The Surging Tide of Female Entrepreneurship: Navigating EU Policy

Over the past decade, female entrepreneurs have made remarkable strides in the business world, breaking barriers, and reshaping industries. However, like many countries, Portugal has faced its share of challenges in promoting gender equality, particularly in relation to supporting women with family responsibilities. European Union (EU) policy reform has played a crucial role in addressing challenges and creating a more inclusive entrepreneurial ecosystem. Here we will explore the intersection of family law and EU policy concerning female entrepreneurs, highlighting the progress made and the work that remains to be done to create a more equitable environment for women pursuing entrepreneurial ventures within the European Union landscape.

Female entrepreneurs play a vital role in the European Union’s economy. According to the EU Commission, women entrepreneurs account for approximately 30% of all entrepreneurs in the EU. Their contributions are not limited to economic growth; they also promote innovation, diversity, and social inclusion. While the entrepreneurial scene is evolving, women entrepreneurs still face unique challenges that can hinder their growth and success, such as gender bias, difficult access to funding and an unequal pay gap. Recognizing the importance of gender diversity in entrepreneurship, the EU has taken various steps to support and empower women in business.

Challenges Faced by Female Entrepreneurs

1. Gender Bias

Gender stereotypes and biases can affect how women entrepreneurs are perceived and treated, potentially leading to limited access to funding, resources and business opportunities. EU policies have been instrumental in promoting gender equality in the workforce by encouraging companies with more than 250 employees to adopt gender equality plans. The EU has directives on gender pay gap, equal leadership positions, and work-life balance[1]. Such policies not only benefit female entrepreneurs personally, but also contribute to creating a more supportive environment for women. However, it is not mandatory for businesses to follow such directives[2], meaning that unconscious bias within the entrepreneurial landscape may remain to be an issue.

In addition, societal expectations often place the labour of care giving and household chores on women which can undoubtedly affect their ability to focus on their businesses. A study commissioned by the European Parliament found that women entrepreneurs still face unique challenges, such as an unequal pay gap and lack of access to financing[3]. Therefore, the EU has more work to do to challenge gender stereotypes and the socio-economic imbalance between men and women within the historically patriarchal business world.

• Access to Funding

One of the primary challenges for female entrepreneurs is access to capital. In Portugal, women-led startups often face difficulties accessing venture capital and angel investments, which can limit their growth potential. EU policy reform has recognized this issue and has taken steps to address it through establishing programs like the European Structural and Investment Funds (ESIF) and European Investment Fund (EIF). The European Investment Fund (EIF), for instance, has been actively involved in supporting female entrepreneurship by providing loans and guarantees to financial intermediaries[4].

Despite this progress, the European Investment Bank (EIB) has recommended that EU institutions ensure equity in investing in female entrepreneurs[5].This signifies that the EU could consider implementing policies that provide more direct funding opportunities, particularly for working mothers or women experiencing financial distress. Family law issues, such as divorce, child custody battles and childcare support can have a profound impact on the finances of a female entrepreneur. The EU could work to ensure that legal frameworks protect women’s economic interests during challenging times through mediums such as childcare support, or grants and loans.

• Networking Opportunities

Building a robust professional network is essential for any entrepreneur, however women may find it more challenging to establish connections in male-dominated industries. EU-funded projects like the European Institute for Innovation and Technology (EIT) promote networking and mentorship opportunities. Female entrepreneurs can tap into these resources to connect with experienced mentors and like-minded peers.

However, the EU could provide more targeted support. The European Commission has encouraged networking and exchanges of good practices, as well as initiatives that help women build confidence in their abilities[6]. The EU should consider providing targeted support for female entrepreneurs, particularly those who are single mothers, estranged from families or lack a strong support system. Balancing the demands of entrepreneurship with those of family life can be challenging, and opportunities for connecting with others can play a pivotal role in an entrepreneur’s success.

• Access to International Markets

EU membership has opened access to the Single Market, allowing businesses to trade freely within the EU. This presents significant opportunities for female entrepreneurs looking to expand their reach beyond national borders. The OECD has identified the need for public awareness campaigns to promote women’s entrepreneurship[7]. The EU could consider implementing policies that promote awareness of the benefits and the challenges faced by female entrepreneurs which will encourage a more supportive ecosystem where women-led businesses can benefit one another internationally.

