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Women's Studies International Forum 34 (2011) 329334

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Women's Studies International Forum


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Female entrepreneurship in the United Arab Emirates: Legislative encouragements and cultural constraints
Valerie Priscilla Goby , Murat Sakir Erogul
College of Business Sciences, Zayed University, P.O. Box 19282, Dubai, United Arab Emirates

s y n o p s i s
Onlookers from outside the Middle East tend to view the region as an essentially hostile environment for women in non-traditional roles. While this perspective may be valid in certain contexts, the United Arab Emirates (UAE) sets new standards of support for women in business ventures as it attempts to engage all its citizens in the economic and social development of this rapidly changing country. The present survey paper overviews for the international reader four key areas affecting the success of UAE female entrepreneurship: (1) the legislative attempts to enhance female entrepreneurial achievement; (2) the socio-cultural realities constraining women in business ventures; (3) the impact of the UAE's strongly collectivist culture on business networking among women; (4) UAE women's motivation for entrepreneurial endeavor given the abundant options for more secure employment. 2011 Elsevier Ltd. All rights reserved.

Introduction The purpose of this survey paper is to highlight for the international reader some of the unique realities which impact on female entrepreneurship in the UAE. These issues depict a scenario of a particular kind of female empowerment against a backdrop of what to Western eyes would be regarded as signicant female disempowerment. What makes the UAE a compelling context for studying female entrepreneurship is that it is a country in which traditional female roles are privileged, yet it is also the country with the world's highest rate of females in third-level education. This latter fact results from government agencies prioritizing female engagement in business and public ventures in the attempt to replace some of the country's vast numbers of foreign workers with UAE citizens. Traditionally social values have curtailed female activity outside the home but recent robust government intervention has sought to mold a rapidly developing economy in which female gures can rise to public forums, while at the same time adhering to traditionally enshrined female roles. In our survey, we look at the

increasingly important activity practice of networking in an environment where female movement is curtailed and family-based and single-gender networking is overriding. We also summarize the factors that motivate Emirati women to become entrepreneurs in a country which offers them more secure sources of income such as the government sector, and we illustrate the empowering role of business education for UAE women.

Business women in UAE history In the pre-oil era, the UAE's economy revolved largely around pearl diving, shing, and maritime trading. These were publicly regarded as strictly male-only activities. However, it was not uncommon to nd women engaging in these commercial pursuits when they had no male provider to help care for their children as a result of divorce, widowhood, or husbands engaging in distant commercial maritime activities (Ebrahim et al., 2008). During this period, some local women owned many ships and others conducted trading (Abu Nasr, Khoury, & Azzam, 1985). However, such women did not negotiate directly with non-related males but required a male family member to act as intermediary. Their

Corresponding author. 0277-5395/$ see front matter 2011 Elsevier Ltd. All rights reserved. doi:10.1016/j.wsif.2011.04.006

