Keywords

1 Introduction

The etymology of the word ‘entrepreneurship’ has its root in the French term ‘entreprendre’ the connotation of which, according to Oxford dictionary, is to undertake or do something. The world is not unanimous as to its usage, and we do not find any consensus on any universally accepted definitions (Dana, 1997; Long, 1983). According to Oxford dictionary, entrepreneurship refers to the act of making money through business. Since the genesis of the root word goes as far back as the twelfth century, the first seminal theoretical use of the concept of entrepreneurship has been done by Richard Cantillon around 1730 (Long, 1983). According to the view of Cantillon, an entrepreneur is an adventurer who does business in an uncertain surrounding which may fetch him/her a profit or a loss. Thus, risk-taking is the chief feature of entrepreneurship. However, the concept has evolved since then, and numerous other features have been highlighted by other researchers over the years (Ramadani & Schneider, 2013). Wennekers and Thurik (1999) define entrepreneurship in the following words:

Entrepreneurship is the manifest ability and willingness of individuals, on their own, in teams, within and outside existing organisations, to perceive and create new economic opportunities (new products, new production methods, new organisational schemes and new product market combinations) and to introduce their ideas in the market, in the face of uncertainty and other obstacles, by making decisions on location, form and the use of resources and institutions. (pp. 46–47)

The field of entrepreneurship is no longer a prerogative of men. Nowadays the role of women in business has been started to be felt throughout the globe in varying degrees. The call for women entrepreneurship has been advancing (Palalic et al., 2020; Ojong et al., 2021) due to the exemplary and phenomenal footprints some of the women such as Njeri Rionge, Isabel do Santos and Bethlehem Tilahun Alemu had on society. These women have broken all the conventions ingrained in the society that only men can rule the business world and women are destined and deserve to be chained within the confines of the four walls of their homes doing household works, rearing children and serving their husbands as the culture has been handed down to them. Their contributions to society at large are an eye-opener, and they have taught the world that they are at par with men and at times they are above par too (Zenger & Folkman, 2019). There is no doubt that their involvement in whatever types of business, be it large, medium or small, is substantial. The long saga of oppression, subjugation and maltreatment of women all over the world make this subject even more worthy of attention and consideration. Karen Quintos, chief marketing officer (CMO) and senior vice president of Dell, has once pointed out the importance of women’s entrepreneurship in the following words:

Unleashing the power of female entrepreneurship can have a dramatic effect on a country’s economy. The research clearly supports the assertion that key things need to be fixed in order for female entrepreneurship to survive and flourish.

It is therefore a matter of greater importance for the welfare of the society that women entrepreneurship be fostered, and the subject needs even a far greater emphasis in the case of developing and underdeveloped countries. There is an urgent need to remove obstacles and hindrances which come in the way of women entrepreneurship as ILO (2016) has rightly emphasised to remove barriers against women entrepreneurship in the following words:

Removing barriers, such as discriminatory property and inheritance laws, discriminatory customary laws, poor access to formal financial institutions, and time constraints due to family and household responsibilities, could create greater opportunities for sustainable enterprises run by women. This, in turn, would contribute to women’s economic empowerment and gender equality as well as job creation.

There is no denying that Ethiopia is also encouraging the participation of women; their involvement is rather push-based and limited to small and microenterprises due to one reason or the other. People (entrepreneurs) are pushed into entrepreneurship when there are limited employment opportunities (Dana & Morris, 2021). Furthermore, the lack of strong vocational education, extreme poverty, limited business avenues and societal attitude towards the working of women are stunting their growths.

More or less 80% of the women workforce lives in rural areas (Lynch, 2021), and they are engaged in traditional businesses dealing with iron-based, wooden-based and clay-based products. Though there is no availability of any official data on the number of women entrepreneurs in Ethiopia and types of women entrepreneurial activities, observation suggests that most of the professions they are engaged in represent their culture, diversity and heritage. The establishments of a good number of organisations dealing with the promotion of women entrepreneurship in Ethiopia buttress a point that the government and other stakeholders are sincere towards the promotion of women entrepreneurs in Ethiopia. Some of the organisations which are supporting women entrepreneurs are the Federal Micro and Small Enterprise Development Agency (FeMSEDA); Regional Micro and Small Enterprises Development Agencies (ReMSEDAs); Trade, Industry and Tourism Bureaus (TITBs); the Women’s Affairs Departments (WADs); the Women’s Affairs Coordinating Department (WACD); the Women’s Enterprise Promotion Centre (WEPC); Women Development Fund (WDF); etc. Apart from them, the World Bank has run a project called the Ethiopia Women Entrepreneurship Development Project which is for the assistance to women entrepreneurs who are engaged in micro and small enterprise (MSEs) (World Bank, 2019a). The project imparts entrepreneurial and skill training in addition to providing the women entrepreneurs with credit facilities. The functioning of the project has been fascinating, and Ethiopia urgently needs some more result-oriented programmes and projects as it is still besieged by a good number of issues.

Though there are a good number of challenges facing entrepreneurs in Africa due to the unfavourable environment of business and political conditions (Dana et al., 2018), the biggest challenges facing women entrepreneurs in Ethiopia are related to finance, market access, large-scale procurement of inputs of production, lack of education and training and societal attitude. The negative impact of inimical societal attitude towards women’s participation in businesses has been well-described by the ILO (2016) as:

Societal attitudes and norms inhibit some women from even considering starting a business, while systemic barriers mean that many women entrepreneurs stay confined to very small businesses often operating in the informal economy. This not only limits their ability to earn an income for themselves and their families but impedes them from realising their full potential to contribute to socio-economic development, job creation, and environmental stewardship.

