Women in Business & Politics: The Entrepreneurial Perspective

Prof. Dr. Liora Katzenstein, Founder and President, ISEMI, Israel.
Based on a speech given at the EU HQ in Brussels in April 2009. 

I would like to open this short speech by making some short background remarks about myself, in order to justify the fact that I am standing here today. I have spent the last 25 years dealing with area of entrepreneurship and innovation, both in academia as well as in the business world, being a director in numerous international companies.

During this time, I have given special emphasis it the issue of "Women Empowerment", by giving women entrepreneurs special scholarships for our academic programs, by trying to employ as many women lecturers as possible at ISEMI, the incubator for Entrepreneurs that I have created in, and by recommending women for top positions and boards of directors.

Before embarking on the topic at hand, I would like to start with some short remarks about the situation of women in Israeli politics.

• Israel currently has 8 million inhabitants, about one million of which are Muslim Arabs and about another million of which are orthodox and religious Jews. Both these constituencies do not push women to the forefront of political life, if we want to use a politically correct terminology.
• Currently only 15% of the 120 Israeli Member of Parliament are women with 2 Ministers, Foreign Affairs and Education. The same percentage is true for the participation of women in local politics.
• In the 60 years since the establishment of the State of Israel there have been only 11 women Ministers as well as 11 women Vice Ministers.

Looking at the heading of the topic for this day, "Women in Business & Politics", it seems to me that it is actually a euphemism for the term "Women & Power" which we may be afraid to use out in the open. When we talk about achieving a high position in either business or politics, we actually refer to the accumulation of resources (such as money, contacts, social standing, political influence, etc.).

It is obvious that women can only play an equal role in society as long as they have in their possession at least equal amount of resources form the list above. I say "at least", because women still do not have the same access to the corridors of power as have men and therefore, they must come equipped with more resources at hand.

In this short speech I would like to argue that the way to achieve political power, and thereby societal change, passes through the achievement of economic power by means of entrepreneurial endeavors. I would like to argue that any attempt to start right away from the political accumulation of resources, is unfortunately doomed, because the outcome is "Tokenism" as, in most cases, there is no real power behind it.

However, "Tokenism" is part of a socially and politically acceptable game of images, the result of which being that men again, manipulate the power game whilst putting women at the front.

As some of you may recall, this has been the policy of the USA in the late 1980's when the "Small Business Administration Act" gave women-owned businesses significant preferences, such as better access to credit, priority in public tenders, etc. Without wishing to enter a political debate, I would just mention the some critics consider Hillary Clinton's candidacy for the presidency of the USA, a result of such "Tokenism". However, one has to start from somewhere, and many would argue that Tokenism or not, such legislation actually brings about the acquisition of real power, somewhere throughout the process.

In addition, there is one more important reason why women should concentrate on accumulating wealth and status in the business arena before they embark on political activities. This reason is that in the business arena the accumulation of money & power is mostly objective and not based on gender, color, race or other biases. This means, that if you have something I need, the transaction will usually take place (almost) without any consideration for the personal identity of the parties that are involved in the transaction.

Obviously, women who suffer from discrimination will have much a fairer deal in the economic than in the political context, as in politics they have to satisfy the requirements of non-objective bodies, such as nominating comities, biased media, financial backers, etc.

The main issue for women is therefore their accessibility to the initial financial resources that will allow them to start becoming a player in this game. As this is rather rare, the issue of women's handicap in the access to political power becomes a vicious circle.

This loop can be resolved only by political means. It is therefore the moral obligation of the women who have succeeded at arriving to decision making positions in the political arena (even if they started out as Token women) to invest a great deal of energy and resources in "Affirmative Action" as it is called in the US, or "Mainstreaming" as it is called in Europe, for supporting and advancing women in business.

This, in turn, will mean that the women who actually make it in the business world, will subsequently feel a moral obligation to back the women politicians who paved their way initially. This will occur because these 2 groups of women actually share a common agenda, mostly a feminist one that is based on a common social agenda for entrepreneurship education, health, and family oriented issues.

Having said this, I would like to go a bit more into detail as to the difference between the American and the European approaches in promoting women.

The USA has been the first nation in the world who has dealt with this issue through legislative means in the Small Business Act of 1988. Under this legislation, women-owned businesses enjoyed favorable access to financial resources, to government tenders, etc. As a result, a considerable number of women have entered non-traditional sectors such as construction. Statistics show that by the late 90's, 2/3 of all small businesses in the US were women owned. This obviously is far from reality. I would contend, however, that even if a small number of these fictitious business owners actually became real ones, the legislation has achieved its goals, as it will ignite the process that I have described above.

The European Community, on the other hand, has adopted a different approach that does not allow for "Affirmative Action" because of arguments of equality. The EU, although not calling it "Affirmative Action", but "Positive Action", recognizes the principle of empowering women, especially where they are under-represented (Article 141 of the EC Treaty). The Court of Justice of the EU even recognized the legitimacy of quotas, where they are not rigid and do not discriminate men. Furthermore, the EU has an ambitious program for child care (i.e. subsidized nurseries) to be implemented by 2010. This will help mothers to reconcile their dual role at home and at work. The philosophy behind this move is that this approach will be more effective than quotas and more conducive to empower women.

The EU has adopted an approach of "Mainstreaming" that argues that there should be not special programs favoring women, but that every decision, project or expense of the EU should be considered under the following criteria: does it contribute to the equality between men & women? Or, does it leave gender gaps as they are ?

The EU Charter on Fundamental Rights, 2000, which has now legal backing, refers to gender equality as a core fundamental right not only at work, but in all activities. Articles 21 and 23 of the Charter prohibit any discrimination on grounds of sex and enshrine the right to equal treatment between men and women “in all areas including employment, work and pay”.

The result of this approach is sometimes rather strange. For example, if there is, an academic area in medicine that is male-dominated, it risks not receiving EU support because of "Mainstreaming". Obviously, in reality, there is always a gap between theory and practice. I am rather confident that the men in the example above would find a way around "Mainstreaming". However, the fact that this is a formal directive is of great importance.

As of today, it is very difficult to know which of the two systems has provided greater assistance for the advancement of women in business & politics, and we will have to leave it for the future to judge.

I would like to conclude this short speech by stating my firm belief that only by translating financial power and influence into political powers will women be able to share the leadership of society and promote women related agendas.