Hi There,
China is not exactly a country known for an equitable representation of gender. Yet China now has more self-made women billionaires than anywhere else in the world, with 78 compared with just 25 in the US and 5 in the UK.
Why does China produce such an impressive number of female entrepreneurs? Is it a coincidence that women in China have been afforded more opportunities than women in other parts of the world or is there something deeper going on?
If you take a long look at their single child policy and the impact it has had on gender ratio, it would become very clear. There are approximately 105 males for every 100 females. This ratio can be as high as 110 males for every 100 males if one were to break down the numbers further on the population pyramid.
However, according to Global Entrepreneurship Monitor, an index that monitors startup activity, for every 10 men starting a business in China, there are 8 women doing the same. Which is considerably higher than the global standards. So there is clearly an interesting story to be told between these two numbers. It is a story which clearly illustrates the behavioural lens and its use for certain aspects of public policy.
Let us get into it.
Two-thirds of the most prosperous female business owners in the world are from China. In China, 55% of internet businesses are owned by women, and e-commerce is growing at an exponential rate. There's no doubt that Chinese women business owners add enormous value to society.
The Hurun Richest Self-Made Women in the World 2022, is a list of self-made female billionaires from across the globe. The list has been published for the past 11 years. According to the list, there were a record 124 self-made women business owners in 2022.
“The self-made women billionaires in the world tell the story of the most successful women in business and these stories start with China. Why does China have two thirds of the world's self-made women billionaires, more than double the rest of the world combined? There are historical, political, social and economic dynamics at play here. One indicator can be seen from the Hurun China Private Companies SDG Readiness Index 2021, where Chinese businesses performed strongly in United Nations Sustainable Development Goal 5 Gender Equality.”
Firstly, there are historical factors that have contributed to the success of Chinese women businesswomen such as legal reforms that empowered women in the 1980s and 1990s and the opening up of China to the West in the last few decades that have enabled them to access the same opportunities as men. It all started with the first leader of China, Mao Zedong and his famous “women hold up half the sky” at the start of the cultural revolution which in 1968 lead to the one-child policy of China.
The singular focus on increasing the productivity of the economy in China ensured that the female labour participation was around 80%, markedly higher than the United Kingdom which was at 60%, and an economy like India where it was hovering at 30%. So clearly there was an emphasis on female participation in the economy.
The implication of the one-child policy in the 1980s led to a vast disparity between the sexes in China in terms of gender ratios and as a result, the number of women who could afford to attend school increased rapidly compared to the number for men. As a result, many women who have now become successful entrepreneurs graduated college and went on to study further at universities overseas in order to obtain an MBA or PhD. This was a marked change from the earlier generation where female participation in high sciences, and technology was not encouraged.
In addition, there have been a number of policies and initiatives that have been put in place by the government over the years to encourage more women to become entrepreneurs and business owners such as the National Women’s Fund that supports women-owned businesses and enterprises and grants business loans, as well as funding from other sources such as the Entrepreneurship Training Program for Women that provides scholarships to help women train in business skills in order to become successful entrepreneurs.Secondly, there are a number of political and economic factors at play that are contributing to the success of the Chinese women entrepreneurs such as the rapid economic growth of the last two decades which has given rise to a booming economy which has created greater opportunities for these women to capitalise on.
Over half of China's 1.4 billion people make them a huge market for entrepreneurs trying to reach their target audience. Despite this large potential market, there has been little research conducted to understand how and why women are more successful than men as entrepreneurs in China.
Historically, most female-led firms in Asia were established out of need, but this is changing in the fast-rising economies of Malaysia, Vietnam, Thailand, and China, where opportunity reasons are stronger. Female entrepreneurs outperform their male counterparts in these countries, taking bigger risks and making bolder decisions to attain higher success. The number of highly trained female employees is quickly growing, particularly in Asian urban areas. Despite being better represented in management than their Western counterparts, Asian women struggle to make it to the top, which motivates them to start their own companies.
In Asia, female entrepreneurs value independence, confidence, and dignity, despite having poor educational backgrounds. For many, having the opportunity to give back instead of having to ask others is extremely fulfilling. They see their business as an opportunity to socialize, learn new skills, and expand their knowledge.
Culture and its effects on female entrepreneurship:
The most significant influencing factors for female entrepreneurs in Asia are Eastern cultural values and the importance they place on work-related norms and management skills. Women, especially in China, follow the traditional rules of tolerance, cooperation, and dedication to maintain their relationships with others. These features certainly help entrepreneurs in Asia to create tolerant and harmonious corporate cultures, resulting in higher success rates and satisfied employees and customers. Research shows female entrepreneurs to be more persistent than male entrepreneurs, paying more attention to long-term benefits and the development of the company. They strive for their business ideals despite temporary difficulties and setbacks, while making every business decision very carefully and pursuing realistic objectives.
Several studies have suggested that Asian women become entrepreneurs due to gender inequality in the workplace. As women's career advancement options are limited by the glass ceiling, or simply discrimination at work.
The sociocultural system influences women's entrepreneurial drive by establishing and altering society norms and attitudes. This effect is particularly pronounced in the Asian context. Women have less authority in the home as a result of patriarchal societies. This frequently confines females to the role of carers, who spend more time than men on unpaid domestic housework. Women who operate their own businesses can work on a more flexible schedule. As a result, work-family conflict is a major motivator for Asian women to start their own businesses.
Workplace discrimination, gender inequity, and work-family conflict all play a role in their entrepreneurial goals. Additionally, increased investment in entrepreneurship education in Asian nations is encouraging women's entrepreneurial motivation.
A review of the research on female entrepreneurship in Asia shows the role that socioeconomic context plays in influencing women's entrepreneurial motivation. It's important to note that, despite the economic growth many Asian countries have experienced, gender inequalities still drive women to start businesses. As a result of these inequalities, women tend to work hard to get recognised, involving themselves in entrepreneurial ventures to get better.
Being pushed into entrepreneurial activities by their circumstances and facing constraints during this process, female entrepreneurs in Asia are likely to launch various kinds of businesses. Individual motivation may have a significant impact on the entrepreneurial process and the type of business established. Therefore, researchers must further explore the myriad social and organisational cultural practices that affect entrepreneurial motivations in the Asian context. Studying female entrepreneurs from the perspective of opportunity recognition especially is likely to add to existing theorising.
Further exploring the specific circumstances that foster opportunity-driven entrepreneurship in Asia would be interesting. Additionally, in an environment that constrains women, studying the mechanisms of opportunity identification and how they differ from those in the Western context is likely to yield useful findings.
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