It seems like today, everyone is talking about startups. Economic, academic, and educational entities focus increasingly on generating startups and empowering entrepreneurs. A startup is essentially a new idea, rooted in innovation or a unique solution that is scalable, stiving to disrupt the global market, and eventually aiming to exit by being acquired by a large international corporation or going on the public stock exchange. What began as a localized trend in Silicon Valley and in specific sectors of software and tech, has become a worldwide phenomenon, and in some cases, an ideal career path that offers independence, creativity, vision, and global influence for its founders. So where are all the women founders?
Over the last two decades, the Middle East region has jumped on the startup bandwagon, with various countries striving to create their very own local ecosystems of innovation and entrepreneurship. The GCC has been leading this trend,[1] with vibrant and quickly expanding ecosystems that house a range of startups in the realms of eCommerce, fintech, transport and delivery, agriculture, and more. The exponential growth in size and quantity of our region’s startups is due to international trends and growing interest in the MENA markets, increased funding, government support, offering the opportunity for many creative thinkers from all over the region and from previously marginalized groups to play a leadership role in the economy.
But the sad truth is, only about 14% of the region’s startups are led by women, and only 1 in 7 investments is in women-led companies,[2] although women surpass men in graduation rates by over 100%.[3] Women in the Middle East are becoming increasingly educated, with more and more access to information and media, but are still lagging behind in entrepreneurship.
The reasons for this imbalance can be traced to cultural and social norms, as well as the lack of female leaders in the private sector (which is gradually changing), to act as role models for young women and potential aspiring innovators. Additionally, investors worldwide are less likely to fund women-led companies, an unfortunate reality proven time and again, even in the most progressive ecosystems.
Regardless of the reasons why women currently lag behind men in the startup scene, it is clear that women have infinite potential, and could easily help the region compete with international innovation ecosystems. But perhaps more significantly, women in our region are naturally entrepreneurial, as they need to overcome so many social and cultural challenges in order to build successful careers, that they develop keen problem-solving skills and creative approaches to challenges. As MENA women are offered more opportunities, they are still expected to play traditional roles, leading many to adopt multitasking capabilities, sporting different identities and roles by morning, afternoon, and evening in order to keep up. By the nature of how women function, the challenges we face, and the multifaceted roles we play, we should be leading the ecosystem in innovative solutions, business models, and strategies.
The difference between a startup and a regular company is that a startup strives to create a completely new template of behavior, whether it pertains to consumption, spending, production, or lifestyle, and the business model must be creative enough to consider how this new behavior will be widely accessible and adaptable. This requires out-of-the-box thinking, and the ability to constantly incorporate new information and adapt to trends. Proven to be highly resourceful and skilled at multitasking, especially in societies where women often maintain household responsibilities, women are excellent entrepreneurs by nature and are able to consider various human factors – in addition to market considerations – that could affect how a startup might scale and succeed.
Startups led by women have shown that they raise less, spend less, and outperform those led by men by over 60% in terms of return on investment.[4] This success can often be attributed to the fact that women need to overcome many more obstacles than men in order to gain funding, whether they are obstacles of a male-dominated sector, family restraints, or societal norms. By the time a woman obtains a meeting with an investor, she knows her chances are slimmer, and so she will come dually prepared.
In a region like ours where there are so many practical challenges in bringing new products to the market, including widespread regulations, diversity among local markets, the lack of currency unity, and low confidence from corporate actors in local innovation, startups need to be especially resilient and efficiently led. Women have proven to maintain more participative, adaptable, and innovative leadership styles, and are thus especially fit to scale in challenging regions like ours.[5]
The inclusion of women in the innovation ecosystem is not just a matter of gender equality but also holds the potential to benefit the collective. Analysis shows that if women and men participated equally as entrepreneurs, global gross domestic product (GDP) could rise by approximately 3-6%, boosting the global economy by $2.5 trillion to $5 trillion, bringing more prosperity to underrepresented parts of the world.[6]
The underrepresentation of women in the region’s startup ecosystem is bound to change, especially as state and corporate efforts to empower women increase, such as the new requirement in the UAE for all listed companies to have at least one woman on their board.[7] Platforms like DANA, an Abu Dhabi-based accelerator for women-led startups in desert tech, are key in bringing more awareness, collective efforts, and resources to the potential of female founders.
References:
[1] https://datatechvibe.com/data/menas-startup-ecosystem-heating-up-gaining-ground/
[2] https://www.arabianbusiness.com/startup/457147-why-more-support-is-still-needed-for-women-led-start-ups-in-the-uae
[3] https://www.brookings.edu/blog/education-plus-development/2015/03/12/unlocking-the-potential-of-educated-arab-women/
[4] https://www.shecapital.vc/blog.html
[5] https://www.hbs.edu/faculty/Shared%20Documents/conferences/2013-w50-research-symposium/eagly.pdf
[6] https://www.wamda.com/2020/03/problem-women-entrepreneurs
[7] https://www.arabianbusiness.com/culture-society/460311-uae-listed-companies-now-require-at-least-one-woman-to-sit-on-boards
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