Women s entrepreneurship from an institutional perspective: the case of Uzbekistan

Int Entrep Manag J (2008) 4:505 520 DOI 10.1007/s11365-008-0087-y Women s entrepreneurship from an institutional perspective: the case of Uzbekistan Friederike Welter & David Smallbone Published online: 5 March 2008 # Springer Science + Business Media, LLC 2008 Abstract This paper aims to make a contribution to our conceptual understanding of women entrepreneurship under early stage transition conditions, by researching the nature of it in Uzbekistan. Institutional theory is used as a guiding frame of reference because the specific characteristics of the external environment under transition conditions make the latter a particularly strong influence on entrepreneurship. Empirically, the paper draws on data which was collected in Uzbekistan, within a collaborative research project (INTAS 00-843). The empirical material demonstrates that informal institutions dominating Uzbek society contribute to the prevailing forms of female entrepreneurship. Keywords Institutional theory. Women s entrepreneurship. Uzbekistan. Transition Introduction The process of transformation towards market economies deprived a majority of women in the former Soviet states of their paid jobs, as well as most of the social security provided under socialism. In these conditions, female entrepreneurship is important not only to alleviate growing unemployment but also to take advantage of the potential contribution of women to economic and social transformation. In this F. Welter (*) SME Management and Entrepreneurship, School of Economic Disciplines, U. Siegen, Hölderlinstr. 3, D-57068 Siegen, Germany e-mail: welter@uni-siegen.de F. Welter TeliaSonera Institute, SSE Riga, Riga, Latvia D. Smallbone Entrepreneurship and Small Business, Kingston University Business School, Kingston Hill, Kingston-upon-Thames, Surrey KT2 7LB, UK e-mail: d.smallbone@kingston.ac.uk

506 Int Entrep Manag J (2008) 4:505 520 context, the paper aims to make a contribution to our conceptual understanding of women entrepreneurship under early stage transition conditions, by applying an institutional framework to women s entrepreneurship and researching the nature of it in Uzbekistan. The paper will examine the motivations and business aims of women entrepreneurs in relation to their business behaviour, assessing these in relation to a framework derived from institutional theory. Empirically, the paper draws on data which was collected in Uzbekistan, within a collaborative research project (INTAS 00 843, financed by the EU), dealing with female entrepreneurship in the Ukraine, Moldova and Uzbekistan. All three countries represent economies where entrepreneurship in all sections of society is at a relatively low level. Survey and case study data will be used to explore the behaviour of women entrepreneurs in relation to their stated aims for starting and running their businesses, seeking particularly (through the case studies) to identify any change in their motives and business behaviour over time. Institutional theory is used as a guiding frame of reference because the specific characteristics of the external environment under transition conditions make the latter a particularly strong influence on entrepreneurship, compared with a context where the formal institutional framework is more benign for entrepreneurs and the macro environment generally more stable (Smallbone and Welter 2006). Institutions include both formal and informal institutions, acting as enabling and/or constraining influences on entrepreneurship, creating opportunity fields (e.g. through appropriate and effective legal frameworks), but also adversely affecting entrepreneurship development if major institutional deficiencies or an institutional void (Polishchuk 2001) exists. The latter situation allows for the discretionary actions of local officials, fostering rent seeking behaviour on the part of entrepreneurs. Informal institutions include the normative and cultural-cognitive elements, which shape the collective sense making and individual understanding of social values and rules, which is in turn dependent on previous experience and knowledge. In this context, it can be argued that an institutionalist perspective is a particularly appropriate guiding frame of reference in a post-socialist context, where formal market institutions have yet to be installed and informal codes of conduct and path dependency are a major influence on entrepreneurial behaviour. Using this institutional framework, the first section of the paper comprises a literaturebased discussion on the distinctive contexts and roles of female entrepreneurs in post socialist countries, such as Uzbekistan, relating this to the Soviet legacy. From this conceptual background, the paper addresses the following specific questions: Why do women entrepreneurs in Uzbekistan enter entrepreneurship? To what extent does this reflect the overall institutional context? Do women business owners adapt their aspirations and behaviours to changing external conditions? What consequences does this have for the development of their businesses? To what extent is the post-socialist institutional context in Uzbekistan associated with distinctive patterns of women entrepreneurial behaviour? Women s entrepreneurship in a (post-)soviet context: an institutional approach The institutional embeddedness of women s entrepreneurship In analysing the institutional embeddedness of women s entrepreneurship, North s distinction between formal and informal institutions provides a useful starting point,