Nevertheless, a good number of banking and non-banking financial institutions are there; they are unable to solve the issues of finance of women entrepreneurs satisfactorily, and this problem, according to WEDP (2021), is not only affecting Ethiopia but all the emerging countries of the world. According to WEDP (2021), an estimated 70% of SMEs being run by women in the formal sector in the emerging economies are underserved by financial institutions. The financial institutions do not meet the expectations of women entrepreneurs due to a good number of limitations and bureaucratic procedures. However, the help accrued to the women entrepreneurs from the Ethiopia Women Entrepreneurship Development Project has been phenomenal (Haidet, 2019), and the government must approach other donor agencies and work in tandem with them to bring about a perceptible change in women entrepreneurship in the country. The issue of market access is also of grave nature (Hailu et al., 2016) and calls for an urgent attention. Since most of the working women live in rural areas and remote parts of the country, their access to the urban market is very limited. The bad performance of Ethiopia on other business parameters such as ease of doing business and logistical issues which are obvious from the Doing Business Report of the World Bank (World Bank, 2020a) and Logistics Performance Index of the World Bank (World Bank, 2016) further limits their access to a free and fair market. The lack of market access retards women entrepreneurship from growth and expansion. The lack of education especially among women does not herald a promising future for Ethiopia as far as the dream for women entrepreneurs in the country is concerned. The government is focusing on it by bringing in courses related to entrepreneurship at the university and college levels, but much more has to be done to increase the intake of women in the colleges and universities, and only then will we have a more educated women workforce in the future. A perceptible amount of work has been undertaken to promote women entrepreneurship in Ethiopia, but much more is required to help the dream of women entrepreneurship to come true.

2 Historical Overview

Ethiopia, called as the Federal Democratic Republic of Ethiopia, is a landlocked country that lies in the Horn of Africa. Djibouti, Eritrea, Kenya, Somalia, Somaliland, South Sudan and Sudan are the neighbouring countries. With 112 million people, it is the second-most populous country of Africa, and her world ranking in the population is 12th (Undata, 2019). The largest city called Addis Ababa, which is an abode of numerous intergovernmental organisations, is the capital. Ethiopia is a multilanguage country embracing a mosaic of more than 80 languages (Leyew, 2020). Amharic, one of the official languages—Afar, Amharic, Oromo, Somali, and Tigrinya, is the working language. It is a multi-ethnic country. Afa, Amhara, Gurage, Hadiya, Oromo, Sidama, Somali, Tigrayans and Welayta are some of the prominent ethnic groups. These ethnic groups are very strong and have a perceptible influence on the economy, social and political environment of Ethiopia (Erk, 2017). As far as Ethiopia’s culture is concerned, it’s known for its richness and pluralism. All major religions including Christianity and Islam are peacefully practised and propagated here.

The country is endowed with cheap labour, craftsmanship, heritage sites, fascinating biodiversities and vistas. Numerous UNESCO-recognised heritage sites including Aksum, Fasil Ghebbi, Harar Jugol, Konso, Lower Valley of the Awash, Lower Valley of the Omo, Lalibela, Simien National Park and Tiya (UNESCO, 2021) add to the importance of the country and draw the attention of international visitors. These sites are considered as the lifeline for the tourism sector and other stakeholders who are related to it. Ethiopia is also endowed with very rich biodiversity which complements the tourism sector and contributes to the economic progression of the economy. Ethiopia has been one of the fastest-growing countries in the world for the last many years and might be among the block of “fast-expanding market” in the future. To qualify for being called a fast-expanding market, a country has to register a growth rate of 15% for a minimum of 3 years (Acheampong & Dana, 2017). However, the intermittent ethnic clashes and the ethnic rebellion against the government (Yusuf, 2019) seem to derail the fast progression of the economy. The noxious Covid-19 is adding to the woes of the country which has been bearing the brunt of innumerable challenges.

Apart from issues of peace and stability, other problems such as poverty and human development, among others, seek attention. It is one of the poorest countries in the world, with a per capita income as low as 1000 US dollars (World Bank, 2019b). More or less than a quarter of the population of the country lives below the poverty line (World Bank, 2015a). Around 40% of the population lives on barely 1.90 US dollars a day (World Bank, 2015b). An extremely high level of poverty compels the population into drudgeries. It makes one’s hair turn on to have seen rampant unemployment and maltreatment of workers. The labourers are used without a smattering of humanity, and the use of the word ‘beast of burden’ or ‘sumpter’ would not be unwarranted to mean the low-wage workers who work in restaurants and brick-making factories. They are forced to work like slaves and they hardly get basic amenities essential for survival. This is also reflected by the human development index as the country could get barely a score of just 0.0485 out of 1. Ethiopia stands at 173rd ranking out of 189 countries (HDR, 2020). The ranking of the country itself speaks volumes for the quality of life in a country that is at times beyond one’s imagination in the case of Ethiopia. Ethiopia badly lacks adequate infrastructure and needed institutional capacity which proves to be a stumbling block against the planned development of the country. The nonexistence of sea and land-locked nature of the country further stunt Ethiopia’s internationalisation process, and it could not internationalise as much as other resource-rich landlocked countries of the world (Dana & Ratten, 2017). It has to fall back on other neighbouring countries such as Eretria in matters of trade with the world. It is worth mentioning that Ethiopia stood at 172nd among a group of 203 countries on the KOF Globalization Index (KOFGI, 2020). The KOF Globalisation Index is widely used to refer to the degree of globalisation of a country and is published by Zurich-based KOF Swiss Economic Institute.