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business activities were well tolerated although they did not gain public recognition for them (Soffan, 1980). UAE women in education and the workplace Since the establishment of the United Arab Emirates in 1971, government leaders have expended considerable effort to educate the female population and to facilitate women taking up positions of leadership in business (Nelson, 2004). Sheikh Zayed bin Sultan Al Nahyan, the UAE's founding father, is often quoted with his statement: Women have the right to work everywhere (Women in the United Arab Emirates: A portrait of progress). One result of this initiative is that in 2000 76.8% of UAE university students were female (Al Kassadi, 2000), giving the UAE the world's highest rate of women in higher education (Fergany, 2005). Women are well represented in the local workforce making up 59% of the UAE local labor force across a variety of elds including engineering, science, healthcare, media, computer technology, law, commerce, education, government, and the oil industry (United Arab Emirates Yearbook, 2008). The number of female entrepreneurs compares well with other Gulf Arab states but lags behind other countries with similar levels of GDP per capita such as Norway, Finland, and Singapore (Erogul & McCrohan, 2008). Institutional assistance for the UAE female entrepreneur We know that individual, social, and environmental factors all have a direct bearing on the entrepreneurial process in terms of motivation, innovation, continuity, and expansion (Bygrave, 1994). The common challenges that female entrepreneurs face in many countries are unequal opportunities, poor credibility, lack of recognition (OECD Report, 1998), onerous family responsibilities, skills decits, and gender segregation (Loscocco & Robinson, 1991). Poor access to nancial capital and networks is also a serious primary barrier frequently faced by female entrepreneurs (Gundry, Ben-Yoseph, & Posig, 2002; Weiler & Bernasek, 2001). The UAE government is aware that it needs hard statistical evidence in order to develop effective, femalefriendly initiatives and as part of its efforts to ensure Emirati women play a key role not only in the local arena but throughout the Gulf region, the DWE has initiated several women-centric programs with the active participation of private and public sector organizations (United Arab Emirates Yearbook, 2009: 239). The government report on the status of women (Women in the United Arab Emirates: A portrait of progress. Available at: http://lib.ohchr.org/HRBodies/UPR/Documents/Session3/AE/UPR_UAE_ANNEX3_E.pdf. Accessed 13 December 2008) notes that Having made signicant progress, the UAE does not intend to stagnate with regards to its women's empowerment policies but rather to continue and develop []. The UAE intends to establish a new benchmark for gender empowerment in the region. Several signicant initiatives have been formulated by the government. To assist business women by providing a link to public policy makers, the UAE National Strategy for the Advancement of Women has established businesswomen's councils for each of the Chambers of Commerce and Industry

throughout the seven emirates that make up the UAE. The Abu Dhabi Businesswomen's Group (ADBW) and Dubai Business Women's Council (DBWC) now provide training on entrepreneurship and specic sources of help such as feasibility studies and consulting services for the setting up of businesses including securing nance for small and medium sized ventures. Various government institutions are training women in accounting, marketing, administration, management of resources, leadership, and legal issues to help them succeed as entrepreneurs. One such program is the education of potential female entrepreneurs in collaboration with two major UAE educational institutes, Zayed University and the Higher Colleges of Technology. Companies run by members of the Abu Dhabi Businesswomen's Group offer an Employment Passport, a program established to provide opportunities for graduates to gain work experience. A commercial directory for businesswomen in the UAE was compiled in 2005 by the UAE Businesswomen's Council. In 2004, a special oor for business transactions for women was opened at the Abu Dhabi Securities Market (ADSM) with the aim of encouraging UAE women citizens to participate in the securities market and large numbers of women have taken up this opportunity. In addition, a new inuential measure of excellence known as the Emirates Business Women Award (EBA) was created by Shell Dubai and the Northern Emirates in association with the Dubai Quality Group. In 2005, the National Investor TNI, a UAE Blue Chip Fund, announced the launch of its new TNI Dana Women's Fund worth AED100 million (USD37 million) to encourage women to participate in the region's booming capital markets. The fund is only open to women from the UAE and GCC (Gulf Cooperation Council) countries and provides access to local, regional, and international securities market. The FORSA fund has been set up to cater for women wishing to invest amounts over AED1,000,000 (USD273,000) and ENMAA, a boutique bank, caters to small and large investors in the MENA region (Gallant, Weeks, & Niethammer, 2007). Another recent women-centric scheme is the SOUGHA initiative which supports a revival of home-based Emirati handicraft entrepreneurial ventures by women (http://brand.abudhabi.ae/en/blog/2011/01/24/soughaobad-towards-preserving-traditions-and-heritage/ ). Collectivism, business networking, and gender segregation Hofstede's cultural dimension of collectivism versus individualism is commonly regarded as the single most signicant dimension for studying a culture's conduciveness to entrepreneurial development (Morris, Davis, & Allen, 1994). The UAE represents a strongly collectivist society, that is, one in which people from birth onwards are integrated into strong cohesive ingroups, which throughout people's lifetime continue to protect them in exchange for unquestioning loyalty (Hofstede, 1994: 260). Early research on entrepreneurship postulated that collectivist cultures tend to display lower levels of entrepreneurial drive than individualist cultures such as the USA. However, Morris, Avila, and Allen (1993) have shown that a balance between individualism and collectivism provides the most suitable environment for entrepreneurial endeavor. In explanation of this, Tiessen (1997) suggests that, while individualist cultures