Int Entrep Manag J (2008) 4:505 520 507 since both constitute the incentive system of a society, as well as regulating individual behaviour (North 1990, 1995, 2005), of both men and women. Formal institutions refer to, for example, political and economy-related rules and organisations, while informal institutions contain uncodified values and norms of a society. North (1995) and Williamson (2000) also draw attention to the pathdependent behaviour of informal institutions, which are deeply rooted in society, changing slowly and over a long time period, which acts as a restriction for behavioural change. Institutions set boundaries for enterprise behaviour. Whilst informal institutions are the culturally accepted basis for legitimating entrepreneurship, formal institutions provide the regulatory frame (Wade-Benzoni et al. 2002). In other words, formal institutions create opportunity fields for entrepreneurship; but informal institutions determine the collective and individual perception of entrepreneurial opportunities. Examples of gender-specific formal institutions include the overall constitution ensuring equal opportunities for women and men. More specific formal institutions apply to labour market rules giving equal access to employment positions; family policies, such as specific tax regulations and the overall infrastructure for childcare; and property rights allowing for female ownership of land. Examples of gender-specific informal institutions include religion and traditions, which might shape the standing of women in society and influence their economic function. For example, a revival of religious values might impose strict rules on women, thus resulting in conflicting economic and societal roles, when women are (implicitly) forced to adhere to these regulations. Societal attitudes are reflected in the image of women entrepreneurs as, for example, portrayed in media and the public discourse. In this regard, research has shown that most Western cultures still portray the entrepreneurial role as being more masculine than feminine (Fagenson and Marcus 1991; Achtenhagen and Welter 2003). In transition countries, this takes an additional dimension, because gender roles are typically revised during the transformation period (Zhurzhenko 1999). Other cultural norms determining the extent of, and roles for, female entrepreneurship include the general value that a society attributes to female employment and the value attributed to the family. Whilst the former may contribute to women being pushed into self employment/ business ownership, the latter might result in a gender-specific role distribution, with little time for potential women entrepreneurs to pursue economic opportunities. It also refers to the role of the extended family as both a resource for entrepreneurship and a possible constraint. The informal institutions reflected here influence the responsibilities, tasks and the workload that women entrepreneurs would have to cope with as well as any assistance from their milieu they might expect when setting up their own enterprise. Informal institutions, manifesting themselves in cultural norms, traditions and religion might therefore result in presuppositions concerning the roles ascribed to men and women (Chell and Baines 1998). This in turn could influence the routes for women into entrepreneurship as well as the extent of female entrepreneurship, the form their entrepreneurial activities take and also their success. For example, research on young entrepreneurs in transition economies has revealed that female entrepreneurs in the newly independent states (NIS) were more likely to pursue a business with their husband/friend or father as partners or guardians, whilst in

508 Int Entrep Manag J (2008) 4:505 520 Central European countries it was apparently easier for women to act as entrepreneurs on their own (Roberts and Tholen 1999). Although this might be partly a result of differing business environments at different stages of market development, it also reflects gender specific roles with respect to the role of women and the overall entrepreneurial image in NIS countries. Institutional change has a positive influence on (female) entrepreneurship in those cases, where it removes or lowers barriers to market entry and market exit, thus creating opportunity fields for entrepreneurs, and vice versa. Examples of positive changes, which would foster women entrepreneurs, include the introduction of private property rights at the beginning of the transformation process in some former socialist countries. However, the path-dependent behaviour of institutions, in particular informal ones, has particular relevance for female entrepreneurship, drawing attention to the possible effects of the Soviet legacy on today s nature of women s entrepreneurship. Gender roles in Soviet Uzbekistan This section will explore gender roles during Soviet period, drawing on the institutional frame outlined above and using Uzbekistan as example. Despite an ideological