Women Entrepreneurship in Vietnam

Background

There has been minimal focus on female entrepreneurship in the past, though the impact of female entrepreneurial behavior has become quite significant. The motivation for women into self-employment is similar to that for men, in that it includes: educational and occupational background, future goals and estimated growth (Brush, 1992). According to Brush (1992), the responsiveness of men and women to both social and financial policies varies, which implies that they are motivated by different factors. There has been a lot of research focusing on the entrepreneur and the factors that trigger a person to start their own business; however, Brush (1992), identifies the need for more detailed studies on women entrepreneurship.

Vietnam is one of the developing countries in the Southeast Asia region. According to the IBR report of Grant Thornton Vietnam (2011), twenty three percent of all the executive leadership positions in Vietnam are currently held by women. Hence, this research will focus on women entrepreneurship, particularly in Vietnam during the transition period of the economy. In addition to this, the study will look at some of the barriers to the entry of new ventures, as well as the difficulties in establishing a sustainable business. Despite the appearance and fast growth of female entrepreneurs, research shows that women still make less money in self-employment, when compared to men in self employment, hence discouraging their efforts in the endeavor to earn a similar figure to that of the men (Lin, Picot & Yates, 1999).

Women have been observed to take part in numerous activities within the societies in the twenty first century. Part of their contribution to society has involved the women starting their own businesses, and eventually acquiring the power to influence by involving themselves in social and economic activities in their communities. According to Lin, Picot and Yates (1999), there has been worldwide increase in support for the women, after the 1995 UN World Conference on Women, which was held together with the NGO Forum in Beijing. The conferences were aimed at empowering women, who were said to occupy 50% of the population. Encouraging talented women to put their creativity into use was seen as one of the ways to assist in economy development, owing to the fact that most of the poor people in the world are women (Lin, Picot and Yates, 1999). Besides alleviating poverty, empowering the women can lead to better welfare, gender equality and social justice, which will in turn lead to unbiased and prolonged development (Lin, Picot and Yates, 1999).

Justification for the Research

According to Arzeni (1998), entrepreneurship is vital for the creation of new jobs as viable opportunities for employment in larger companies and government are limited, which has necessitated the need for self employment in small firms. Vietnam’s GDP has increased over the past generation, growing at an average rate of 8 percent since 1990. Per-capital income increased from $334 in 1994 to $1,024 in 2008. Poverty, in turn, has diminished. There has also been increased awareness that global economic reform has substantially neglected a huge segment of the world’s population, namely women (Scheela & Van Hoa, 2004).

Although women have traditionally participated in significant numbers in health and education initiatives, policymakers have begun to grasp that the strengthening of public institutions, private enterprises, business associations, professional associations, and other critical economic actors has been late in incorporating women into reforms. Women have been habitually neglected in both wealthier countries and poorer ones. “Despite their gains,” opined the Economist magazine in 2006, “women remain perhaps the world’s most underutilized resource.” Vietnamese women contribute to the country’s economic growth: women make up 50 percent of the country’s workforce. The workforce in the garment, shoe, and electronics factories is typically 70 to 80 percent women (USAID, 2010).

Vietnamese women face various constraints. They must deal with signs that their society does not value them as much as it does its men—from abortions based on male preference sex-selection; to textbooks that dwell on women as weak, ignorant, and helpless, as compared to men; to domestic violence that often goes unchecked; and to pervasive workplace sexual harassment. On the one hand, women in Vietnam are part of an unusually energetic community of businesses and industries. If Vietnam commits itself to reforms in conditions for “doing business” that impact women to the same degree as men, the country will continue to experience greater productivity, entrepreneurial opportunity, and international trade. This research explores the opportunities for and constraints against doing so (USAID, 2010).

Literature Review

There have been various studies on women’s enterprise development in Vietnam in recent years, focusing mostly on women’s constraints in doing business (Hughes, 2011). The information that is a bit difficult to obtain is on the gender constraints that women entrepreneurs face, compared to male entrepreneurs. At the macro level there is no information on the growth and development of women-and men-owned enterprises. At the micro level a shortage of gender analysis prevents SME support organizations from designing appropriate programs to counter gender problems (Hughes, 2011).