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tend to generate greater levels of creativity among entrepreneurs, collectivist cultures are better suited to promoting successful enterprise through the support provided by efcient and well-established networking systems. While the propensity towards networking exists within the UAE culture, Emirati women engage less in formal networking than their expatriate counterparts and attendees at functions and workshops organized by the Women's Business Council are predominantly expatriate women (Haan, 2004). The reason for the slow uptake by UAE women of networking opportunities might be the historic absence of female networking spaces; in traditional Islamic societies, women have been not only segregated from men, but also from other women through the absence of female gathering spaces (Al-Dabbagh, 2008). The lack of direct access to potential male business contacts has been cited as one of the greatest obstacles faced by female Arab entrepreneurs (Gender entrepreneurship markets, 2007). While the network support systems used by entrepreneurs change according to the level of maturation of an enterprise (Burt, 1992), women typically cite family networks as an ongoing source of support throughout all their entrepreneurial endeavors (Inman, 2000; Maxeld, 2005). Greve and Salaff (2003) observe that, across cultures, enhancing resources and opportunities through personal and professional networkings is a strategy more frequently employed by female than by male entrepreneurs. This is explained by Weiler and Bernasek's (2001) nding that women are frequently excluded from many formal and informal networks both within organizations and as individual entrepreneurs. Carter, Brush, Greene, Gatewood, and Hart (2003) argue that female entrepreneurs require wideranging, diverse networks to allow them to have contacts that will connect them to business equity capital markets. Erogul (2009) illustrates that by increasing interaction and networking, UAE women are able to identify support for overcoming challenges. A similar reality has been identied in a study of the UAE's neighbor, Oman, a country with a lower GDP but much cultural identity (McElwee & Al-Riyami, 2003). In response to the need for female networking in the UAE, the government established an ofcial business network for women in business, professional, and academic positions in 2002. It currently has 12,000 members and holds running investments worth more than US$6.81 billion in various elds, including trade, industry, nance, real estate, tourism, fairs and exhibitions, construction, and services (United Arab Emirates Yearbook, 2008). An indication of the success of this networking group in involving women in business ventures is that 43% of investors in the Securities Market in Abu Dhabi, the UAE capital, are women (Abu Dhabi Businesswomen Council directory, 2005). Networking and start-up capital Emirati women entrepreneurs are inhibited by the precarious view of women in the business roles and they are typically constrained to secure venture capital via personal connections (Preiss & McCrohan, 2006). Haan (2004) found that women typically use their own savings for start-up capital with banks only providing initial funding for 35% of female entrepreneurs. Preiss and McCrohan (2006: 27) explain that in the UAE non-formal sources of capital

often come from what is described as a Business Angel, that is, people with access to unused capital which they seek to invest in a business venture that exhibits the prospect of protability within the foreseeable future. They further explain that business angels may also be acquainted with the business venture owner as a friend, colleague, or even stranger introduced by a third party. However, women may be hampered in their efforts to negotiate with a potential nancier given the restrictions on their movement and mixing with non-family male contacts. Socio-cultural constraints The 2006 Gender Entrepreneurship Markets (GEM) Report ranked female entrepreneurial activity in the UAE last out of the 42 countries assessed. The report claims that within the UAE, women face a number of unique social norms which can make it difcult for them to become involved in entrepreneurial activity. UAE society is strongly inuenced by religion and tradition, especially in respect to women's role in society and, even today, some conservative sections of the society frown upon females running their own businesses. These deep-seated cultural norms make it difcult for female Emiratis to harness their entrepreneurial talents and still meet the demands placed on them by their families and society (Preiss & McCrohan, 2006). Some women face active discouragement from their fathers and husbands (Baud & Mahgoub, 1999). Kourilsky and Walstad (1998) demonstrate that, in general, female entrepreneurs are more conscious of threats to their legitimacy and this diminishes their keenness to become entrepreneurs. This heightened fear of loss of credibility leads many Emirati females to eschew business ventures and opt for government positions (Haan, 2003). Erogul and McCrohan (2008) explain that many families in the UAE prefer their children to gain employment in the public sector. Public sector jobs in the U.A.E. are well known for their generous benets, comfortable working hours, and less demanding work regimes, thus, families tend to disapprove of their child looking towards perceived riskier career in the entrepreneurial domain over a career in the public sector []. Also, given the relatively small Emirati population, news of failure [in entrepreneurial ventures] may also quickly permeate the close-knit national community, thus, avoiding the risk of failure seems to be the option of choice. A study conducted by Baud and Mahgoub (1999) found that more than a quarter of female Emirati respondents believed that their families should give them more support and their husbands needed to be more aware and offer their permission to them to begin their businesses. Nelson (2004) points out that unknown numbers of women hesitate to embark on entrepreneurship because support is not forthcoming. However, for Emirati women already engaged in entrepreneurial ventures, Erogul and McCrohan's (2008) study revealed that 55% of female Emirati entrepreneurs' primary providers of support were family members and 27% were their husbands. Sayed (2002) argues that the issue of gender relations is paramount in the UAE given that its business culture is based almost entirely on the building of successful interpersonal relationships. Whiteoak, Crawford, and Mapstone (2006) believe that attitudes of men in the UAE may harden as women continue to surpass men in gaining

