Women entrepreneurship in Estonia

The role of women for the Estonian economy is still underestimated. Gender stereotypes lead to a significantly lower number of female entrepreneurs in Estonia and are responsible for a strong gender segregation. While the level of education for women entrepreneurs is considerably increasing, they are still underrepresented in managerial positions. However, although NGOs are fighting for women’s rights, the Estonian society still has a long way to go to clear its structural obstacles to gender equality.

Women entrepreneurship in Estonia is generally not recognised as an important driver of economic growth. The contribution of women-led businesses to the Estonian economy is largely under-researched and unmeasured. The Estonian Government has no track record in developing women’s enterprise policy and the gender issues are not in the focus in developing entrepreneurship and businesses. The common standpoint is that all possibilities are open to all people, not depending on their gender and therefore it is their personal choice to use the possibilities or not.

Compared to the EU average, entrepreneurship and self-employment is not wide spread in Estonia. In 2012 4.6% of women and 11.8% of men were self-employed, while in the EU-28 the share of self-employment reached 9.9% for women and 18.4% for men[1]. The results of the Global Entrepreneurship Monitor 2012: The Estonian Report[2] (GEM Report 2012) indicates that there are more men among entrepreneurs than women. This tendency becomes more pronounced along with the maturity level of companies: among aspiring entrepreneurs, there are 1.4 men to every woman, whereas among established entrepreneurs, men outnumber women by 2.5 times. Moreover, there are twice as many men among early stage entrepreneurs as there are women.

According to Eurostat data, in 2012, Estonia was home to 15,000 women entrepreneurs, including 4,000 employers. Therefore, the vast majority of women entrepreneurs (71%) are a solo-entrepreneur without any personnel or family workers. Since 2003, the number of women entrepreneurs in Estonia has declined by 3%, while the number of men entrepreneurs increased by 14% during this period. The average growth of women entrepreneurs in Estonia is less than the EU-28 average for the same period. In Estonia women entrepreneurs constitute about 5% of the women in employment, which is significantly inferior to the EU-28 average (10%).

It is difficult to explain why the number of women entrepreneurs is so low and has diminished during the last decade as no analysis has been conducted concerningthis topic. However, it can be assumed that barriers which prevent becoming an entrepreneur are particularly high for women in Estonia. There are still relatively strong gender stereotypes supported by Estonians, which result in gender segregation both in education and in the labour market. Estonia holds first place in Europe for both horizontal and vertical gender segregation[3]. In Estonia the average education level of women entrepreneurs is higher compared to men. Tertiary educational attainment for the age group 15-64 in 2013 was 25% for men and 41% for women. Both figures are higher than the EU-28 respective averages (23.7% and 26.8%), but the rate of Estonian women (41%) remarkably exceeds the average of the EU-28 (26.8%) and is the highest in the EU[4]. In the last 10 years the education level of Estonian women entrepreneurs has improved considerably.

Despite a high education level, Estonian women are pooled in certain sectors such as education, wholesale and retail trade, health care and social work, public administration, and accommodation and food services[5]. With a background in these fields, it is not easy to start own businesses. Women might face potential barriers meaning that they cannot make use of their education and previous work experience in entrepreneurship so easily. Moreover, the glass ceiling in Estonia results in the fact that women are underrepresented in managerial positions. The study by Anspal, Kraut and Rõõm (2010)[6] indicates that men predominate amongst managers in general, entirely adding up to two-thirds. This is especially remarkable since women have a higher education level than men. This term does not mean a situation where progression is hindered by the person’s own limited capability for working in a senior position, but artificially-created obstacles for women as a group.

Regarding the contribution of women and men entrepreneurs to the economy, there is inconsistent information about the net income level of women and men. GEM Report 2012 results indicate that men receive more profit from entrepreneurship than women and only a fifth of those whose monthly net income is over €1,500 are women[7]. At the same time, the Eurostat data for 2012 indicate that the mean net income of women entrepreneurs (€ 8,688) is higher than that of men entrepreneurs (€ 8,118) in Estonia. Considering that the gender pay gap is the largest in Europe[8] these figures are surprising. Still, a recent study finds that women entrepreneurs’ income does not differ from male entrepreneurs’ income[9]. Apparently, women are able to make use of their skills in a more productive way as entrepreneurs compared to being employed somewhere else.

