Women Entrepreneurship in
Central and Eastern Europe
the hierarchy of economic organizations was supposedly ensured without discrimination. Yet, there was a marked contrast between theory and practice: y The Communist Party instituted a command economy which left no room for autonomy or initiative. y Being responsible for housework and child care, most women were faced with a “double shift,” with negative effects on their professional careers. y As men with a patriarchal mentality dominated upper management, the main criteria for promoting women as managers was their conformity to authority. y Women working in teams with men who had the same or similar qualifications were typically assigned secondary roles, thus preserving gender discrimination. Organizations that constitute civil society can play an important role in overcoming these inherited barriers. Rediscovering the virtues and responsibilities of citizenship, various groups sharing common goals have begun reshaping the system. However, few of the newly established voluntary, nonprofit organizations are so-called “women’s organizations.” Only lately have women’s organizations—calling themselves
by Maria Sandor
fter the collapse of the communist system, an increasing number of women in Central and Eastern Europe have made the conscious decision to direct their own economic destiny. In part, this trend reflects the greater opportunities for personal initiative, creativity, and leadership that are available to women who found their own small enterprises. Yet while recent economic reforms promise improved living standards in the future, the negative effects of the region’s move to a market economy, such as increased unemployment and poverty, disproportionately affect women. In addition, strained state budgets leave little funding available to support women entrepreneurs. Consequently, women will have to do much on their own initiative to build women business owner networks.
Challenges to Women
“national associations”—become aware of their lack of representation and power and started to set up local branches.
The Need for Associations
The communist system stressed egalitarianism and conformity. Accordingly, women’s promotion in
Maria Sandor headed the UNDP Gender and Development Project in Romania. She is a co-founder of the Center for Political Studies and Comparative Analysis, an independent Romanian think tank.
The overall impact of womenowned enterprises is significant. Their businesses stimulate economic growth, provide services and, more importantly, generate income for a population increasingly affected by unemployment and poverty. Many vital social services are now provided by women-owned companies. In the democratic policymaking process, women’s voices need to be heard. The most efficient way of participating in the policymaking process is through independent, private, and nonprofit institutions created by women themselves. Through their associations and grassroots initiatives, women can exert political influence on legislative proposals that affect their interests. They can educate government agencies about the growing importance of women entrepreneurs, exert pressure for the creation of government programs to support women entrepreneurs or lobby directly for institutional changes that support women. The main challenge for women entrepreneurs in Central and Eastern Europe is not only to set up successful businesses but to establish effi-
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cient voluntary associations that actively participate in the policymaking process during the current economic transition. However, for such associations to be effective they should mobilize sufficient human and financial resources; handle efficiently their financial and management problems; know how to define their mission and objectives in order to market their services; and develop promotional and advocacy strategies and policies. Presently, the organizations representing various women groups are either inefficient or nonexistent.
Women Entrepreneurs in Romania
own business enterprises. ¢ Very few women entrepreneurs are aware that they could help themselves and contribute to the policymaking process by establishing their own effective associations. The following results of the WED programs in Romania offer a useful framework for developing women’s business associations in other countries in the region:
¢ Few of the women who assumed the risk of starting their own business benefit from programs designed to increase their capabilities and skills in running a small business venture. ¢ Few business women have access to updated information about available financing schemes and how to apply for them. ¢ Many women in the region are seeking economic independence but few of them have the courage or the proper knowledge to create their
ECONOMIC REFORM TODAY NUMBER TWO 1997
Photo: Jean Rogers
Due to the continuing deterioration of the conditions for women in Romania, the United Nations Development Program (UNDP), together with the Romanian Ministry of Labor and Social Protection, initiated the Gender in Development Project in 1994. The project’s goal was not only to promote women’s rights but also to identify ways to utilize women’s potential to accelerate the reform process. “Women’s Entrepreneurship Development” (WED) was the generic title given to action programs addressing specific problems encountered by various women groups. The initiative for developing such programs was based on several assumptions:
