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More room to grow for female entrepreneurship in the technology sector

May 19, 2015 by Yuen Sin

Opportunities for female entreprenuership in China’s technology sector are growing, as Alibaba’s Jack Ma noted. However, they have yet to be fully exploited – what measures need to be taken to address this gender gap?

Chinese women have become “superwomen”, capable of being both responsible mothers and successful entrepreneurs, Alibaba’s founder Jack Ma famously declared last September.

Indeed, a growing number of female entrepreneurs in the technology sector have become prominent in China in recent years, including Peggy Yu Yu, co-founder of China’s largest online bookseller Dangdang, and Haiyan Gong, founder of Jiayuan.com, a Chinese version of the dating site Match.com. Still, does Ma’s observation, reminiscent of Chairman Mao’s famous proclamation that “women hold up half the sky”, hold true for general trends of female entrepreneurship in the technology sector? Opportunities are abound in the industry for budding female entrepreneurs, but overall figures still point to the persistence of a gender gap reflective of a worldwide “pervasive techgap” in access to information and communication technologies in the world.

 The male-female entrepreneurial gap widened between 2002 and 2009, increasing gender-based inequality, the Global Entrepreneurship Monitor reported. However, this did not reflect a decline in female entrepreneurial activity, observes Tonia Warnecke, professor of social entrepreneurship and business at Rollins College. Instead, what it illustrates is a larger increase in male entrepreneurial activity relative to female entrepreneurial activity during the period.

 “This can be explained by several factors including men’s greater access to financial resources and networking support, along with gendered stereotypes of domestic work and entrepreneurship which continue to impact women’s role at home and in Chinese society,” Warnecke explained.

E-commerce Potential

Among various industries in the science and technology industry, the e-commerce sector holds some of the greatest potential for female entrepreneurs. Jack Ma has noted that e-commerce is very much built around user experience, which women have a “natural intuition” for. Data from Alibaba shows that female shop owners account for 55 percent of online stalls on Taobao.com and Tmall.com, Alibaba’s two online shopping websites, and they have advantages in seling female clothing and cosmestics. Over 1 million female clothing shop owners exist on Taobao.com, 0.2 million more than shops owned by males, and they also have a slightly higher rate of positive reviews than their male counterparts. Women are also the ones shaping the consumer market, with many women viewing online shopping as an essential part of their lifestyle. Consultancy Observer Solutions found that over 60 percent of Chinese online consumers spent more than RMB 3,000 (US$483) on the internet, in 2013 alone with the majority of them being female.

How can female representation in the technology sector get a leg up, particularly at the top levels of the corporate hierarchy? Wang Zhizhen, former vice Chairman of the Chinese Academy of Sciences in Guiyang, has revealed that women account for about 40% of the total workforce in the Chinese science and technology sector-, yet only 5% occupy positions at the highest ranks. Drawing on examples of successful female entrepreneurs might shed some light on this picture. Rollins College professors Wenxian Zheng and Ilan Alon told China Outlook that their research indicates how “successful female entrepreneurs in China appear to be well educated, mostly married and politically shrewd, they seem to enjoy strong family support and benefit greatly from extensive personal networks”. 

Overcoming the Bamboo Ceiling

This finding is reitereated by Warnecke, who notes that “women have unequal access to guanxi networks in China, and this is one constraint for female entreprneurs today”. LeanInBeijing, a recently-founded women’s professional networking group, has also identified the “bamboo ceiling” as an obstacle for Chinese women’s professional development. The bamboo ceiling refers to the phenomenon of how children in Asian families are less likely to fight for their own interests and self-promote.

 Formal business networking groups and mentoring programs can prove to be very helpful for female entrepreneurs to overcome these hurdles. Calls for more of such female-focused professional networking groups have also been made in order to advance women’s interests across various industries and sectors, including technology. In 2010, former reporter Jing Zhou, who founded elemoon, a fashion wearable startup that bridges art and technology, launched the Chinese chapter of GirlsInTech, a global organization that aims to empower women with technology for entrepreneurship and innovation. Groups like this are all the more vital in China given the relatively more significant importance of access to guanxi networks when it comes to securing funding support or professional advice.

Many women still face constraints when it comes to securing funding for tech ventures. While China has no separate national network for angel investors, it is part of the international investors organization, the Angel Investment Network. Female entrepreneurs, however, still possess low credibility compared to their male counterparts, thus making the process of reaching out to venture capital investors a difficult one.

 Multiple start-up accelerators and incubators are a viable alternative for aspiring entrepreneurs, which will allow these women to receive a three-month long mentorship, office space, funding and the chance of presenting their idea to a group of investors in order to secure funding and support. This then provides them with ways to avoid general social constraints faced by women in the funding process. Incubators refer to programmes that offer space without time constraints imposed, without direct involvement in the growth of the start-up. Accelerators, on the other hand, are directly involved with the growth of the start-up through the provision of services or mentoring.

 A range of incubators and accelarators currently exist in China, such as the Beijing-based Innovation Works, an incubator with an accelerator programme, or Dalian-based ChinaAccelerator. China Daily has reported the launch of 150 business start-up incubators in 2011 that are targeted at Chinese students who have studied abroad, a strategy that both functions as an incentive to woo overseas students home and banks on past experiences of successful entrepreneurs, many of whom have been exposed to different cultural attitudes and networks in start-up oriented countries like the United States. Successful female entrepreneurs like Peggy Yu Yu, Zheng and Alon point out, are aided by their professional experiences overseas. Yu obtained her degree in English Literature from the Beijing Foreign Studies University, before receiving her MBA from NYU and working for a Wall Street consulting firm specializing in mergers and acquisitions. Jing Zhou, founder of elemoon, had also worked and studied in the States before launching her start-up via a successful Kickstarter campaign.

 Entrepreneurship programs need not be confined just to urban zones and opportunity-focused entrpreneurship too, Warnecke notes. “For technology and innovation, there are numerous opportunities in rural areas as well as in urban centers; some examples include improving women’s access to mobile phones, computers, and the internet, as well as innovation in other areas including clean water access, eco-friendly businesses, and the use of technology in education and health care. Information and communications technology provision should be paired with workshops on using technology effectively for business development and management.”

In order for those in rural areas to shift away from necessity-based entrepreneurship to more lucrative, opportunity-based entrpereneurship, entrepreneurship training should include leadership, administrative capacity, management, and negotiation skills, and provide hands-on workshop opportunities for applying learned skills, Warnecke adds.

“It is also important to understand that education and basic business training alone do not necessarily enable individuals to recognize opportunities and exploit them (which characterizes opportunity-based entrepreneurship).”

Zheng and Alon conclude that both opportunities and challenges lie ahead for female entrepreneurs in the technology sector. “We believe that aspiring Chinese women must have a clear vision, sheer determination and perseverance to move forward, and they must also possess a sense of aggressiveness and decision-making competence in order to achieve desirable business objectives.”

 

Tags: Gender,


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