Accordingly, it can be argued that the low number of women entrepreneurs is not due to a lack of education and skills, but might be caused by other reasons such as stereotypes, lacking ambition, a lack of access to capital and information, family obligations, etc. Eurobarometer 2009 showed that there were still several attitudes in place which inhibit achieving gender equality at the workplace. For instance, 69% of Estonian inhabitants agree that it is normal that women work less than men; 40% agree that women are less interested in positions of responsibility than men. Gender Equality Monitoring 2009[10] also showed that 53% of the Estonian population believe that men are better leaders than women and 36% agree that in case of a shortage of jobs, men have the prerogative for those jobs. Moreover, children are raised in the spirit of traditional gender roles – Estonians regard cooking, taking care of one’s appearance and cleaning as much more significant skills for girls than for boys. At the same time, handling technical equipment or driving a car are skills important to learn for boys, but not for girls[11].

Against this background, women often face different barriers and circumstances than men when starting a business. However, the Estonian economic policy, including enterprise policy, is not concentrated on exploiting and advancing the underdeveloped potential of the female work force. Accordingly, the women entrepreneurship in Estonia is promoted and supported mainly by NGOs (e.g. by providing micro credit, projects of training, mentorship). The oldest non-profit organisation, which aims to promote and encourage women entrepreneurship – Women’s Training Centre (“Naiskoolituse keskus”) – was established in the early 1990s. It focuses on implementing projects, providing training and developing networks aimed at empowering women. It works under the slogan “A Better Future for Women”. The Women’s Training Centre has from the very start of its operations been in the forefront of new developments introducing new topics and methods into the Estonian context, areas of expertise and learning with no or very little expertise available locally. Among these areas are business training and mentoring for women, gender equality and gender mainstreaming, women’s economic and political empowerment and targeted interventions to provide women career guidance and counselling; and most recently promoting dialogical communication.

Estonia is also a member of NGO QUIN (Qvinnliga Uppfinnare I Norden = Innovative Women in the North) network, which was established in 1992 in Sweden and registered in April 2001 in Estonia. NGO QUIN-Estonia is a network of creative and innovative women. The main aim of activities of QUIN-Estonia is enhancing the participation of women in innovation and improving realising of innovative ideas in female entrepreneurship in Estonia. QUIN-Estonia has supported EU co-operation projects at Tallinn Technical University related to innovative approaches between universities and entrepreneurs.

In 2006, the non-profit organisation ETNA Estonia (MTÜ ETNA Eestimaal) was established to support female entrepreneurship in rural areas that often face strong barriers to entry in starting or expanding their businesses. In partnership with the Rural Life Promotion Loan and Savings Association, ETNA Estonia launched the project ETNA Mikrokrediit (Microcredit) in 2012. The project lasted from 01.06.2012 to 31.01.2014. Microcredit provides low-interest loans and flexible financing opportunities to women in rural areas who intend to start their own business or expand their business activities. A study on female entrepreneurs by Talves and Laas (2005)[12] indicated that most women considered financial constraints as the main obstacle for starting and developing businesses. Also, four-fifths of the female entrepreneurs in rural areas are in such financial state that they do not meet the usual requirements of the banks to receive a loan. Therefore, the project of Microcredit tackles one of the most important obstacles in female entrepreneurship. Also, the employment in rural areas is a more problematic aspect than in urban areas. However, the idea is not new in Estonia, the first microcredit loan group was established already in 1999 and it was funded by the Nordic Council of Ministers in all three Baltic countries. Later there have been also other short-term projects involving the organisation of loan groups.

In general, the ETNA Estonia brings together women who are interested in the development of small scale enterprises and female entrepreneurship in all regions of Estonia, in order to support rural life, also to balance the development between urban and rural areas and to promote gender equality in society. It is a member of international women’s information centres organisation WINNET and starting in 2010 – a member of NENO.