It is a matter of great concern that the ethnopolitical tensions in various parts of Ethiopia have once again shaken the country and ruined the very aims of peace and prosperity in the country. With the current prime minister at the helm, it was expected from him to steer the country towards peace and all-around progress (Nyabola, 2018), but the hopes shattered after the assassination of much-loved musician Hachalu Hundessa in 2020. The assassination resulted in widespread protests, loots, destructions of the property, innumerable fatalities and disruptions of the supply chain in and around the capital of Ethiopia (Abebe et al., 2020; Wight, 2020). Since then government at the centre has been facing even stronger challenges from the Oromia region. Though the tension seems to have eased off, the clue suggests otherwise. On the other hand, the intermittent clashes between the armed national forces and the Tigray people are also proving nail in the coffin. The Tigray crisis and the brutal atrocities on the people from the Tigray region have drawn the attention of the whole world which is quite obvious from the work of Istratii (2021). Because of all these issues of peace and stability, the position of Ethiopia has deteriorated on the Global Peace Index which is published by the Sydney-based Institute for Economics and Peace (IEP) that measures the position of the peacefulness of a nation. Ethiopia stood at 133rd position in the Global Peace Index in 2020 (GPI, 2020) which is worse than the 121st rank in 2016 and 127th in 2017. The Global Peace Index Report of 2020 holds the situation responsible for the downgrade in the ranking in the following words:

Ethiopia experienced a similar trend, as emergency restrictions to contain protests in 2015 expired in late 2017 and citizens returned to the streets. The number of riots and demonstrations rose 500 per cent from 2015 to 2018. Much of the unrest occurred in Oromiya state, which surrounds the capital Addis Ababa and reflected long-standing tensions between the province and the federal government. Demonstrations and other ongoing violence led to the resignation of then-Prime Minister Hailemariam Desalegn in February of 2018.

In matters of terrorism, the Institute for Economics and Peace kept Ethiopia on the 28th position in the Global Terrorism Index of 2020. The situation of peace seems to have deteriorated over the year which is expected to worsen after the recent unfortunate happenings which the report could not cover.

3 Entrepreneurship Ecosystem

Entrepreneurial ecosystem or entrepreneurship ecosystem means a conducive and congenial atmosphere where the birth of start-ups and the growth of innovative businesses are possible. According to Cavallo et al. (2019), the entrepreneurship ecosystem is a system of facilities that supports the emergence and progress of new ventures. Here, by the term ‘facilities’, we may mean all factors or stakeholders (see Fig. 2) such as government, society, economic policies, banking policies, political orientation of the ruling parties, etc. which facilitate or hinder entrepreneurial spirits in a particular place. All big multinationals such as Apple, Google and Twitter, which are ruling the world today in the domain of business, are the results of conducive entrepreneurship ecosystems. Spigel (2017) states that the entrepreneurship ecosystem has three attributes, namely (i) cultural, (ii) social and (iii) material. Cultural attributes mean a legacy of successful entrepreneurship history which a country has built over the years and now the start-ups and business innovations are in the cult of the nation. Social attributes can be attributed to the pool of available business talents, capital for the start-ups, networks, entrepreneurial mentorship and guidance. Material attributes can be related to the availability of supportive business infrastructure, logistical soundness, government supports and access to the markets for achieving entrepreneurial goals.

One of the most critical components of an entrepreneurial ecosystem is the role of entrepreneurial support programs in fostering entrepreneurship among start-ups and small businesses (Spigel, 2017). Entrepreneurs in Ethiopia face a lack of funding options for their start-ups. Specialized investors are few and far between, and banks are ill-equipped to service the needs of start-ups. There is a limited amount of capital available to capitalize on potential projects. Only a few cities, such as Addis Ababa, have a reasonable support system for entrepreneurs, with several private sector organisations that assist entrepreneurs in succeeding in their business pursuits. Recently, numerous noteworthy initiatives have been taken which are paving the way for the growth of the tech scene. For instance, the Digital Ethiopia 2025 programme is a digital transformation strategy centred on four “digitally enabled pathways” that take current economic drivers into account (Mengiste, 2021). This push towards digitalization reflects the Ethiopian government’s growing interest in bringing the country’s economy into the twenty-first century, which is undoubtedly good news for the start-up ecosystem. Apart from that, a notable and unique trend in Ethiopia’s start-up ecosystem is the role of the Ethiopian diaspora, which has returned and is returning to the country to push for economic digitization and modernization and has been granted special permits by the government to invest and operate (Getachew, 2020). Ethiopia’s start-up ecosystem overview, with a population of over 112 million, reveals a sizable untapped market for entrepreneurs to exploit, particularly as the country transitions to a more digital economy.