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educational qualications and, as a consequence, have greater access to meaningful employment opportunities, for which they are likely to be better qualied. This could present a backlash effect to the current progress of women in business. Signicantly, the government drive to assist women in business is not about gender neutrality, and the priority is still to allow women to ll public roles while adhering to culturally prescribed norms for females as indicated in the following statement of policy (italics ours): Contributing to policy-making and legislation that will enhance the role of Emirati women in society and encourage them to become a driving force in development is at the core of the Dubai Women Establishment's strategy for 2008 to 2012. The goal of the strategy, which contains a ve-pronged approach, is to nd a balance between work and home life, provide continuous opportunities for women in training and work, nurture leadership, and enhance the image of UAE national women. The strategy focuses on the adoption of national development policies to increase the contribution of Emirati women to the economy, the launching of national programs that help these women reach leadership positions, as well as introducing economic policies to enable women to work from home. The objective is to introduce new policies and support services that remove barriers towards women's progression and growth in the workplace, especially in the private sector, and an increase in the number of women returning to work after starting a family. DWE is committed to helping women tap opportunities in all domains while seeking new horizons. Increased acknowledgment of the contributions and accomplishments of women, improved visibility of role models and mentors and increased inspiration and motivation to encourage women to reach their full potential will help in achieving this (United Arab Emirates Yearbook 2009: 238).

(9%), wish to increase income (7%), aim for a higher standard of living (6%), and lack of other employment (6%). One of the most common reasons cited by female entrepreneurs internationally for starting up their own business is the desire for independence (Deng, Hassan, & Jivan, 1995; LeeGosselin & Gris, 1990). This has been found to be the case in both individualist cultures such as Australia (Breen, Calvert, & Oliver, 1993) and collectivist cultures such as Singapore (Maysami & Goby, 1999). Abbey (2002) tested the impact of collectivist versus individualist cultural leanings in a comparative study of US and Ghanaian entrepreneurs and found that entrepreneurs within the individualist culture of the US were motivated strongly by personal development while those in the collectivist Ghanaian culture were motivated by group goals. Both these sources of motivation, personal development and contribution to society, were cited by the female UAE entrepreneurs interviewed in the study by Erogul and McCrohan (2008). Impact of education on the entrepreneurial drive Education has often been found to exert a restraining inuence on the entrepreneurial spirit. For example, in Singapore, a collectivist culture displaying a high level of fear of failure, graduates typically eschew entrepreneurial activities in favor of secure salaries (Wong, Wong, Kwan, & Gansham, 1994). However, in the case of the UAE, a high level of education appears to encourage entrepreneurial drive in women as it functions as personal evidence of being equipped to undertake business enterprise (Erogul & McCrohan, 2008; Nelson, 2004). This conrms Mueller and Thomas's (2001: 51) nding that: To be motivated to act, potential entrepreneurs must perceive themselves as capable and psychologically equipped to face the challenges of a global, competitive marketplace. Business education can play an important role in this regard by providing not only the technical tools (i.e. accounting, marketing, nance, etc.), but by also helping to reorient individuals toward self reliance, independent action, creativity, and exible thinking. Recommendations for further study Emirati women are active in traditional female sectors of the economy but the challenge is for them to move away from home-based, low-value sectors and become signicant players in high value, innovative entrepreneurial activity. The literature abounds in such generalities as women need support from family, yet the authors found little research devoted to how individual women manage to secure such support within Middle Eastern contexts. Exploring how some women succeed in doing this will contribute to entrepreneurship theory and make it possible to provide a model to facilitate aspiring women entrepreneurs to engage in building their own models of entrepreneurship. Case studies documenting demographics, family attitudes, educational achievement, and early entrepreneurial activity could be compiled to provide road maps for individual women and for more tailored institutional support. Part of this engineering of attitudinal change could be the implementation of public awareness campaigns to encourage the acceptance of female business activities by large sectors of the population. An analogous government initiative in the past contributed to a vast increase in the number of females completing third-level education. Namely, a major university