As pointed out earlier, there is no gender specific policy and legislation as known in Europe in Estonia, but a gender equality infrastructure consisting of relevant bodies and legal acts is in place. In 2004, the Gender Equality Act and in 2009 the Equal Treatment Act were enacted. There is a Department for Gender Equality at the Ministry of Social Affairs that is responsible for gender equality policies and there is also a Gender Equality and Equal Treatment Commissioner. This position was created with the adoption of the Gender Equality Act in 2004. In 2009, the Equal Treatment Act was enacted and the Commissioner became also responsible for monitoring compliance with this law: the title changed into Gender Equality and Equal Treatment Commissioner. The Equal Treatment Act has a broader aim to ensure the protection of persons against discrimination on the grounds of nationality, race, colour, religion or other beliefs, age, disability or sexual orientation. The priorities of the Commissioner in the field of gender equality have been the gender wage gap, poor health of men and domestic violence[13]. Thus, the focus at the government level in gender issues is on social not economic aspects.

This provides reasons for discussing the role of women in business and in entrepreneurship. It is important to bear in mind the different needs and social status of women and men in shaping national policies, strategies and activities and also take into account how implemented measures influence the situation of women and men in a society. In general, Estonians are not aware that gender is a factor that may pose an obstacle in achieving certain things or an implicit factor in making choices. The common attitude is that the small number of women entrepreneurs is a free choice of women and a lack of aspiration to be entrepreneurs. The role of structural obstacles or cultural beliefs is seldom understood. In order to move towards a larger use of women’s potential in economic activity, awareness raising campaigns are necessary to make the society realise and discuss the significance of gender equality issues. Increasing the share of women among entrepreneurs can be achieved through promoting and supporting the start of the business in sectors with high value added (e.g. ICT and creative industries) and rural areas, where women could realise their unused potential.

Fotocredit: VISITFLANDERS via Flickr

 

Footnotes:
1) Study on the area F of the Beijing Platform for Action: Women and the Economy. ANNEX 2 – COUNTRY FICHE PART A – ESTONIA. IRS, EIGE/2013/OPER/02
2) Global Entrepreneurship Monitor 2012: The Estonian Report. Estonian Development Fund, 2013
3) Anspal, S., Kraut, L., Rõõm, T. (2010). Sooline palgalõhe Eestis: empiiriline analüüs (Gender Pay Gap in Estonia: empirical analysis). Uuringuraport. Eesti Rakendusuuringute Keskus CentAR, Poliitikauuringute Keskus Praxis, Sotsiaalministeerium. http://www.sm.ee/fileadmin/ meedia/Dokumendid/V2ljaanded/Publikatsioonid/2011/Gender_pay_gap_Estonia_analysis.pdf
4) Marre Karu. Country Fiches on Gender Equality and Policy Developments. European Networks of Experts on Gender Equality ENEGE, 2Q2014.
5) Statistics Estonia, Estonian Labour Force Survey 2012.
6) Anspal, S., Kraut, L., Rõõm, T. (2010).
7) Global Entrepreneurship Monitor 2012: The Estonian Report. Estonian Development Fund, 2013
8) Anspal, S., Kraut, L., Rõõm, T. (2010).
9) Skills’ usefulness at labour market. Praxis Centre for Policy Studies, Estonian Center for Applied Research. Forthcoming in 2014.
10) Vainu, V., Järviste, L., and Biin, H. (2010) Soolise võrdõiguslikkuse monitooring 2009:
uuringuraport. Sotsiaalministeerium, 1/2010.
11) Ibid.
12) Talves, K.; Laas, A. (2005). Maanaiste ettevõtlus. FEM projekti uuringu aruanne. http://digar.nlib.ee/digar/show/?id=37374
13) Marre Karu. “Tilliga ja tillita“ – a low budget provocative culinary awareness campaign. Exchange of good practices on gender equality. Discussion paper on the seminar ’Equal Pay Days’, Estonia ,18-19 June 2013

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