In addition, Ethiopia’s Startup Act, which was published in 2020, includes provisions for the establishment of a National Startup Council chaired by the Minister of Innovation and Technology and charged with overseeing and supporting the country’s start-up ecosystem (Startup Blink, 2021). This council’s responsibilities will include developing and facilitating an innovation ecosystem, dismantling barriers to entrepreneurship and expanding access to foreign direct investment. Additionally, the council retains discretion over which businesses qualify as ‘start-ups’ and which businesses qualify as ‘innovatives’. To qualify as a ‘start-up’, a business must be a micro-, small- or medium-sized enterprise that has been legally operating for less than 5 years (LB, 2021). On the other hand, the Ministry of Innovation and Technology will finance the innovation fund through government funding, grants and foreign donations. The fund will be used to award start-up scholarships, cover intellectual property fees, incentivize key ecosystem players such as incubators and accelerators and even replace absent employees.

Entrepreneurial support for women is being given by many organisations. For instance, according to the World Bank (2019c), the Women Entrepreneurship Development Project (WEDP) provides financial and business support to women entrepreneurs in Ethiopia who are growing their businesses. WEDP established Africa’s first women entrepreneur-focused line of credit in 2013. After the IDA commitment was fully funded in 2 years, the project was expanded through co-financing from Japan, Italy, Canada and the European Investment Bank. Each month, the WEDP line of credit disburses approximately $3 million in loans and trains approximately 600 entrepreneurs. The Development Bank of Ethiopia (DBE) and the Federal Agency for Urban Job Creation (FUJCFSA) are implementing the project, which currently involves 12 participating microfinance institutions and a network of training providers throughout the country. Similarly, as per Cordaid (2019), Cordaid, a development organisation, has aided 35 women-owned businesses throughout Ethiopia. EthioGreen is one of these. This small factory is predominantly female-run and specializes in baking Yagerbet injera, a traditional Ethiopian flatbread. The bread is made with teff, a gluten-free, protein-dense grain indigenous to Ethiopia that many consider to be the next superfood. Rahel Moges is EthioGreen’s first female general manager. She hopes to leverage Cordaid’s training and support to establish herself as a leading exporter to the Ethiopian diaspora in the USA. Recently, according to NBE (2021), the African Development Bank Group has solicited proposals for projects that will strengthen the viability and sustainability of women’s entrepreneurship in Ethiopia. The bank is committed to assisting enablers in strengthening their members’ business and financial skills, as well as wealth-creating capacity, through the Affirmative Finance Action for Women in Africa initiative. The bank will consider applicants’ track record of supporting women-owned businesses, innovation and significant development impact, as well as their ability to secure additional funding. The call for business proposals is of greater significance in the sense that entrepreneurship enablers, such as business associations and civil society organisations, contribute significantly to women’s empowerment in establishing bankable SMEs and other businesses. The enablers frequently face obstacles such as long-term growth plans and a lack of funding, limiting their reach, impact and sustainability. Women business enablers are critical in establishing a viable-enabling environment conducive to the growth and creation of women’s entrepreneurship that generates jobs for the continent.

Some of the other organisations are also playing very proactive roles in helping women entrepreneurs in Ethiopia, but their approaches are general, and they do discriminate based on gender. They include Addis Ababa Angels, Renew LLC, Addis Ababa University, the Ministry of Science and Higher Education and the Ministry of Innovation and Technology (Startup Blink, 2021). Addis Ababa Angels is a collaboration of individual investors who have pooled their financial resources to support early-stage technology and technology-enabled innovative businesses. Renew LLC is an impact investment firm based in Addis Ababa. It manages and serves the Impact Angel Network, a global network of investors seeking both social impact and financial returns on their investments in African small- and medium-sized enterprises (SMEs). Addis Ababa University is the country’s top university and offers entrepreneurship courses in economics and engineering, as well as a faculty and student-run Technology Business Incubation Centre. The Ministry of Science and Higher Education is responsible for the development of science, higher education and technical and vocational education and training (TVET) in Ethiopia.

The government has also started several financial support programmes through banks and financial institutions (see Table 1). They include the Rural Financial Intermediation Programme (RUFIP) (Development Bank of Ethiopia), Small and Microfinance Institution Loan (Wegagen Bank), Small Business Financing (Dashen Bank S.C), Small Business Support (United Bank S.C), Small-Scale Loan Provision (Amhara Credit and Savings Institute), SME Financing and Loan Advisory Service (Oromia International Bank S.C. (OIB)), SME Financing Project (Awash Bank), SME Loan (Berhan Bank) and Women Financing Service Program (Enat Bank SC). Apart from them, many programmes for the capacity development of entrepreneurs and start-ups by international agencies and non-governmental organisations are running. Some of them include the Agri-Business Incubator Program (blueMoon), CBOS’ Capacity Development (Jerusalem Children and Community Development Organisation), Credit and Economic Facilities for Self-Sufficiency (Christian Aid), Developing Social Entrepreneurship in Ethiopia (Reach for Change Africa), Economic Development Program (World Vision), Entrepreneurship and Business Growth (Digital Opportunity Trust), Entrepreneurship Development Programme (United Nations Development Programme), Ethical Coach Initiative (Center for Creative Leadership), Global Business Network (Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH), GrowthAfrica Acceleration Programme (GrowthAfrica), GrowthAfrica Advisory (GrowthAfrica), Impact Angel Network (RENEW Investment Advisors, PLC), Private Equity Funding for Small and Medium Businesses in Ethiopia (RENEW Investment Advisors, PLC) and Scaling Up Rural Savings and Credit Cooperatives (Self Help Africa) (see Table 1 for details).