u Developing gender awareness One of the main barriers to developing a women’s movement in the region is the reluctance of women to associate themselves with “feminist” ideas and to identify themselves as a marginal group opposed to men. The lack of gender awareness in these societies is also one of the residual effects of the past. As a group who lacks self-confidence, most women still need to develop the determination to change. Individuals discourage each other, and they have very low self-esteem. Despite these obstacles, women entrepreneurs tend to be the real engine for both economic and Women need to build their own association networks. social change. Highly educated and professionally active, they have also initiated changes to continue meeting informally after improve their own economic destiny. the WED program ended. Ileana Having to adapt and become more Tudor reported, “We did not want to flexible, women are quickly learning have an association of only women. that associations of individuals shar- It does not seem to be fair to our ing common interests and needs men. And most of all, we did not bring visibility, influence, and power. want to be labeled as ‘feminists.’ Some of the women who partici- According to the constitution, we pated in the WED programs noted have equal rights and we have equal-
that they were not only developing business skills, but they also were becoming more aware about the role of gender in everyday life. “Every evening I shared with my husband what happened in the WED program. We are both in the business sector and the topics addressed during the day helped us a lot. And for the first time we started talking about traditional mentalities and family responsibilities. He agreed to share the household chores with me and to support me more,” said Mihaela Moldovan. While not wanting to be identified as activists, other women wanted to
ly suffered under the Ceausescu regime. Yet, I agree that women have to bear the burden of all the household work, which is not fair, and I am surprised there are so few women in the parliament and no woman is in the government.” Although not in favor of a women’s business associa-
participants, the training provided them with new skills, helped them identify new marketing strategies, and improved their managerial abilities. The best candidates for further professional development programs were sent to visit similar private companies in the United Kingdom
noon discussions and debates allowed women to learn from each other and also to find understanding and to gain more courage. The final day of the program was usually reserved for a discussion with a successful local business woman. Sharing her experience, her failures
“I think women have additional qualities—creativity and perseverance—which help them in starting small businesses and then successfully developing them. On the other hand, they still need encouragement, support and even more, traditional training programs. I do believe that women are a huge potential resource for economic growth, but I also think that in order to mobilize this resource, we should first of all provide information and educational programs for the entrepreneurial development of women.” —Petre Roman Former Prime Minister of Romania and current President of the Romanian Senate
tion, she added that she would like to meet with her fellow business women more often to learn from their experiences on how to improve her life. u Developing capabilities and skills Before starting to organize women entrepreneurs in associations the first priority should be to provide opportunities for more women to develop and use their entrepreneurial drive in successfully initiating private businesses. There are several excellent examples of programs that are helping women to sharpen their skills. For example, 190 women who had registered small private companies in the six major industrial cities in Romania attended a six-day WED training program. (More than 450 applied for the program, and most of them are still on the waiting list.) According to statements from the
while others received concessionary loans from the Romanian Development Agency. The effectiveness of the entrepreneurial training was acknowledged by Simona Dolga, an engineer who started two private small manufacturing companies in Brasov: “If I had participated in this training two years ago before starting my companies, my effort would have been halved and my profits would have been doubled.” Another one of the participants was selected by the WED program leaders as a model of a successful business woman because her company’s profits increased sixfold after the training. Interviews with the WED training program participants revealed that they all felt some of the major obstacles to overcome when starting a business are “inner barriers”: fear of failure and the lack of courage, moral support or role models. The after-
and successes, she was an important role model and source of inspiration to the others. Under another WED training program, 150 unemployed women university graduates attended a six-day seminar in either Bucharest or Constanta. The objective was to raise their awareness about different business opportunities. They were trained to identify and develop their own business and creative skills, offered counseling and trained in interviewing techniques. They were then introduced to successful business women, and for the first time encouraged to use some of their unemployment benefits to finance their own small businesses. u Founding grassroots associations As Roxana Popa explained, “Meeting with other women every day for six days was wonderful [so] we will continue to meet once a
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week.” Indeed, these WED program participants have since established grassroots organizations in Iasi, Oradea, and Brasov. They still need additional support and technical assistance to make these associations truly effective. In Bucharest, the managers of the WED programs invited several successful business women, women bank managers, and officials of one of the privatization funds to a luncheon. Since then, they have continued to meet on a more or less regular basis, thereby creating a new network of women in business and banking.