Vietnamese entrepreneurs are defined as “for-profit business owners”, who started their own businesses themselves, or took the business ownership from others. In the U.S, the number of women who owned businesses grew at a faster rate in the years 1997-2002 as compared to the overall number of businesses in the country (Barwa, 2003). There are still groups of women, who have intended to do business on their own, but the journey has not embarked yet. Barwa (2003), suggests that this reluctance can be attributed to the women being in a comfort zone, and are unwilling to leave the organization they are working for. Another group of women, who are defined as entrepreneurs, belong to those managing the company as their own ventures. They are currently doing well in the industry and earn a lot of money from the executive leader’s position (Barwa, 2003).

Barriers for women in the entry mode

Regulatory issues, financial constraints and economic culture are some of the common barriers that women are more likely to encounter. They are also faced with social hurdles like fear of failure, and deficiency in both proficiency and information required in business (Earley & Erez, 1995).

The traditional set up has placed women as housekeepers and house wives; hence, hindering them from the opportunity to engage in entrepreneurial activities since they lack access to funds, entrepreneurial resources, information technology, training and agency assistance, while receiving little support from family members (Earley & Erez, 1995).

Esim (2001) suggests that there are instances where legal, traditions, customs, cultural or religious constraints limit the extent to which women can operate their own businesses. In such cases the women are not the ones to make key decisions; they are made for them by family members or husbands (Esim, 2001).

According to Karim (2001), women entrepreneurs are not keen enough to utilize their great business ideas since they do not want to attract financial obligations while starting up a business. They find it hard to incur debts because they are unable to make informed decisions, which are easily interfered with by family and friends (Karim, 2001).

Failure to cope with technological changes in the business environment has posed a great challenge to entrepreneurs since it is both a learning process, and risk, in the development of experience for their companies. This is because many thriving businesses have had to incorporate technological changes in building success (Karim, 2001). The traditional view of women as housekeepers has hindered their holding in society as entrepreneurs, as opposed to their male counterparts, who are seen as breadwinners. This male domination has made it difficult for women to surpass the conventional view (Karim, 2001).

Difficulties to have sustainable business in the transition economy

In the current economic crisis, women have had more advantages than their male counterparts in terms of possessing soft skills. Women negotiation skills are stronger in emotional issues, depth and compromise with problems, leading to their success in the long run; while their male counterparts are good in solutions and performance in the short term period (Nguyena & Nguyen, 2008).

Small and medium ventures are faced with problems of insufficient resources, labor and unclear economic policies. In addition to this, women face problems of management skills, little business network awareness, and the need to balance between business and family responsibilities (Karim, 2001).

Application of Women entrepreneurship Models in Vietnam

According to Nguyena & Nguyen (2008), women entrepreneurship in Vietnam is currently in the age of best performance. This implies that women can be good in business and in family roles, and make sure that their families are happy. In the transition of a developing economy, all the business ventures in general, and Vietnamese women owners in particular, are standing in front of challenges and opportunities (Nguyena & Nguyen, 2008). This means that when the business culture and environment has been changed, all the companies must be well adapted and the appearance of women leaders in the companies is not abnormal any more (Nguyena & Nguyen, 2008). Hence, there is a need to support women, in order to adapt to the new transition period for technology training, corporate governance, corporate strategy, globalization, or new skills required (Esim, 2001).

Early and Erez (1995), identify the evaluation of human resources from a gender point of view as a useful step when evaluating the ability of women in entrepreneurship. The skills considered in human resource include: “those obtained via formal and informal means, education, work experience, on-the-job-training and organizational structures that nurture functional abilities” (Earley & Erez 1995, p. 551). According to Barwa (2003), there has been a rise in the number of women getting basic education in the recent years, which has led to a significant drop in the education gender gap, in Vietnam. He also identifies the gap as considerably high in higher education. A socially equal human resource development policy puts many factors into consideration, including the factors influencing the gender education gap, such as: region, ethnic group and income level (Esim, 2001).