Table 1 Various stakeholders engaged in promoting entrepreneurship in Ethiopia including women’s entrepreneurship
Full size table

There is no doubt that the government and other stakeholders are sincerely concerned to promote entrepreneurial spirit and environment in the country, but much more has to be done to fulfil the dreams. When talking about entrepreneurship ecosystem for females, even the general entrepreneurship ecosystem is not conducive enough which is quite palpable from the poor indices of the Doing Business Report of the World Bank (World Bank, 2020a) and the Logistics Performance Index of 2016 published by the World Bank (World Bank, 2016). The Global Entrepreneurship Index of 2018 (Acs et al., 2018b) of the Global Entrepreneurship and Development Institute, Washington, D.C., USA, bears out the fact that the entrepreneurship ecosystem of Ethiopia is not conducive for the business. The global rank of Ethiopia entrepreneurship is as low as 110th among 137 countries, and it could obtain just a score of 18.3 out of 100. The index itself speaks a lot about the quality of the ecosystem, and one can imagine how far Ethiopia has to go to improve its business atmosphere for attracting innovative businesses. If we see the female entrepreneurship rankings, Ethiopia stood at 72nd position with a score of 20.9 out of 100 in the Female Entrepreneurship Index of Global Entrepreneurship and Development Institute, USA (Terjesen & Lloyd, 2015).

The perception of the people towards entrepreneurial opportunities is one of the strongest areas of the entrepreneurial ecosystem of a country (Nguyen, 2020). If the facilities including the government and the institutional environment are not able to meet the expectations of the budding entrepreneurs or those who want to start a new start-up, it results in a negative perception of the people in general towards entrepreneurial opportunities available in the country. Ethiopia is becoming prey to a weak perception of Ethiopians especially the females towards entrepreneurial opportunities in the country as is clear from the report of Global Entrepreneurship and Development Institute in which Ethiopians’ opportunity perception is just 34%. The majority of the people believe that opportunities for female entrepreneurship in the country are not sufficient. According to Abagissa (2013) and Mersha and Sriram (2019), a number of improvements need to be done to see a perceptible change. The initiative may include making loans easily available for them, bringing down tax rates and advertising the benefits of entrepreneurship accrues to the females and the country at large among others to build a positive perception of the people towards the availability of female entrepreneurship in Ethiopia. In addition to them, big companies need to respect innovative ideas from their employees, promote intrapreneurship culture and help the employees launch a new business. The government should also have a reward for the companies which bring in new ideas and innovative products in the markets.

Another area of the entrepreneurship ecosystem is the skilled workforce (Stam, 2015). It is without a doubt that the workforce is galore in Ethiopia (12th largest labour force country according to CIA World Fact Book (2020)), but most of them are unskilled or semi-skilled with no or limited educational background. A country cannot think of a pool of innovative ideas, products and the country’s prosperity unless it has a good stock of educated and skilled workforce. Berger and Fisher (2013) have rightly said ‘a well-educated workforce is a key to state prosperity’. Start-up skills are a must among females to attract female entrepreneurship. There is an acute shortage of start-up skills in the country which is stunting the growth of women entrepreneurs in Ethiopia. It is a matter of great concern that even in the twenty-first century the rate of literacy among females (secondary education) aged above 15 years is below 50% (UNESCO Institute of Statistics, 2021). What to talk of the percentage of females in tertiary education? But the saving grace is that female literacy among females after the year 1995 has increased at a fast rate. In the year 1995, the literacy rate among them was just more than 20% as per the UNESCO Institute of Statistics (2021). The inclusion of entrepreneurship as a subject for the students at technical, vocational and training colleges is a stepping stone and is expected to bring a sea change in the pool of available innovative minds in no time (Alamineh, 2020).

The government is mandated to provide broader access to tertiary education to the female population, develop incubators for them, bring in schemes to foster female students’ entrepreneurship and have a mechanism for the collaboration between the university and industries where female student entrepreneurs can try their hands. The large companies which are based in big cities such Addis Ababa and Awassa are also ethically bound to build an entrepreneurial ecosystem where women can try their hands. For it, they ought to sponsor start-ups by the budding female entrepreneurs, give the female students a place in their companies for internships, financially support their innovative ideas into reality, run skill development programs for the existing women staff, etc. New entrepreneurs or students who want to go into innovative businesses must approach and study the successful entrepreneurs around them to know how they succeeded in their ventures and how they dealt with the difficulties which came in the way. They should also participate in skill-based training programmes to help their dream to come true. All of these actions will indubitably enrich the entrepreneurial ecosystem of the country and pave the way for women empowerment along with economic development.

