Support or Suffocate: The Case of Ugandan Women Entrepreneurs.

Author(s) FIONA MULIRA*

:
fmulira@yahoo.com
+256712822973
Makerere University Business School, P.O. Box 1337 Kampala, Uganda.
REBECCA NAMATOVU
rybekaz@yahoo.com
+256 712960638
Makerere University Business School, P.O. Box 1337 Kampala, Uganda
SAMUEL DAWA
samdawa@gmail.com
+256 752642040
Makerere University Business School, P.O. Box 1337 Kampala, Uganda

Content area: Entrepreneurial environment and Government policy

Methodological area: Quantitative

Support or Suffocate: The Case of Ugandan Women Entrepreneurs.

Abstract
The aim of this paper is to investigate the entrepreneurial environment and government
policy and how it influences entrepreneurial levels among Ugandan women. This study
derives data from the Global Entrepreneurship Monitor Uganda (GEM) 2003-2009. Findings
revealed that perceptions of womens entrepreneurial environment have changed from
negative to positive especially in the area of providing social services and equal opportunities
for both women and men to start a business. They reveal that although theres an
improvement in government policies that support entrepreneurship, those policies that
regulate entrepreneurship are still lacking. Furthermore the overall entrepreneurial activity
among women in Uganda has increased by 24% with majority being engaged in unproductive
entrepreneurship.

Support or Suffocate: The Case of Ugandan Women Entrepreneurs.

1.0 INTRODUCTION
Entrepreneurial environment refers to a combination of factors that play a role in the
development of entrepreneurship. These factors may be provided by governments in the form
of tax holidays, grants and other incentives, and provide training and counselling services to
start-up entrepreneurs which in turn increase the likelihood of new venture development. In
addition, other factors such as the availability of financial resources, being in large urban
areas, and the presence of universities for training and research are also found to be very
important in increasing the rate of new venture creations (Fogel, 2001).
On the other hand, women entrepreneurship in economic development of any nation has been
documented for its significant contribution. Organisations and businesses owned by women
entrepreneurs are a growing phenomenon around the world today (Davidson and Burke,
2004). As women increasingly select entrepreneurship as a path to business ownership, the
role and importance of the entrepreneurial environment and policy in initiating these new
ventures comes into question. However, several studies have discovered that womens
performance in Africa is still low specifically in the small and micro scale industries
(Makinde & Adetayo, 2005). They face several obstacles including lack of financial
assistance, lack of information on various aspects of business, excessive taxation, and high
rates of inflation (Young and Welsch 1993). Yet, reviewing the empirical literature on women
entrepreneurship in emerging markets, one can observe that there is little research or even
conceptualization of the environment for entrepreneurship (Sannikova, 2007).
In addition, despite the recognized importance of entrepreneurship, there has been relatively
little empirical analysis of the role played by the government-policy environment. This study
therefore examines Ugandan women entrepreneurs, contrasting the entrepreneurial
environment and government policy to the occurrence of entrepreneurship among this group
of women. Two specific research objectives are addressed in this study: To examine the
entrepreneurial environment and the occurrence of entrepreneurship among women in
Uganda. To compare experts perceptions of government policy with the levels of
entrepreneurship among women in Uganda.
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2.0 LITERATURE REVIEW