commitment to promoting emancipation through the participation of women in the labour market (Kerblay 1977), women continued to face conflicting roles in economy and society, during the Soviet period. This is particular obvious in Central Asia, where the Soviet system propagated gender equality while local customs continued to ascribe traditional roles to women. Important social developments, with a long-lasting effect on the status of women especially in the Central Asian republics, were the policy of unveiling and illiteracy liquidation during the early 20th century, which enabled women to become a notable part of the workforce. Overall, the situation of women during the Soviet period improved compared with the pre-soviet times, when Uzbek women had to live according to the rules of shariah. Although Muslim women could earn income through home crafts, mastership and literacy teaching, this was required to be homebased and only men could work outside home (Tokhtakhodjaeva 2000: 30). However, in traditional societies, such as the Soviet Central Asian republics, the essentially top-down emancipation process failed to involve women from all layers of society. Although the Soviet system partly created a women s nomenclature, it failed to overcome the traditional attitude towards women. This particularly affected young women and girls, whose rights were limited to a considerable extent by the family context. Girls were still expected to obey the eldest person in the family and/ or their husband, and these values were particularly pronounced in the countryside (Tokhtakhodjaeva 2001). Within families, the patriarchal order prevailed with women being in charge of family budgets, household activities, bringing up children and serving their husbands. Gender roles stereotypes continued to define the household as a female sphere and work as essentially a male sphere of activity (Turetskaya 2001). As a consequence, although theoretically based on concepts of equality, in practice, the Soviet system discriminated against women, who experienced a glass ceiling in politics and economy. Despite its commitment to working women, the

Int Entrep Manag J (2008) 4:505 520 509 state tacitly acknowledged and supported male dominance in the public sphere (Ashwin 2000). Men held most leading positions in politics, as well as in state enterprises, which resulted in women being omitted from the Soviet nomenclatura, parallel circuits in state firms and other high level networks, which have previously been suggested to be important influences on the development of entrepreneurship during the transition period (Smallbone and Welter 2001). Consequently, at the beginning of the transition process, women had fewer opportunities to enter entrepreneurship through privatising large state firms, or through setting up small spin-offs firms from larger state enterprises. They also had less opportunity to draw on networks containing people of influence, emphasising the importance of know who in such contexts. Thus, different institutional realities existed for women within Soviet societies (Ashwin 2000; Kiblitskaya 2000; Kandiyoti and Azimova 2004; Zhurzhenko 2001), prescribing different roles for them, with implications for their opportunities to engage in entrepreneurial activities. This includes the officially propagated gender equality, fostering women s labour market participation; the worker-mother role model of Soviet societies, which placed a dual responsibility on women for performing the roles of successful worker and successful mother (Aivazova 1998); and the persistence of the traditional Central Asian social order with distinctive age and gender hierarchies, arranged marriages and the central role of the mahalla (Kandiyoti and Azimova 2004), which refers to a specific territorial community structures (cf. Geiss 2001). Gender Roles in post-soviet Uzbekistan During the transition period, the economic and social roles of women underwent an enormous change, leading to conflicts between family needs, women s responsibilities and their individual wishes. Many achievements of the Soviet period can be regarded as superficial and the underlying process was authoritarian rather than rights-based (Fajth 2000). With respect to women s roles, the Soviet state left a paradoxical legacy with strong and independent women who nevertheless ended up doing all the housework (Ashwin 2000: 18). Whilst the Soviet working-mother contract is responsible for the ongoing interest of women in work, the responsibilities of motherhood became redefined. Following the destruction of the state social welfare and childcare system, post-soviet governments transferred motherhood and family responsibilities back into the private sphere, which post-soviet societies were quick to accept thus resulting in a renaissance of patriarchy (Zhurzhenko 1999: 246). This concept of male guardianship (Akiner 1997: 287) in public and private life has enormous potential consequences for female entrepreneurship. Such a trend is not surprising in the Uzbek context because in Central Asia, cultural values emphasising family relations, which survived throughout the Soviet period, had gained momentum already during perestroika, marked by the increasing affirmation of Uzbek national identity (...) involving the promotion of native practices and a questioning of Soviet values. (Agadjanian and Makarova 2003: 450; Tabyshalieva 2000). Additionally, Islamic ideas have gained political ground during the transition years, allowing Uzbek fundamentalists, for example, to extend the religious order of Islam to women s rights, affecting their personal attire and their public appearance (Ilkhamov 2001; Hanks 2007). This partly built on the legacy from the pre-soviet