Motivation of female entrepreneurs There is a wide range of research that suggests that motivation to engage in entrepreneurship is similar for men and women with factors such as wanting to be independent and a need for achievement featuring strongly for both genders (Buttner, 1993; Orhan & Scott, 2001). For some women, the motivation for entrepreneurship arises from negative conditions, while for others by positive opportunities (Langenfeld, 1999). McCrohan, Erogul, Vellinga, and Tong (2009) conrm that female Emirati entrepreneurs are highly driven by opportunity. Haan (2004) interviewed 30 UAE women entrepreneurs on their motivation to establish a business. Twentyfour percent of interviewees stated additional income as their primary motivation, 24% regarded their venture as a hobby, 18%, their wish to create a successful SME, 16%, as their desire to gain business experience, and 12% as a response to a marketing opportunity. In contrast to these ndings, Erogul and McCrohan's (2008) respondents revealed that the principal factors motivating them to become entrepreneurs included an aspiration for independence (24%), a desire to contribute to society (19%), and a wish for self improvement (13%), professional development (11%), current job dissatisfaction

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for women was set up (Zayed University with campuses in the two major cities of Dubai and Abu Dhabi) which controlled student movement through monitored entry and exit and university bus usage and this encouraged even very conservative families to permit their daughters to undertake full-time university study. That is, once the fear of allowing their daughters unknown freedoms was removed, families felt comfortable allowing them to be outside close family control for the purpose of pursuing their studies. Given the signicant role that bank lending plays in providing nance to entrepreneurs it is important to gain a better insight into the extent of bank lending to female entrepreneurs within the UAE. The UAE banking and nance sectors are amongst the fastest growing in the nancial world. Yet currently commercial banks, nancial and investment companies, and other nancial institutions are not subjected to UAE Central Bank licensing. The role of commercial banks in nancing entrepreneurial projects is of strategic importance for future UAE economic growth as well as a crucial factor in assisting female entrepreneurial activity by facilitating venture capital loans to women. Further research into the role of networking for women within societies practicing gender segregation would increase our understanding of how culturally appropriate networking systems could be established to enhance female entrepreneurship success. Perhaps the computer-mediated networking opportunities made available by IT advancements may pave the way for greater female entrepreneurial success in societies practicing segregation of the sexes although even virtual interactions between males and females are regarded as inappropriate by more conservative sectors of UAE society. Again the documenting of case studies of female entrepreneurs engaging in networking would help us understand the opportunities and constraints relating to this crucial feature of business activity. The situation of women creating and leading new business ventures within Middle Eastern societies could be viewed as an example of glocalization. This term was coined by Robertson (1992: 174175) to refer to the real world endeavors of individuals and social groups to ground or to recontextualize global phenomena or macroscopic processes with respect to local cultures. The UAE is likely to present us with an example of glocalized business practices as its business women grapple with different hurdles from their Western counterparts to achieve success in the global business world. References
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