Contribution of research

According to the research study conducted on women entrepreneurship in Vietnam by Truong (2002), the success of women in self-employment is largely dependent on work experience. The issue of gender equality in the work place has faced numerous challenges, and setbacks. The role played by women in the advancement of human development as well as reduction of poverty is key in society. Their role as family caregivers and wage earners has been observed to contribute to the growth of their societies, but in the recent years, their entry into entrepreneurship has led to increased economic growth. This paper has identified the unique attributes of successful women entrepreneurs in Vietnam, which have enabled them to confront any challenges, and survive, adapt and prosper, amidst a variety of setbacks. This research is aimed at increasing the opportunities for women entrepreneurs in Vietnam, as well as to inspire the generations that will come later to pursue their goals for economic development (Mitra, 2002).

The research has identified Vietnam as a land of astonishing economic opportunity for women while at the same time tempered by social constraints. Vietnam has risen to conquer its recent history of colonialism, war, and poverty, allowing it to open its doors to market forces and outside investment. In order to evaluate the impact of female entrepreneurs on economic development, the dependent variable is a change in GDP. The independent variables are categorized into generic factors affecting economic growth and female specific factors influencing economic development. The generic factors that affect economic growth include personal consumption expenditure, government expenditures, exports, consumer prices and private capital investments. Women specific factors that effect economic growth include women in leadership and business, women’s contribution to the family, female economic contribution and gender empowerment (Mitra, 2002).

Delimitations

Because of the ‘tall poppy syndrome’ whereby successful, visible private enterprises may become targets of government harassment, private business owners are likely to be hesitant to do anything that might draw attention to their success, in spite of ensuring confidentiality (Hughes, 2011). Despite this, the sample group should be large enough to cover the various levels of entrepreneurial women.

A sample of various women entrepreneurs is required, in order to represent the starter business owners, in process business owners, and those who are successful in the business line. The interview format comprises open-ended questions developed from the western literature about women entrepreneurs. The interview is also conducted in a series of rounds, whereby the first round is aimed at explaining the research project further, showing them the interview format and asking them to formally commit to be interviewed (Moore & Buttner, 1997).

Research Methodology and Design

The purpose of this research is to explore the essence of women entrepreneurship in Vietnam. It can be summarized as exploratory; whereby all the driving forces for creating new ventures are examined by reviewing the existing barriers at the entry mode for women to do business. The research is also supposed to investigate current situations or difficulties for women to have a sustainable business in the transition economy, especially when the world is worrying about debt crisis. Research has three main classifications namely “descriptive, exploratory and predictive” (Scheela & Van Hoa, 2004).

According to Becker (1998), quantitative research falls into various categories, which can be used based on the nature of the research, usually statistical. Firstly, exploratory research is used to look into topic or issues that have limited prior studies, with the view to gaining an insight and familiarizing oneself with the issues, in order to conduct further investigations at a later stage. Secondly, descriptive research is especially useful when looking at phenomena, especially where statistics are applied, in order for the researcher to gain knowledge on a specific issue. Lastly, predictive research is also known as causal research. This kind of research attempts to draw explanations for various situations via predictions based on hypothesis of the related phenomena (Becker, 1998).

In order to profile women entrepreneurs, it is important to have the right kind of qualitative information and quantitative data and statistics. This includes demographic information such as barriers to business start-up and growth. This kind of information would also be beneficial in increasing awareness of the significance of women entrepreneurs in the economy. The research will assist to develop a frame of reference, which is useful in the evaluation of information. The rising involvement of women in business enterprising indicated the need to enhance the position of women in society and self -employed women (Moore & Buttner, 1997).

Entrepreneurship is a relatively new venture in Vietnam, and it is especially so for women in the private enterprises. As a result, exploratory research would be best, in order to generate the theory obtained from data. Exploratory studies are best conducted using qualitative research due to the formative nature of this field of research, which is ‘Vietnamese women entrepreneurs’. Another issue that supports a qualitative research methodology in this study is the problem of Western ethnocentrism in conducting cross-national comparative research. Problems of this nature require theory or similar anthropological techniques to study non-western business settings.

According to Nguyena & Nguyen (2008), qualitative research is a suitable methodology in the evaluation of growing nations such as Vietnam. The research method is also useful in analyzing underdeveloped phenomena such as women entrepreneurs in Vietnam. This approach ensures a full evaluation of the issue being studied, based on the influence of circumstances in other countries that involve culture, history, economy and politics.

