Africa’s entrepreneurship landscape could be set to rapidly change for women, if its women ‘gazelle’ entrepreneurs are supported in their efforts to spearhead a new spirit of innovation and growth across the continent. Gazelle entrepreneurs are defined as those businesses that have increased their revenues 20% annually for at least four years, starting from a base of US$1 million. Here in Africa, women gazelles are high-impact entrepreneurs, and represent a different breed of woman entrepreneur on the continent.
The metaphor is highly appropriate in the African context - like a gazelle, these women entrepreneurs have the ability to run fast and jump high to reach their goals; they are innovative, developing and getting their ideas to market quickly; they look to scale rapidly, disrupting markets and gaining marketshare as they go.
A gazelle is an extremely fast-growing company, which maintains consistent expansion of both employment and turnover over a prolonged period. There is no single definition of what constitutes an “exceptional” growth rate, but 20% and more per annum is a common definition.
Africa’s women gazelles are key to building a healthy, entrepreneurial eco-system that supports not just the high-potential women-owned companies which are capable of driving rapid growth and job creation, but also the vast number of small to medium sized women entrepreneurial ventures that have the potential to grow substantially over time.
The recently-published 2015 Female Entrepreneurship Index, researched and written by Siri Terjesen and Ainsley Lloyd for GEDI (The Global Entrepreneurship and Development Index), analysed the conditions that foster high potential female entrepreneurship through a survey of 77 countries. The results are fascinating and give an insight into the increasingly important role played by women in helping to grow the economies of their countries and communities. High potential female entrepreneurs are identified as being market expanding, export oriented, innovative entrepreneurs, creating new ideas and new approaches to doing things differently. What is also interesting is that through their entrepreneurial activities, these gazelles and the other high-potential female entrepreneurs, are not only increasing their own economic welfare, but at the same time improving the economic and social fabric of society through job creation, innovative products, processes, and services, and cross-border trade.
Critical to the success of growing the numbers of Africa’s women ‘gazelles’ and other high-impact and high-potential women entrepreneurs is creating the right economic and cultural conditions for them to really drive this new women’s entrepreneurial spirit on the continent.
By doing so, they will actively support those who are aspirant to follow in their footsteps and create the next generation of high impact women-owned businesses. The bottom line, however, is that the current significant barriers to entry for all women entrepreneurs in Africa need to be removed if more women gazelles and high impact women entrepreneurs are going to be created. They need to be given the right environment in which to thrive and really make a difference to the entrepreneurial landscape of their countries. Africa undoubtedly has the numbers of women entrepreneurs in its favour. Another recent research survey, conducted by UK-based business-networking group, Approved Index, ranked Uganda as first in the world for having the most entrepreneurs per capita. Three further African countries, Cameroon, Angola and Botswana, also occupied places amongst the top nine countries in the global research list with the most entrepreneurs, many of them women.
In Africa, there are still too many significant barriers to entry that exist for many women entrepreneurs to fulfil their potential and create the high impact businesses they are capable of. The fact that in Uganda for example, 40% of all businesses are owned by women but 93% of the credit for all businesses goes to men, is a sobering reality.
However, the key to rapid entrepreneurial growth for women in Africa is innovation, and this comes with its own challenges. Because of their need for speed, innovation-led women-owned enterprises require substantial expertise, capital, and specialist human talent early in their life cycle. Like every entrepreneur, these women gazelles need to be able to find the right resource to feed their entrepreneurial needs at the right time. But unlike other entrepreneurs, they often need specialized information and resources. Before they can hit the ground running, these innovation-led enterprises must market their groundbreaking new products or ideas, find the financing, access key skills and expertise, check their differentiation in the marketplace, and so much more.
In its fascinating 2010 report: “High-Growth Firms and the Future of the American Economy”, the Kauffman Foundation makes these observations on the tangible economic growth impact of gazelle companies. Firstly, in any given year, the top-performing 1 percent of companies generate roughly 40 percent of all new jobs. Gazelle” firms (ages three to five) comprise less than 1 percent of all companies, yet interestingly generate roughly 10 percent of new jobs in any given year. The "average" firm in this top 1 percent contributes 88 jobs per year, and most end up with between 20 and 249 employees. This statistic is in stark comparison to the average firm in the economy as a whole, which typically adds two or three net new jobs each year.
So what does all this mean for women entrepreneurs in Africa and its potential women gazelles of the future? Innovators are critical to the continent’s economic growth, and if Africa’s innovative women entrepreneurs are going to become the high growth, high impact gazelles both now and in the future, they need the kind of support that can help them remove barriers to entry and growth, and move to market quickly. The raw pool of women’s entrepreneurial talent already exists on the continent, after all, Africa has some of the largest numbers of women entrepreneurs anywhere in the world, albeit currently, many of them fall into the survivalist entrepreneurship category. But, if the right conditions are created, and the socio-economic and cultural barriers to entry are lifted in countries across the African continent, then many of these women can make the move from survivalist, to sustainable, and hopefully high-impact entrepreneurs of the future.
In the final analysis, it is all about greatest impact. We know that entrepreneurship creates jobs, stimulates economic growth, and encourages innovation. We know that women entrepreneurs have the greatest impact on uplifting societies and communities. We know that sub-Saharan Africa has the highest proportion of women entrepreneurs in the world (GEMGR - Global Entrepreneurship Monitor Global Report 2013) - overall, the continent has a much higher proportion of female entrepreneurs compared to other regions, with Nigeria and Zambia (both 40.7%) coming on top and countries like the United States (10.4%), the UK (5.5%), Norway (3.6%) and France (3.1%) lagging far behind. It is clear that women can add incrementally to a developing nation's economy and the development of the next generation of citizens. For example, women spend a far greater percentage of their wages on the next generation than men do, according to research generated by EY in its report ‘Unleashing the Power of Women Entrepreneurs’.
So, just as there is almost always a multiplier effect when a woman moves into the workforce in terms of investing their income in improving the lives of their children and families through better food, housing, education and economic prospects, then surely the same is true for women entrepreneurs. If we do everything we can to lift the barriers to entry for women entrepreneurs, and particularly women gazelles in Africa, to fulfil their potential and enhance their success prospects, then everyone benefits? The question is, therefore, why is it not happening faster, and where is the support needed for Africa’s women gazelles to fulfil their potential today, and tomorrow?
THE EDIT is a blog by Melanie Hawken founder and editor-in-chief of Lionesses of Africa. Melanie is a passionate supporter of women's entrepreneurship across Africa and is on a mission to build a powerful community to inspire the Continent's next generation of women entrepreneurs. The Edit features opinion, commentary and analysis on a wide range of topics of interest to today’s women entrepreneurs on the African continent. You can follow Lionesses of Africa's Website | Community Platform | Twitter | Facebook | Instagram | Google+
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