It can be derived from the work of Acs et al. (2018a) and Ayene and Abebe (2020) that the fear of failure of business among Ethiopians is also a big problem that is negatively affecting entrepreneurship in Ethiopia. The fear may arise because of one or a combination of factors such as political instability, lack of reserve funds with publics, lack of business acumen, negative societal attitude towards women’s entrepreneurship, lack of risk-taking spirit among the people, etc. Ethiopia has a persistent negative balance of trade (Rekiso, 2020), where a good amount of the products are from abroad which give the greatest competition to the locally produced goods (Wayessa, 2020). In fact, a large chunk of local products does not stand with the quality of imported goods which have inculcated a sense of fear among the promising entrepreneurs that their venture may fail before the presence of foreign goods. This fear, among others, is killing the very prospect of local entrepreneurship, and this holds good for women entrepreneurs as well. For instance, the influx of plastic utensils from China is a threat to those women entrepreneurs who deal in pottery items (Wayessa, 2020). The government has to instil confidence in the local entrepreneurs that many female entrepreneurs have succeeded in their ventures even in the presence of foreign competition, and the only thing which matters is patience, perseverance and novelty in the business processes. Along with it, there should also be a healthy mechanism of support against bankruptcy if the entrepreneurs fail in their ventures. Such a mechanism will strengthen their willpower of doing something new as they are a great resource for the nation and mitigate the damage in the case they do not succeed. As far as the big companies of Ethiopia are concerned, they are also expected to create an okay-to-fail culture in their organisations which will remove failure risk among those employees who want to do something in innovative ways. Moreover, risk-taking actions should be encouraged and rewarded from time to time. One has to keep in mind that hardly any innovative ideas which have revolutionised the world have succeeded at the first go. Failures are the stepping stones to success, and the failure-embracing culture must be promoted to attract new minds. Apart from it, a severe shortage of foreign exchange (Alam & Yigzaw, 2020) and its black marketing, high level of corruption and requirement of grease money to get the work done (Shumetie & Watabaji, 2019) are also adding to the woes of entrepreneurs in Ethiopia which need to be tackled on a priority basis. It is worth mentioning here that Ethiopia is one of the highly corrupt countries as has been said in the Corruption Perceptions Index of the Berlin-based Transparency International whose report is well-acknowledged throughout the world. Ethiopia stands at 94th position with a score of 38 on a band of 0–100 where 0 means the most corrupt (CPI, 2020).

Entrepreneurial networks and social contacts are also key factors behind entrepreneurial successes (Leyden et al., 2014). Networking paves the way for the formation of social organisations, and it helps right from the ideation stage to the execution of entrepreneurial venture. In the era of high-band Internet where personal relations and corporate connections are being built over it the world over, it seems that Ethiopia is lagging in terms of the adoption of communication technology and the Internet. The rank of Ethiopia Global Connectivity Index in the year 2020 was 79th with a score of just 23 out of 120 (GCI, 2020). The Internet penetration rate is more or less 18% (World Bank, 2017), and Ethiotel is the only internet provider as the field is closed for the private players (Kakuze & Wedajo, 2020). Apart from it, there are blackouts of the Internet from time to time (Workneh, 2018) and cases of Internet censorship (Ayalew, 2020), and the speed is rarely fast for video conferences. In the era of transportation and communication boom all over the world, such frustrating communication infrastructure stunts the growth of entrepreneurial networks within and outside of the country. Businesses cannot be efficient without decent networks of mobile phones and the Internet (Dana, 2007). There is a need to strengthen information and communication technology access and infrastructure. The stakeholders ought to showcase their crafts using virtual platforms and connect with the world using various online resources. Ethiopia is very strong in the manufacture of beautiful handmade pottery utensils and furniture items of decoration in which mostly women entrepreneurs are involved (Wayessa, 2020). There is a need to connect their work with the world using online platforms and doing so is expected to attract foreign buyers. All this is possible only when the ICT infrastructure is strengthened, and the use of it is stressed for the benefits of entrepreneurship including women entrepreneurship.

Cultural support too has a direct relationship with women entrepreneurship in a country as Dana and Ratten (2017) have rightly said that culture influences the identification of opportunity for entrepreneurship. A large chunk of Ethiopian female entrepreneurs is engaged in the production of those items which represent Ethiopian culture. The ministry of tourism and culture has a call to promote culture-based entrepreneurship in the form of expos and buyer-seller meets. It is a good job that the Ethiopian Development Research Institute is working to upgrade the conditions of women entrepreneurs. There is a need to have special sessions in schools, colleges and universities to inculcate a sense among students of the significance of women entrepreneurship in their lives and nation-building. The sessions must be backed up with concrete data on the effect of women entrepreneurship on the GDP of the country (Acs et al., 2018a) and live examples of successful women entrepreneurs in the country. In addition to it, companies should be instructed to have some cultural activities from time to time such as entrepreneurship week and entrepreneurship festival. Apart from it, finance is one of the key factors in an entrepreneurial ecosystem (Stam & van de Ven, 2019). The success of entrepreneurship depends to a large extent on whether the entrepreneurs in need of capital get the finance easily or not. Belwal et al. (2012) state that the conventional banking system of the country is not instrumental in meeting the needs of small entrepreneurs. The banking system suffers on many fronts such as poor lending policies, requirements for collaterals, costly provision of services and bureaucratic system. However, the financing of women entrepreneurs in Ethiopia by the Women Entrepreneurship Development Project (WEDP) has been doing a great job to meet their needs (WEDP, 2021). The project is run by co-financing from Canada, Japan, Italy and the European Investment Bank. Apart from the successful functioning of the Women Entrepreneurship Development Project, the government of Ethiopia is mandated to reduce administrative barriers and improve bureaucratic processes to let women entrepreneurship grow and prosper.