Framework for the research methodology

The language barrier is a likely short-coming in the study, which will require the interview questions to be translated into Vietnamese, from English, by one of the researchers, and then reverse translated into English by a third party in order to minimise translation errors. The sample chosen should also represent women from the various provinces in Vietnam. Another important consideration when conducting the study is to differentiate between the women who were not employed when starting their enterprises and those who started their enterprises while they were still employed (Moore & Buttner, 1997).

It will be important for the women to provide comments about the clarity and appropriateness of most of the questions. This kind of feedback is useful in revising the questions in order to ensure that the survey progresses in the right direction.

The method used to analyse the data is analytical induction, whereby the preliminary theoretical framework developed to analyse Vietnamese women entrepreneurs is refined at regular intervals, based on the data gathered from each interview. More specifically, the theoretical framework will be used to generate open-ended questions to structure the interviews of women entrepreneurs as follows:

• Personal background
• Business experience
• Start-up experience
• New venture operations
• Business planning
• Networking

The interview process shall involve constant comparison of data with the framework developed for Western women entrepreneurs and private enterprises operating in transition economies.

When conducting the interviews, credibility of the respondents can be increased by spending more time with them and studying their responses. Another way of ensuring that the information provided is accurate is involving many researchers and interviewees, and comparing the responses obtained. In addition to this, interviews are, at times, audio-recorded, so that the researchers can re-evaluate the responses provided, for any inconsistencies.

According to Patton (1990), the quality of a study is directly proportional to the skill and proficiency of the investigator, which in turn increases the validity of the study. The interviews may have a few flaws, including biased studies, especially if the questions are poorly constructed, by emphasizing a particular area of interest. Such questions may misguide the respondent, influencing them to provide answers that the interviewer may be hoping to get. Yin (2003) described this phenomenon as reflexivity-interviewee. He advised the researcher to eliminate such responses by structuring interviews with open-ended questions.

When interviewing the women entrepreneurs, the misguided questions may not always lead to incorrect responses. This is because the interviewees usually possess strong character, which is a factor contributing to their success, and they may therefore, overlook the biased questions and provide honest answers based on their experiences.

In a study conducted by Brush (1992), where he sought to find the reasons behind women venturing into entrepreneurship, he categorized the motivation into push and pull factors. Those personal or external factors are classified as push factors, which also include negative connotations. On the other hand, pull factors are looked at in a positive direction. People are driven to start businesses to look for new opportunities when they feel that the timing has come.

When the push and pull concept is applied to entrepreneurship, it examines the diverse reasons leading people to self-employment. Usually, these reasons involve both individual factors and environmental influence (Moore & Buttner, 1997).

Research Questions

The research questions should be well structured by the researcher in order to avoid making the respondent uncomfortable. The structure of the questions affects the response provided, and this is more evident when using either ‘why’ or ‘how’ in a question. Research has indicated that ‘why’ questions push the respondent to the defense, while ‘how’ questions are more accommodating and attract genuine responses (Becker, 1998). When constructing interview questions, researchers use open-ended responses since they allow the respondent to fully explain themselves, and at times, incorporating the ‘why’ answers without having to be asked.

Patton (1990) suggests that there are several kinds of questions that can be presented in an interview. Questions on behavior and familiarity or experience require the respondent to provide a response based on their actions that got them to their current position. Another category of questions inquire on an individual’s outlook and values, which seek to find out the decision making process of the respondent. The third category of questions is used by a researcher to investigate the emotional aspect of the responses provided by the interviewee, regarding their experiences.

A researcher may also include knowledge questions in an interview process, in order to draw factual information from the respondent. The other two types of questions look at the interviewee’s perception based on the senses, and compare her to other people based on their background and demographics. The interview questions prepared have put into consideration the mentioned classes of questions, in order to draw conclusive answers.

The open-ended questions used in the qualitative study are received by the respondents in different ways, which will in turn lead to widely varying responses. The researcher use probes, including elaboration probes, to obtain more information from the interviewee. These probes usually come after the open ended questions, if the researcher is not satisfied with the responses provided by the interviewee. The probes are therefore, designed to target a response on a particular topic from the interviewee (Shim, 1998).

