Swarna Jayaweera

edited by

Gerry Finnegan

Senior Small Enterprise and Management Development Specialist

ILO-SAAT

Project RAS/92/M12/SWC

Funded by Swedish International Development Cooperation Agency (Sida)

International Labour Organisation

South Asia Multidisciplinary Advisory Team (ILO-SAAT)

PO Box 643, New Delhi 110001

INDIA

Tel: 91.11.4602010/2/3

Fax: 91.11.4602111 or 4647973

July 1996

Table of Contents:

Foreword

Introduction

Barriers to entry and performance facing women entrepreneurs

Gender Dimensions of entrepreneurial characteristics

Review of supply side opportunities

Experiences: From self-employment to entreprneurship

Issues and Concerns

References

FOREWORD

This project for the promotion of entrepreneurship among women in small and cottage industries (RAS1921M121SWC) is funded by the Swedish International Development Cooperation Agency (Sida) and executed by the South Asia Miltidisciplinary Advisory Team of the International Labour Organisation, ILO, SAAT, based in New Delhi.

One of the key activities undertaken under this project has been to commission country studies to assess the status - barriers and constraints, as well as opportunities and support mechanisms - of women's enterpreneurship in each of the five participating countries, viz. India, Nepal, Philippines, Sri Lanka and 7hailan£L This paper is the first in this series of studies to be published by ILO-SAAT 7he report has been authored by Dr. Swama Jayaweera in accordance with terms of reference provided to her and all of the authors of the country studies.

This report brings together a considerable amount of information on various entrepreneurship and women's development programmes which have been formulated in Sri Lanka since independence, as well as assessing the extent and the quality of women's participation in these programmes. 77ze situation is updated by providing an assessment of the current position of women entrepreneurs in Sri Lanka. The paper provides a framework for assessing the situation facing women entrepreneurs, based on an analysis of key supply and demand factors. 7he importance of cultural traditions, gender socialization processes, education and training policies, the legal and regulatory framework, access to financial and non-financial support services, as well as developmental policies and programmes are all covered in the paper, in addition to touching on the significant ways in which these factors are intertwined.

It is inevitable that in a preliminary document such as this, the paper will raise as many questions as it provides answers. 77zis is partly due to the paucity of published material on this important topic, as well as to the underlying biases - both formal and informal - which tend to play down the significance of women's enterpreneurship. The Government of Sri Lanka and key international agencies, such as United Nations Development Programme and other UN specialist agencies like ILO itself, as well as major bilateral development agencies (such as Swedish Sida), are giving more and more prominence to programmes of poverty alleviation and employment creation. However, although many of them promote income-generation and small enterprise development as a means of achieving their objectives, there is a general lack of awareness of all of the significant factors which impact upon the enterprise development process, particularly in the case of women enterpreneurs.

This paper should enable policy-makers and programme planners alike to have a greater awareness of these issues, as well as helping to set the scene for more focussed studies on this important sector. At once the report both sketches out and invites a 'programme of action" on women entrepreneurs.

More information will need to be gathered on the "supply and demand" factors, as touched on in this report Furthermore, additional information should be assembled on the range of support programmes available for micro and small enterprise development, as well as an assessment of the participation of women in these programmes. Where women-specific organizations and projects do exist, their formal and informal roles, as well as their support programmes and member activities, need to be frilly documented. Some further analysis will be required on the activities of members of these support organizations (such as Women's Chamber of Industry and Commerce - WCIC ; and Central Province Women's Chamber of Small Industry and Commerce - CPWCSIC, which has not been referred to by the author). In addition, it should be helpful to profile a cross-section of the memberv f-rom these groups, partly to provide greater visibility for women's enterpreneurship, and partly to provide role models for other potential women entrepreneurs, particularly young women entering the labour market for the first time. As the problem's of running a small enterprise can be very differentfrom those encountered at the startup stage, it would also be most worthwhile to undertake studies into thefactors which encourage or inhibit the development and growth on women's enterprises in Sri Lanka. Once it is available, this information should prove to be most useful for Government, donor organisation, NG0s, women's support organisations, and indeed for the women enterpreneurs themselves.