510 Int Entrep Manag J (2008) 4:505 520 period, where the social status of a Muslim woman and her mode of life was shaped by the sexual segregation that is prescribed by the shariah. Today, the revival of Islamic values restricts the activities of women, especially in those Uzbek regions such as the Ferghana valley, where men enforce Islamic values on women, despite the fact that the current government is determined to control any political Islamic movement (Tazmini 2001). On the other hand, widespread and rising female unemployment, combined with growing labour market discrimination forced more and more women into business ownership, in order to be able to support their families. This happened especially in the early years of transformation and in countries where reforms did not progress quickly. Moreover, although post-soviet women look for emotional, practical and financial support from their spouses, they also value the independence that any paid work gives them. Despite the fact that this type of activity is typically restricted to low-value and low-growth activities (at least from a macroeconomic point of view), it helps to strengthen women s economic status. Whilst female entrepreneurs contribute to the process of transition at both the microeconomic and macroeconomic levels, informal institutions in the form of cultural traditions reinforce the traditional role of women in Uzbek society, which is subordinate to men. For example, the Women s Committee of Uzbekistan has staged nation-wide competitions to identify the Best daughter-in-law, highlighting the qualities of docility, maternal caring, and competent housekeeping (Kandiyoti and Azimova 2004: 346). Sociological surveys have shown that this subordination serves as a major obstacle for women to take independent decisions on issues related to their own destinies. The woman does not decide herself when and whom to marry, what profession to choose, how many children to have, and what career to build (Tokhtakodjaeva 2001). So whilst driven by economic reality, the engagement of women in entrepreneurial activity may be seen as a challenge to subordination. The collapse of the social and health systems following the transition to a marketbased economy added to the societal pressure on women to stay at home, in order to care for elderly or sick family members and children. Women also disappeared from public life, which is reflected in the decreasing share of female politicians decreased from 35% at the beginning of the transformation process to a mere 6% in 1994 (Tokhtakhodjaeva 1998). In addition, the mahallas, which nowadays are selfgoverning neighbourhood communities acknowledged by the Uzbek state, continue to play an important role in supervising women s public and private behaviour. On the other hand, since 1995 the state has adopted a number of protectionist measures designed to strengthen and raise the rights of women and to render support to the women s movement. Active government measures, which are aimed at supporting the development of small and medium-sized businesses in the country, assisted women (amongst others) in setting up small businesses, although the recent shift towards an import-substitution policy has tended to drive small (female) traders and female entrepreneurs relying on imported raw materials out of business. Moreover, the ongoing redistribution of state ownership has concentrated the overwhelming majority of income-generating resources in men s hands, because the privatization process hardly benefited women. This was because typically women did not possess sufficient resources to allow them to become owners of large or even medium property, which means that their involvement in privatisation was largely restricted to so-called

Int Entrep Manag J (2008) 4:505 520 511 smallscale privatisation of shops and restaurants. The reform of agricultural enterprises and their privatization also took place without women s participation. As a consequence, very few women participated in privatization to create their own firms or farms. Thus, despite all efforts and the fact that the Constitution of the Republic of Uzbekistan decrees equal rights for women and men, progress in this regard has been slow, thereby restricting the nature and extent of female entrepreneurship. Women s entrepreneurship in Uzbekistan: empirical evidence Methodology and data A survey of female entrepreneurs and a control group of male entrepreneurs was carried out in the summer of 2002, based on a standardised questionnaire. Topics included in the questionnaire dealt with characteristics of the business and the entrepreneur, business objectives, enterprise development and performance, financing issues, household and family, gender as barrier and/or enabling factor, support needs and the business environment. A total of 200 women and 60 male entrepreneurs