Some of the relevant questions with regard to the thesis topic that are intended to allow easy analysis and discussion on the topic are listed below.

1. What are the assumptions of women on their employment
2. What are the assumptions of women on their unemployment
3. What are the financial characteristics put into consideration prior to engaging in entrepreneurship?
4. How do the people in society influence a woman’s decision to engage in entrepreneurship?
5. What experiences do women have regarding entrepreneurship and the creation of new businesses?
6. How do you determine the success of a person/ level of success?
7. How much more money do women getting into self employment want to earn when they decide to start their own ventures?
8. What are the barriers for Vietnamese women to becoming self-employed at the entry mode?
9. What are the challenges to building a sustainable business in transitional economy for these entrepreneurs, especially when the economy is developing with high inflation rate and high proportion of currency devaluation?

Conclusion

According to Esim (2001), the process of liberalization of the global economy has had negative effects on availability and provision of labor of its member economies. Other challenges include an increased income gap between workers, job insecurity and high rates of unemployment. These challenges have been attributed to the appearance of a lot of multi-national corporations. Another reason for the challenges is the internalization of industries (Esim, 2001).

There is some good that has come with the liberalization for the member economies, especially with regard to the development of women entrepreneurship. The relevance of women venturing into entrepreneurship in terms of economic development has been identified by international organizations such as the International Labor Organization (ILO) and the Organisation for Economic Co-operation and Development (OECD) (Patton, 1990). In order to enhance the economic performance and improve opportunities for women to venture into self employment, the following key policies were proposed by Patton:

• Enhance women capability to take part in labor force by providing inexpensive child care and treating them in a similar manner to men in the work environment. Women venturing into self employment should become an easier process if the women are seen as important and equal members of society.
• Providing women with the necessary knowledge for owning and running businesses, by giving them a voice. This is made possible by the government offices that focus on problems, which women in entrepreneurship encounter. The office is also responsible for organizing seminars and other initiatives that are beneficial to women who want to start or grow their businesses.
• Taking into consideration the concerns and impact of women in entrepreneurship when formulating policies that affect SMEs.
• Women entrepreneurship networks, which include corporations and partnerships that extend globally, are a good source of knowledge for women starting their own businesses, or those with the intention of expanding their business ventures.
• The regular assessment of the effectiveness of SME related policies on the enhancement of business ventures owned by women, in order to identify the areas that require improvement, or more emphasis, as well as those procedures that are not beneficial to women growth in self employment.
• Sensitizing people on the economical importance of women entrepreneurs using campaigns around the country, and conducting research on the effects of women entrepreneurs in the nation.

Like other Asian developing countries, the economy of Vietnam is highly dependent on SMEs to create employment opportunities. This means that majority of the population depends on private firms to provide them with a means of livelihood, especially the women. Previous studies conducted on women entrepreneurs have indicated that many women who get into self employment prefer to do so in low income generating activities, since they are easy to venture in exit, require minimal funds to start, require little or no skill, and have no requirement for technology (Olson & Currie, 1992).

Looking at the push and pull factors that drive people into entrepreneurship, most women in Vietnam get into business as a result of push factors. These factors include poverty, unemployment and the need to raise the standard of living for their families. The numbers of women who get into entrepreneurship due to pull factors such as the need for a challenge, self esteem or as a pass-time activity is minimal. The drive for women to get into entrepreneurship due to pus factors like anticipation for emergency implies that increased education levels among the women may lead to a decrease in their involvement in SMEs, since they would seek better paying jobs, as opposed to challenging themselves by venturing into the business arena (Barwa, 2003).

In summary, the number of women going into entrepreneurship in Vietnam is on the rise due to push factors, though it is still a small number compared to that of men in the same field. This difference in number can be attributed to: both low education and training opportunities for women, which denies them the necessary skills to venture into business; the numerous household duties imposed on women by society, which deny them time to engage in other activities; cultural, legal and religious restrictions to women involvement in business; and the unavailability of funds and other resources required to start a business (Karim, 2001).