Media Blitz Pays Off
their contact with other economic policy organizations, a workshop was scheduled for the final day of the program where various officials from the private, public, and nonprofit sectors participated. Prior to the meeting, participants were asked to participate in a WED survey and their answers were analyzed and discussed during the workshop. Preliminary local strategies were also developed. To support the creation of a network of the organizations serving women entrepreneurs in Central and
most of the Central and Eastern European countries, are designed to service all types of prospective business people. However, during the conference several of them reported that their female clientele grew from 30% to 50% over the last four years. Most of these women entrepreneurs were young, and about 30% of them had created businesses in the service sector of the economy. The conference participants also discussed the idea of creating a regional information and resource center, as well as developing a net-
Two weeks prior to the startup of the first WED program, its managers organized a strong media campaign to gain public support and understanding for women entrepreneurship and networking. There was also media coverage during the program, talk shows on local radio and TV stations, and profiles of local business women in the local press. The publicity helped the program participants in networking and marketing their products. There also were two roundtables held on the availability of inexpensive financing for women’s enterprises. Participants included the managers of the low-interest loan programs of the major banks, officers of the relevant government agencies, women entrepreneurs, representatives of women associations, and representatives of several multilateral donor agencies. The debates were broadcast on national television; again raising public awareness of the critical problems facing women in business. u Ensuring local and national networking The WED program enabled many of its participants to meet for the first time, even though they lived in the same city. In order to facilitate
Especially during the startup period, some of the barriers business women face are lack of resources and business skills and very limited access to credit and market information. These constraints create challenges for establishing success-oriented businesses instead of survival-oriented ones.
—Aniko Soltesz , SEED
Eastern Europe, in August 1995 a regional conference on women and entrepreneurship was held in cooperation with the Black Sea University and with financing from the Soros Foundation. The conference drew 38 participants from several Eastern European countries (Romania, Moldova, Ukraine, Hungary, Slovakia, Latvia, Lithuania, Estonia, and Albania) to discuss new approaches for working with women and ways to spur regional cooperation. Many of the conference participants were business consultants affiliated with small and medium business development centers. Others represented women’s associations in the region. These development centers, which were established several years ago in
work of trainers and supporters for women in business. The center could support the network with relevant information by setting up and updating a database on initiatives in this part of the world. u Raising governmental awareness As a result of the workshops that evaluated the WED programs and its follow-up media campaign, important government initiatives were undertaken. For example, the Department for Small and Medium Size Enterprises within the Romanian Agency for Development started a gender evaluation of its lowinterest loan programs and set up mechanisms to ensure greater access by women entrepreneurs. The Ministry of Labor and Social Protection
ECONOMIC REFORM TODAY NUMBER TWO 1997
made a regulatory change—first proposed during the WED program sessions—to allow people on unemployment assistance to use those payments to start their own business. Finally, the National Registry of Trade and Industry introduced a new registration form that facilitates tracking of women business owners while the Romanian National Program on Local Employment Initiative now includes in its loan criteria the business and training initiatives of local women associations or of informal women’s groups. Meanwhile, several women entrepreneurs have taken a direct route to attempt to change government policies. For instance, Ana Maria Biris, a business woman and a former mem-
ber of the municipal council in Satu Mare, successfully ran for a seat in the Romanian parliament last November. The more successful in business they are, the more women entrepreneurs are being courted by various political parties to join them and to be candidates for local or national positions. While most business women are still reluctant to run for office or to become heavily involved in politics, many have concluded that women will continue to be treated as a minority if they are not involved in the policymaking process.
Women Helping Themselves
Women entrepreneurs in Central and Eastern Europe face a multitude of challenges in coaxing beleaguered
policymakers into responding to their concerns. Changes in the economies of this region translate into fewer job opportunities in traditional sectors of the economy, while government restructuring means assistance to private enterprise will be eliminated or reduced. Nevertheless, the potential contribution women entrepreneurs can make to stabilizing these countries’ economies through job creation makes a strong case for policymakers to pay attention to them. But if women are to succeed as leaders in business, then they are going to have help themselves by building strong networks and associations to serve as their tools.
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