Civil Society Organizations such as Make Mothers Matter (MMM) is a prime example of how policy change is generated, through their work of highlighting the concerns of national organizations surrounding mothers at European Institutions. The EU Delegation works to influence EU policies and legislation to bring about positive changes in the lives of mothers.

EU Initiatives Supporting Female Entrepreneurs

Despite many challenges, female entrepreneurs are demonstrating remarkable resilience, innovation, and determination. It ought to be noted the progress in recent years, as the EU takes significant strides towards empowering women across various sectors. We will explore some of the most notable ways and the positive impact of these initiatives.

• Closing the Gender Pay Gap

One of the most critical issues in gender equality is the gender pay gap. In March 2021, the European Parliament and the Council reached an agreement on the Pay Transparency Directive. This directive outlines how companies with over 250 employees should disclose information about the gender pay gap within their organizations. By shedding light on pay disparities, this directive aims to drive change, encourage wage transparency, and empower women to negotiate fair compensation.

• More Women in Leadership Roles

The EU is actively working to increase the representation of women in leadership positions. In December 2020, the EU adopted a Women on Boards Directive. This Directive aims to ensure that women make up at least 40% of non-executive board members in publicly listed companies, significantly improving gender balance in corporate governance.

• Combating Gender-Based Violence

According to the Commission for Citizenship and Gender Equality (CIG), there were 3.7% more complaints for domestic violence in Portugal than 2022. The EU has taken a firm stand against gender-based violence, recognizing it as a severe violation of women’s rights. In 2020, the EU launched its Gender Equality Strategy 2020-2025, which includes measures to prevent and combat gender-based violence. The EU is actively supporting shelters, help lines, and survivor support services to help victims and survivors of gender-based violence.

• Work-life Balance

Balancing work and family life has often been a challenge for women. The Work-Life Balance Directive, adopted in 2019, focuses on improving work-life balance for parents and carers. It includes provisions for paid parental leave and flexible working arrangements, allowing women to pursue their careers while taking care of their families. Many female entrepreneurs may find it difficult to take maternity leave without jeopardizing their business, therefore more flexible options are needed to accommodate entrepreneur’s unique needs.

These initiatives not only empower women individually but also contribute to the overall social and economic development of the EU. As the EU continues its commitment to gender equality, it sends a powerful message to the world that gender equality is not an only an aspiration but a concrete goal that can be achieved through proactive policies and collective efforts.

Conclusion

Overall, the EU could improve its policies to better support female entrepreneurs by increasing access to funding, providing targeted support, addressing the gender gap, fostering a supportive ecosystem, and promoting awareness. However, by addressing issues such as the gender pay gap, increasing women’s representation in leadership roles, combating gender-based violence, promoting work-life balance, and supporting women in entrepreneurship and the digital world, the EU is creating an environment where women can thrive.

As the EU continues to champion gender equality and invest in the potential of its women, the future of female entrepreneurship holds promise for even greater accomplishments and a more inclusive and prosperous society. The empowerment of women is not only a matter of justice; it is an investment in a better future for all.

Kiara Goncalves-Pieniawska

Pagoda Projects

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[1]https://www.consilium.europa.eu/en/press/press-releases/2023/04/24/gender-pay-gap-council-adopts-new-rules-on-pay-transparency/

[2]https://commission.europa.eu/law/law-making-process/types-eu-law_en#:~:text=all%20EU%20countries.-,Directives,objectives%20set%20by%20the%20directive.

[3]https://www.europarl.europa.eu/RegData/etudes/STUD/2021/694301/IPOL_STU(2021)694301_EN.pdf

[4]https://www.eif.org/eif.org/what_we_do/microfinance/progress/progress-microfinance-facility-questions-answers.htm

[5]https://www.eib.org/attachments/lucalli/support_for_female_entrepreneurs_en.pdf

[6]https://single-market-economy.ec.europa.eu/smes/supporting-entrepreneurship/women-entrepreneurs_en

[7]https://link.springer.com/article/10.1007/s11365-021-00751-9