministry of Productive Activities, UnionCamere and the Committee for Female Entrepreneurship published jointly the first report on women’s entrepreneurial activities, entitled Impresa in genere. For the first time, the report provides a comprehensive picture of the women’s entrepreneurial world and highlights achievements and related difficulties.

Definition of female-owned companies

The Observatory on Female Entrepreneurship, established and managed by InfoCamere, according to guidelines set down in Law 215/92, considers a company to be a female-owned company if the participation of women in the company’s management/body is over 50%. This definition is accompanied by a classification of female-owned companies based on the rate of women’s participation within the company, where participation is 'majority', 'strong' or 'exclusive'. When women own the company or occupy the managerial roles, the participation in the company is classified as exclusive.

The analysis of the data collected by the Observatory (up to December 2005) show that female-owned companies represent 23.5% (1,174,53) of the total number of companies in Italy (4,995,738). Southern Italy is the geographical area which has the highest incidence of female-owned companies (25.8%) followed by north-western Italy (24.7%) and central Italy (19.6%). In contrast, the regional sub-division of Lombardy recorded the highest concentration with 13.1% female-owned companies present in the region.

The majority of companies are less than 13 years old (in line with the current high turnover rates of companies generally), and are mainly found in commerce (31.9%) and in agriculture (23.8%), but they are also significantly present in other sectors of activity, such as in manufacturing (10.6%), real estate (9.5%) and the public, social and personal service sector (8.9%). A lower presence of female-owned companies is recorded in the hotel and restaurant sector (6.8%).

If the commerce sector in Italy is the sector with the highest relative majority of female-owned companies, the public, social and personal services sector is the one with the highest 'feminisation' rate (about 47%), i.e. the ratio between female-owned companies active in December 2003 and the total active companies recorded in the same period. This sector is followed by the health care and social services sector (38.5%), household care services sector (36.2%), education (6%), hotels and restaurants (33.5%), agriculture (28.7%) and commerce (26.9%).

Profile and size of the companies

The majority of female-owned companies have a simple legal status: 93% of female-owned companies in Italy are one-woman businesses, where the owner is a physical person and is also the employer (74%, more than 850,000 units) or part of a partnership (19.6%) which includes ordinary partnership, limited partnerships, unregistered companies, informal partnerships, irregular partnerships, societies among professional persons and co-ownership of inheritance. The majority of these female-owned companies are 'exclusive' female-owned companies.

The analysis of female-owned companies per the presence or non-presence of stock capital shows that about 69% of the total number of female-owned companies do not have stock capital, although there are relevant differences at regional level. In Lombardy, for example, less than one out of two companies has stock capital, followed by Trentino Alto Adige and Tuscany. According to the report, the presence/absence of stock capital is mainly determined by the main type of female-owned company, i.e. a one-woman business. If we exclude the companies without stock capital (about 60%), the majority of the remaining companies have a stock capital that does not exceed EUR 15,000.

About 3,298,369 (33.8% of the total) of women occupy managerial positions in the company, and these are mainly concentrated in the north-western regions, particularly in Lombardy (17.9%), followed by central Italy (21.5%) and the north-east (21.1%). Among the principal characteristics, it is interesting to note the composition of women managers by age: 52.2% of managers are aged between 30 and 49 years, one-third are aged between 50 and 69, and more than 6% are over 70 years of age. Young managers (aged between 18 and 29) number about 300,000 (9.5% of the total number of managers).

The data about women managers’ nationality in Italian female-owned companies show that 94.6% are Italian, 2.9% are non-EU citizens, 1.3% are EU citizens and the remaining 1.2% have an unclassified origin.

Motivating factors and challenges

The desire for autonomy and independence, a higher quality of work, greater freedom and control over one’s job and life and social recognition are cited as the motivating factors behind women choosing to run their own business. Women may decide to become an entrepreneur because of the need (difficulty in finding a job), because they have the opportunity to do so (very often linked to a family tradition) or because they just were attracted by the entrepreneurial path.

According to the study, one of the main motives that leads a woman to open a business is the family tradition (47.9%), followed by the need for employment (37.4%) (particularly in southern regions and in the islands, 47%), the desire for autonomy, usually in the north and in the north-west (40.7%), together with the possession of specific skills, the need for economic independence and income improvement.

The results of the report underline that one of the strengths of female-owned companies is women’s determination in pursuing the entrepreneurial goal: women employers are more aware, compared to men, of their specific skills (54.8% against 32.3%) and committed to achieving their objectives/desires (41.3% against 31.9%).

The report analyses the problems in the set-up and launch of a business. Women employers have stressed the primary and positive role played by the family network in supporting them in starting their businesses (56.6%, 41.6% for men). As underlined in the report, this indicates that for women the family is more important in terms of cultural resources and strong interpersonal links. The research has also underlined that women are more inclined to ask for support from the sectoral associations and trade union organisations.

However, strong motives and adequate preparation are often not sufficient to overcome some obstacles, such as raising funds, acquiring clients and the lack of services which constitute the main obstacles for new entrepreneurs, irrespective of gender.

Nevertheless, women employers stress the problem, which tends to pertain more to women, of the need to combine employment and private life (16.6%). Family is not only a support, it is also a constraint. Women in the north-west (47.6%), as well as those living in the south (46.9%), find more difficulties in raising funds for their businesses, while in the centre the problem is more linked to the acquisition of clients (35.4%) and to the need to combine private and professional life (25.9%).

The access to credit still remains a central problem when starting a business and is a decisive element in determining the success of an entrepreneurial activity. The results of the research stressed that women’s companies tend to resort more to the capital provided by their family/friends network and to bank credit (particularly in the north-east, 56.3%, and in the centre 38.7%), but also to their own funds, especially during the start-up phase. The low level of bank loans among female entrepreneurs seems to stem from the difficulty of women’s companies in providing the requested guarantees and by the lack of economic expediency .

Commentary

Women’s entrepreneurial activity represents an opportunity for many women to achieve professional gratification and self-fulfilment from the cultural and personal points of view. However, there are a number of obstacles that can hinder and make the relationship between women and employment and the professional paths of women employers more difficult.

Combining professional and private life is still a problem for many women. While job opportunities for women are on the increase, women still have to face a social and organisational reality that makes the choice of wanting to be a mother and entrepreneur at the same time very difficult. Starting and running a business in a social climate still resistant to the idea of an effective gender equality can present a challenge.

What are needed are policies and actions to support the current positive trends, as well as practical solutions to the problems which are hindering the full development and use of feminine resources, in order to guarantee a more equal, harmonious economic, professional and social development of the country.

Investing energies, resources and faith in women could give rise to a new pact based on the solidarity between women and men, mothers and fathers, sons and daughters, rich and poor regions, between those who have the money and do not invest it and those who have the capacity for social and economic initiative and ask for support. (Domenico Paparella, Cesos)