4 Women Entrepreneurship

Women entrepreneurs refer to those women who undertake business activities in an uncertain business environment. There may be differences in the definitions of the concept, but one thing is common among them, and that is the very nature that they organise and run a business enterprise. Some of the most famous women entrepreneurs in the world are Cindy Mi, CEO and Co-founder of VIPKID (an online teaching and education company); Nicky Goulimis, COO and Co-founder of Nova Credit (a cross-border bureau that prepares credit history reports for immigrants for helping them achieve financial services); Anne Wojcicki, CEO and Co-founder of 23 and Me (genomics and biotechnology company); and Heidi Zak, Co-CEO of ThirdLove (a garment company). On account of the growing importance of women in societal development during the last few decades (Bullough et al., 2021; Rosca et al., 2020), the research into the role of women in business for the benefits at large is getting literature positioning with utmost curiosity. It is without a doubt that women entrepreneurship has become very popular due to the very fact that women are being felt as a chief contributor to the economic development of a nation (Beriso, 2021; Haile, 2015; Rosca et al., 2020). The inclination of women towards businesses not only brings them repute and financial sovereignty but to the nations they belong to and challenges the subjugation of women and strengthens the social system. Keeping in mind the important role women entrepreneurs play in nation-building, efforts are being and must be made to inculcate a general sense of entrepreneurship and its importance among women for economic development at large. According to ILO (2016), women entrepreneurs account for more or less 30% of all business operations of the formal economy. However, the statement has to be understood with caution as only developed economies are fairly formal to a greater extent, and the rest of the economies including developing and transition ones are more informal in nature. Informal economies pose a greater challenge against the development of entrepreneurial activities. Ramadani et al. (2019) have succinctly described the problems facing entrepreneurs in the transition economies in the following words:

Any business in transition economies vs established economies requires sensitivity to a variety of conditions that are significantly different. These differences include: company and individual tax policy; governmental rules and regulations particularly those regarding hiring and firing, bankruptcy, business formation and dissolution, and import duties and restrictions, and currency; ease of business formation; facilitation of doing business; availability of government support (grants, evaluation, and training); the banking and distribution system; and the overall attitude of the government towards businesses. Depending on the nature and the extent of outside businesses doing business in a transition country, some issues are more acute for these companies outside the transition country and include: telecommunication problems; lack of skilled managers in some areas; labour force having different values and skills; political problems of doing business in the country(red tape, instability, unemployment, and inflation); currency problems; limited infrastructure and support; and problems due to the absence of concrete business laws, their enforcement, and interpretation.

Apart from the economic issues, societal attitudes against the participation of women in business activities, subjugation of women, men supremacy and other barriers in developing and underdeveloped countries inhibit women from venturing into business activities at par with men counterparts (Abagissa, 2013; Bullough et al., 2021). The exclusion of women just for taking care of household work has been experienced in many poor regions including sub-Saharan Africa (Jaim, 2020). Such inimical environmental forces debar them from utilising their full potential and stunt economic development. African countries are afflicted not only with negative sociocultural forces which come in the way of women entrepreneurship, the Ease of Doing Business Report of the World Bank (World Bank, 2020b) brings to light some additional hindrances against women entrepreneurship in Africa. The Ease of Doing Business Index ranges from 0 to 100, and there are 190 countries that are ranked. The index of a country’s business environment is based on ten sub-indices. A higher index suggests that the environment is business-friendly and vice versa. The report of 2020 reveals that almost all the sub-Saharan Africa countries have unsatisfactory DB (doing business) rankings, barring a few ones such as Mauritius, Rwanda and Kenya whose rankings are fairly better. The Regional Average Rank stood at abysmally low at 140th position with a score of just 51.8, a little more than average. Mauritius with a score of 81.5 has topped the list among sub-Saharan Africa as the 13th best country in the world for doing business. The other countries such as Rwanda, Kenya, South Africa, Zambia and Botswana stood at 38, 56, 84, 85, and 87 positions respectively. However, the conditions of other countries, namely Liberia (rank 175), Angola (rank 177), Equatorial Guinea (rank 178), Republic of Congo (rank 180), Chad (rank 182), Democratic Republic of Congo, (rank 183), Central African Republic (rank 184), South Sudan (rank 185), Eritrea (rank 189) and Somalia (rank 190) are very regretful. It is vividly clear that when the business environment is not conducive, one can hardly think of venturing into business, and the same holds more good in the case of women entrepreneurship in those countries. The condition of Ethiopia too is unsatisfactory in terms of doing business atmosphere as it could get only a score of less than average (48) and the country’s ranking was 159th among 190 countries of the world. It performs poorly on all the ten sub-indices of doing business. As far as starting a business in Ethiopia is concerned which involves several procedures, time, capital and other formalities, the Doing Business Report of 2020 reveals that Ethiopia stands at 168th position with a score of 71.7.