2.1 Entrepreneurial environment and the occurrence of entrepreneurship
There is agreement among researchers that the more conducive the business environment, the
more likely new businesses will emerge and grow. Individuals are more likely to be
encouraged to start a business when the social environment values entrepreneurship,
opportunities are available, and entrepreneurs have sufficient knowledge and skills to start
and manage a business (Fogel, 2001). The willingness and capability to start a business may
be further enhanced if potential entrepreneurs do not face hurdles during the start-up process
and if they are confident that outside expertise could be obtained easily when necessary.
Governments both directly and indirectly affect the development of an environment that
could support entrepreneurship (Gnyawali & Fogel, 1994).
Sociological theories look at how the environment affects entrepreneurship. These studies
began with McClellands work on the need for achievement (1961) as cited in Chowdry,
2007). He felt that the high economic and social growth in some societies fostered
entrepreneurship. In his view, this growth was owing to a large segment of these societies
having a high need for achievement.
Literature also suggests that the need for the development of a conducive environment may
be greater in emerging market economies and in developing countries because of the low
level of entrepreneurial activities and several environmental hostilities operating in these
countries (El-Namaki, 1988; Segura, 1988 as cited in Gnyawali & Fogel, 1994).
2.2 Government policy and entrepreneurship
Government policies are important in steering entrepreneurship in an economy. The policies
allow potential entrepreneurs to make decisions of engaging in entrepreneurship in their local
environment or elsewhere. If policies are set meticulously, then allocation of entrepreneurial
activity in the economy is done effectively (Bowen & De Clercq, 2008 cited in Minniti,
2008). Research shows that entrepreneurship in developing economies is mainly necessity
driven and is often characterized by low levels of innovation, minimal capital investment, has
high propensity to early demise and as a result is not as productive (Reynolds, 2003). It is
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therefore believed that an improvement in government policies will have a positive influence
on the productivity of entrepreneurship. These policies may include; tax-based incentives,
provision of start-up capital funds, protection of proprietary ideas and innovations;
recognition of and support for, entrepreneurship by government agencies; fostering of
entrepreneurship by educational institutions; and minimization of lead time to acquire
licenses (Goodman, Meany,& Pate (1992) cited in Fogel, 1994).
Studies on government policy and entrepreneurship have evolved over the years, with the
debate diverting from understanding the influence of government policy on productive
entrepreneurship. The arguments have been redirected to other issues, such as whether
government policies indeed influence positive entrepreneurship, and if so, how they do it?
This is an unresolved debate, as different scholarly research and empirical evidence have
provided mixed experiences (Capelleras, Kevin, Greene, & Storey, 2008).
3.0 METHODOLOGY

Data was drawn from two data sets; the Adult population survey (APS) and the National
Expert survey (NES). Both were drawn from that of the Global Entrepreneurship Monitor
Uganda (GEM) 2003, 2004 and 2009. GEM Uganda is part of a research consortium
dedicated to understanding the relationship between entrepreneurship and economic
development. The NES sample size was based on 36 experts who were selected based on
their knowledge of the Ugandan entrepreneurial environment and experience as
entrepreneurs, policy makers or professionals. The sample had 19 men and 17 women. To
determine the occurrence of entrepreneurship, approximately 2600 women were selected
from the APS which had approximately 5095 Ugandans randomly selected from the four
regions of Uganda in three years. Three districts were selected from each region using
probability proportional to size (pps). One parish was sampled per Sub County, one sub
county was sampled per county, and one county was sampled per district, a designated
sample of households was taken within several selected enumeration units in each parish, and
one person selected at random per household.

Findings
Objective 1: Examine the entrepreneurial environment and the occurrence of entrepreneurship
among women in Uganda.

There are sufficient social services

available so that women can continue to
1 work even after they start a family.
2 Starting a new business is a socially
acceptable career option for women.
3 Women are encouraged to become selfemployed or start a new business.
4 Men and women get equally exposed to
good opportunities to start a new
business.
5 Men and women are equally able to start
a new business.

From the diagram above, it shows that the entrepreneurial environment for women in Uganda has
changed from negative to positive over the years. A significant change has occurred on aspects of
availing social services to women even after they start a family and exposure to equal opportunities
with men.
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Objective 2: Compare experts perception of Government policies with the levels of

entrepreneurship among women in Uganda.
SUPPORTIVENESS

The figure above reveals that the experts perception of sufficiency

of government policies, has improved over the years especially the
supportiveness of the policies which are believed to have improved
significant. On the other hand, regulation indicators like ease to get
a license and burden of taxes are perceived to have improved albeit
minimally.

1.