As the executing agency for this Sida-assited project on women's enterpreneurship, ILO-SAAT will be most eager to receive comments, suggestions or additional information relating to the theme of this paper. However, as well as being involved in this proejct, ILO is the designated UN agency responsible for Employment issues, and ILO has a special focus on issues relating to women workers. In addition, ILO has been working in the fields of enterpreneur@yhip, small enterprise and informal sector development, as well as management development, for nwre than 20 years. For more informaion on any of these matters, please contact the ILO's South Asia Multidisciplinary Advisory Team, ILO-SAAT, based in New Delhi. Contact numbers and addresses are provided in this document.

Senior Small Enterprise and Management Development Specialist

1 . Introduction

In recent years women entrepreneurs have been a major focus of developmental strategies in an economic environment which is dominated by market forces and oriented towards the promotion of the private sector. However, the emphasis on women's entrepreneurship has to be seen in the context in which both the formal sector and conventional small and cottage industries have largely failed to promote the economic advancement of women. An appropriate framework for an analysis of the factors that affect women's entrepreneurship activities in the small-scale enterprise sector is the interface between demand side and supply side factors, and such a framework has been adopted in this report.

It is useful at the outset to attempt to define the parameters of the small scale industry or enterprise sector in which small and cottage industries (SCIS) are subsumed, as well as its various sub-divisions regarding which there appears to be little consensus. From the perspective of scale, it can be seen that: (i) financial institutions use the criteria of the value of the capital base or assets of the enterprise, including land, buildings and investments, up to Rs. 1 million, and (ii) employment criteria define small and cottage industries as having five or less than five workers, including family labour. However, the Small and Medium Industry Project in Sri Lanka, supported by the World Bank and the Asian Development Bank, and the Export Development Board, use different criteria for the small scale sector (e.g. up to Rs.4 million investment).

Cottage industries were traditionally perceived to be an economic activity undertaken largely by home-based artisans and craft workers. Today these SCIs re epitomised by low capital inputs, simple tools and equipment, locally available skills, and they are seen to belong to economically and socially disadvantaged families. While the family itself is often the production unit, women tend to be active participants in gender segregated tasks, as well as sharing in mainstream economic activities.

In many countries and in certain circumstances in Sri Lanka self-employment has been hailed as the panacea for unemployment or for integrating women in development into the overall economic development process. However, such activities can also be seen both as an ill-defined and residual category, as well as being at the lowest level in the small-scale enterprise sector. In the latter context, the relatively new category of micro enterprises can be placed between self-employment and small-scale industry. Schumpeter's (1961) definition of an entrepreneur as a dynamic agent of change, who is motivated to use resources and skills and to take risks to achieve results in a competitive market has introduced a new element into the small enterprise sector. Many of these SCI or micro-enterprise entrepreneurs in Sri Lanka, however, could be viewed as 'employers' or 'own account' workers operating independently, or using a different categorisation, as self-employed individuals, self-employed groups of workers, or those engaging in home-based or cottage industries. Subcontracting by dependent producers can also be included within the defined small enterprise sector. The distinguishing features of an "entrepreneur" are those of innovation, accelerated economic activity and the effective use of a wide range of inputs.

As is the situation in many countries of Asia (and indeed worldwide), in Sri Lanka there is no clear demarcation of sub-groups or levels in the small and cottage industries sector, and the terms self-employment, cottage industries, micro-enterprises and small industries overlap in the relevant literature, while entrepreneurship is seen in the current context as a higher level catch-all term which describes a more desirable mode of economic operation. From the Sri Lankan experience it is clear that women are strongly represented in all categories, thereby making a crucial contribution to these enterprises, to household incomes and to the economy in general (see table 1 in annex).

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