As per the report of doing business (World Bank, 2020a), the total number of days required for a woman to register a firm in Ethiopia is as high as 32 days as compared to just 10 days in OECD countries. The time duration in Ethiopia is far more than the average of sub-Saharan Africa which stood at 21 days. The documentation formalities are very cumbersome which must be aligned and reduced. Alignment in paperwork formalities promotes the small business sector and obstacles, and constraints deter the entrepreneurs from entering business (Dana, 1993). Similarly, cost including official fees and fees for legal or professional services related to the start-ups incurred by an Ethiopian woman is around 50% of the per capita income which is just 3% in the case of OECD countries. The statistics vividly points out that starting a business is a Herculean task here. Women entrepreneurs do need to construct an office or a warehouse to keep finished or unfinished inventory, and for the construction of such a set-up, they have to move from pillar to post as it is very bureaucratic and cumbersome. Ethiopia ranks at 142nd position among 190 countries in matters of the construction permit for building offices or warehouses. No business is possible without smooth access to electricity. To obtain a permanent electricity connection for the newly constructed office or a warehouse is also not easy. The country is among those where getting electricity for the offices or warehouses is tough. Ethiopia stood at 137th position in giving an easy electricity connection for the business. It underperforms in all the rest sub-indices such as getting credits, protection of investment and resolving insolvency.

One cannot imagine the involvement of women in business ventures at large unless and until something concrete is done to improve the business atmosphere for the business to flourish (Acs et al., 2018a). The rankings and the scores themselves speak volumes for the quality of the business atmosphere in the country, and the government is mandated to improve them if it wants the participation of women in the business for helping the country out of the financial morass (Alene, 2020). As far as logistical issues are concerned, Ethiopia has been suffering on the logistical front as well. The Logistics Performance Index (LPI) as developed by the World Bank portrays the health of the logistics system of a country which directly or indirectly determines entrepreneurial activities in a country. As per the LPI of 2016, Ethiopia with a poor 126th international rank out of 160 countries could obtain just 2.38 out of the maximum score of 5. As far as the customs clearance is concerned, the process here in Ethiopia is not speedy and simple. As per the LPI of 2016, the customs clearance could get a score of just more than average (2.60). The performance of Ethiopia on other indices such as quality of logistics-related infrastructure, availability of competitive shipment, competence among logistics service providers, ability to track and trace the consignment and timeliness is not up to the mark. All indices are more or less than average which does not herald a good sign for the prospective business. All the above-mentioned weaknesses, apart from others, stunt the growth of women entrepreneurship, and they need the urgent attention of the governments as to how they can improve in no time to help businesses and entrepreneurship especially women entrepreneurship grow and prosper for the benefit of the society (Beriso, 2021; Haile, 2015).

5 Towards the Future

Though there is a lack of relevant latest official data on women’s entrepreneurship in Ethiopia, the study suggests that women entrepreneurship is of greater need to help the women and the nation come out of deep financial distress. It seems from several initiatives taken by the government to inculcate a sense of business among women that the government is serious and wants women empowerment. But those initiatives could not bring any sea change in the status of women entrepreneurship in the country (WEDP, 2021). Ethiopia faces a plethora of challenges which are impeding and debarring women from diving into entrepreneurship. A large section of the women workforce in Ethiopia work in the informal sector, and a change in their orientation towards more productive operations can bring about a perceptible change in the fates of them and the country at large. But ample bottlenecks come in the way if they want to move towards entrepreneurial pursuit, and these hindrances, among others, are financial problems, regulatory issues, bureaucratic system, societal attitude towards women’s entrepreneurship, dilapidated business and logistics infrastructure, political disturbances and corruption (Abagissa, 2013; Beriso, 2021; Haile, 2015; World Bank, 2016, 2020a). There is no dearth of hardworking women workforce in the country (as is clear from Figs. 1, 2, 3, 4, 5, 6, 7 and 8), but they need supports to fly. Supports include easy access to finance, fair and accessible market for the goods produced, women’s entrepreneurship-friendly environment, global outreach to showcase their arts and crafts, skills and training and minimum support price for the goods produced if they fail to get suitable buyers. Apart from the above-mentioned prerequisites for women’s entrepreneurship in Ethiopia, the government has to ensure the safety and security of the lives and properties of women entrepreneurs. Intermittent political tensions in the Tigray and Oromia regions of the country have resulted in the arson, destruction of factories and warehouses and the exodus of people to safe places. Such instances instil a sense of fear among people and impede business. The government must ensure peace and stability in those areas and ensure a peaceful entrepreneurial ecosystem.

Fig. 1
figure 1

Map of the Horn of African (Source: https://www.un.org/Depts/Cartographic/map/profile/horne.pdf. Reprinted with permission)

Full size image
Fig. 2
figure 2

Entrepreneurial support from different stakeholders for fostering entrepreneurship among start-ups and small businesses in Ethiopia (Source: Adapted from Aspen Network of Development Entrepreneurs (2018))

Full size image
Fig. 3
figure 3

A shop opened by a women entrepreneur at Gofa Zone, SNNPR (Photo © Hafiz Wasim Akram)

Full size image
Fig. 4
figure 4

A women entrepreneur selling clothes (Photo © Hafiz Wasim Akram)

Full size image
Fig. 5
figure 5

Decorative items being sold by women entrepreneurs at a local market (Photo © Hafiz Wasim Akram)

Full size image
Fig. 6
figure 6

Utensils being sold by women entrepreneurs at a local market of Southern Nations, Nationalities, and Peoples’ Region (SNNPR) (Photo © Hafiz Wasim Akram)

Full size image
Fig. 7
figure 7

Furniture being sold by women entrepreneurs at a local market (Photo © Hafiz Wasim Akram)

Full size image
Fig. 8
figure 8

A one-room restaurant run by a woman entrepreneur at SNNPR (Photo © Hafiz Wasim Akram)

Full size image