Government policies (e g , public

procurement) consistently favor new firms
2. The support for new and growing firms is a
high priority for policy at the national
government level
3. The support for new and growing firms is a
high priority for policy at the local
government level
REGULATION
4.
5.
6.

The figure above shows that the overall entrepreneurial activity

(growth rate 24%) and necessity entrepreneurship (growth rate
43%) among women in Uganda have been growing over the years.

7.

New firms can get most of the required

permits and licenses in about a week
The amount of taxes is NOT a burden for
new and growing firms
Taxes and other government regulations
are applied to new and growing firms in a
predictable and consistent way
Coping with government bureaucracy,
regulations, and licensing requirements it
is not unduly difficult for new and growing
firms

Although the opportunity entrepreneurship has also improved, it has a low growth rate of 4% in six
years.

Discussion
The findings reveal that the improvement in the business environment is yielding results for
entrepreneurship for women. Over the past few years the government has attempted to enact
favourable policies like Prosperity for All campaigns through distribution of seed capital
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and cultural mindsets are being changed through social programs and awareness campaigns
like Women are not an asset, but Land is an asset women can own. Opportunities
specifically targeting women are common place and even those that are gender blind specify
encouragement of female participants. This is in agreement with Izyumov & Razumnova
(2000) and Bliss & Garrat (2001) as cited in Sannikova (2007) who opined that government
officials and NGOs have expressed interest in women entrepreneurship in countries in
transition as a key to stimulating economies.
These findings are in tandem with Sinnakova (2007) who posited that a facilitative / enabling
policy and the appropriate regulatory environment is crucial for the development of small and
medium enterprises which describes the majority of women owned enterprises that tend to
be smaller (Green et al as cited in Jamali, 2009).
While research may be almost unanimous about the effect of a conducive environment on
occurrence of entrepreneurship, alternative research posits the occurrence of uncertainty
being the fertile conditions for entrepreneurship (Ernst & Young , 2009; Barlett , 2008). It is
probable that the uncertain nature of developing economies and the non-conducive
environments for entrepreneurship may act as a spark for entrepreneurship in these countries.
Further findings also highlighted that even with an improvement in the sufficiency of
government policies the entrepreneurial levels of women in Uganda has increased. However,
the improving levels of entrepreneurial activity has significantly been driven by necessity
which may not necessarily lead to productive entrepreneurial activity. Therefore the
importance of appropriate policies is crucial to churn less productive activities into
productive ones.
In the past few years, Uganda like many other developing economies, has paid increasing
attention to entrepreneurship and has adopted a number of policies aimed at fostering
entrepreneurship. These policies do not seem to tackle the issue of productivity of
entrepreneurship. One of the main hitches to this move is that the Ugandan government has
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adopted the policies as they were drafted by international organizations and even as they
implement them, they are taken in as a one size fits all in the different sectors, geographical
locations and economic strata. However, if entrepreneurial activity is to be allocated to
productive activities, then policy with respect to entrepreneurship, ought to be tailored to the
specific areas in each strata (Wagner & Sternberg, 2004 as cited in Minniti, 2008). In sum,
policies required for the growth of productive entrepreneurship should differ significantly
between the rural and urban areas, extractive and service sectors etc
Conclusion
The research demonstrates the overt importance of the environment in ensuring the
occurrence and the subsistence of entrepreneurship among women. As the environment has
continuously improved over the last seven years there has been a corresponding improvement
in the occurrence of entrepreneurship.
The research further reflects that government policy has been targeting women for
emancipation purposes and subsequent empowerment which has had an effect on
entrepreneurship. Government policies targeting cultural practices repressive towards
women, land and other vital resources that are used in the entrepreneurial process have come
a long way to uplift the position of the woman entrepreneur.
It is therefore recommended that governments should continue to make the environment more
conducive through understanding the unique nature of women entrepreneurial demands.
Government should also implement empirically based policies on women entrepreneurship
for perfect fit between need and demand.

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