According to Earley and Erez (1995), there are a few activities that can be conducted to improve the involvement of women in entrepreneurship. Some of these activities include:

“establishment and promotion of businesses and social networks; promoting successful women entrepreneurs as role models for other women using the media and campaigns; publicizing success stories and rewards of becoming entrepreneurs; creation of reliable administrative frameworks for the creation of businesses; developing attitudes and skills by enhancing education and training activities; and establishing finance models that allow more accessibility to financial services”.

The development of women entrepreneurship is a significant step in the empowerment of women in the Asian developing countries. In order to effectively manage the process of economic integration of Vietnam in the global economy, there should be more focus of the leaders into ensuring sustainable role of the MSEs in availing their services. The policies should be favorable to the MSEs in order for them to be able to compete on a good level, where they can adjust to the economic shocks with stability without their businesses collapsing. Women venturing into businesses in Vietnam usually opt for FDI export processing, but lack of approval leads them small businesses, usually in the traditional setting, where entry and exit is easy. Training at all levels of business, including business developers and policy makers, would help to reduce the burdens and risks that SMEs are exposed to.

References

1. Barwa, S. D. (2003). Impact of Start Your Business (SYB) Training on Women Entrepreneurs in Vietnam, ILO Office in Vietnam. ILO Vietnam Working Paper Series No. 1.
2. Becker, H. S. (1998). Tricks of the trade: How to think about your research while you‘re doing it. Chicago: University of Chicago Press.
3. Brush, C. (1992). Research on Women Business Owners: Past Trends, a New Perspective and Future Directions. Entrepreneurship Theory and Practice , 16(4), 5-30.
4. Earley, C., & Erez, M. (1995). New Perspectives of International Industrial/Organizational Psychology. Understanding the International Leader , 536-625.
5. Esim, S. (2001). See How They Grow: Business Development Services for Women’s Business Growth. Washington, D.C.: ICRW.
6. Hughes, M. (2011). Mergers and acquisitions: global prospects for growth. London: Grant Thornton International.
7. Karim, N. A. (2001). SEED Working Paper No. 14, Jobs, Gender and Small Enterprises in Bangladesh: Factors Affecting Women Entrepreneurs in Small and Cottage Industries in Bangladesh. Geneva: International Labour Office.
8. Lin, Z., Picot, G., && Yates, J. (1999). The Entry and Exit Dynamics of Self-Employment in Canada. Business and Labour Market Analysis.
9. Mitra, R. (2002). The Growth Pattern of Women-Run Enterprises: An empirical study in India. Journal of Development Entrepreneurship, 7(2), 217
10. Moore, D., & Buttner, E. (1997). Women Entrepreneurs: Moving Beyond the Glass Ceiling. Thousand Oaks, CA.: Sage Publications.
11. Nguyena, H.-H. D., & Nguyen, N. T. (2008). Examining Personal Values and Entrepreneurial Motives of Vietnamese Entrepreneurs in the 21st Century: Two Empirical Studies*. African and Asian Studies , 7, 141-171.
12. Olson, S. F., & Currie, H. M. (1992). Female Entrepreneurs: Personal Value Systems and Business Strategies in a Male-Dominated Industry. Journal of Small Business Management , 30(1), 4-23.
13. Patton, M. (1990). Qualitative Evaluation and Research Methods, (2nd ed.). Newbury Park, California: Sage.
14. Scheela, W., & Van Hoa, T. (2004). Women entrepreneurs in a transition economy: the case of Vietnam. Int. J. Management and Decision Making , 5(1), 1-6.
15. Shim, S. (1998). Characteristics of Hispanic female business owners: An exploratory study. Journal of Small Business Management , 36(3), 4-13.
16. Truong, T.-D. (2002). Gender and Enterprise Development in Vietnam under Doi-Moi: Issues for Policy, Research, and Training. raining for Women in Micro and Small Enterprises in Vietnam, phase 2 , 1-27.
17. USAID. (2010). Women’s Participation in Vietnam’s Economy. Agenda for Action, 1-9.
18. Yin, R. (2003). Case study research : design and methods. Thousand Oaks, Calif.: Sage Publications.