were interviewed in four Uzbek regions, namely in Tashkent, Bukhara, Namangan, and Fergana Oblasts, i.e., 50 women and 15 men per region. The choice of the capital of Uzbekistan was determined by its special status among the other regions in social, economic and demographic respects. In Bukhara Oblast, many women are engaged in traditional handicraft trades, whilst Namangan and Fergana Oblasts represent regions with strong religious traditions. In addition, 35 case studies with selected female entrepreneurs (30) and male entrepreneurs (5) have been undertaken in spring 2003, in order to offer additional insights into the entrepreneurship process. The idea was to investigate businesses and strategies for business survival and development in detail, in order to identify factors inhibiting or favouring female entrepreneurship at the micro level, as part of a wider attempt to assess their (potential) contribution to economic and social transformation. These interviews were conducted face-to-face, using a topic guide and focusing on the following topics: the business inception stage; the first years of trading; the development of the business idea; relationships with third parties and the business environment; and the personal satisfaction of the entrepreneur. In Tashkent, the project group interviewed 15 women entrepreneurs, in Namangan 15 plus 5 men. The results were recorded in written protocols and a summary report. Women entrepreneurship was defined using both quantitative and qualitative criteria. A women entrepreneur qualified for the survey in case more than 50% of the business belonged to her and she was the key decision maker in a co-owned business, i.e., she had to be involved in all key management areas. Moreover, we excluded business with more than 50 employees, since the project was only concerned with small firms. Sample characteristics The sector distribution of women-owned businesses in our survey reflects a picture familiar in Western countries. Most women businesses have been set up in services

512 Int Entrep Manag J (2008) 4:505 520 and trade followed by manufacturing, which accounts for nearly one quarter of all surveyed women enterprises. In addition, a large share of women entrepreneurs set up a business in agriculture (14%). Manufacturing comprise a wide range of activities, such as manufacture of toys, food processing, textile production. Moreover, traditional crafts (e.g., gold embroidery, carpet weaving, and silk weaving) play an important role. Trade includes both retail and wholesale activities, whilst services range from simple to more complex activities such as medical services or language schools, transport and lawyers. More than half of the enterprises employ between one and ten employees, with another third up to 50 employees. The most commonly reported problems when starting their enterprises were connected to finance, followed by a lack of premises. Women entrepreneurs in the sample were mainly between 40 59 years of age, with another 22% between 30 and 39 years. The age distribution is a reflection of the traditional values discussed above, which attribute a housebound role to girls and younger women. In comparison to men (20%), only 6% of Uzbek women entrepreneurs were below 30 years old. Half of women business owners had university level education, followed by 37% educated to secondary vocational level. This differs across regions, although surprisingly perhaps, there appears no be no clear link between traditional regions and the propensity of women entrepreneurs to be less well educated. Both Tashkent and Namangan have a higher share of bettereducated women, whilst the share for women entrepreneurs with vocational training is higher in Bukhara and Fergana. Before starting their business, women were mainly employed in the state sector; only a negligible share (7%) had also worked in private businesses, compared to 28% men, which again emphasises the dominant values of a traditional society. Another 4% did not work for family reasons. Nearly half of the women had obtained some management experience in their previous employment positions. Motivations and business aims of women entrepreneurs Whilst a lack of alternative employment opportunities affects both men and women in a post-socialist context, empirical data reveals some subtle differences in the reasons given by women for starting a business, compared with men. Specifically, opening up a business appears to represent one way for Uzbek women to gain independence, in the sense of being able to do something for themselves. This is reflected in our survey data, where the main motives for starting a business between sexes show that women first of all strive for independence when setting up their business: 25% women named this as their most important motive compared to only 3% of the men. Interestingly, push and pull motivations play an equally important role for Uzbek women entrepreneurs, although the motives named also point to the role of institutional factors, such as changes in the labour market as driving forces which affected women to a larger extent than men. 45% of the women named pull motives, such as a desire for independence, self fulfillment or the desire to have an own business, whilst 41% pointed out push motives such as unemployment (14%; 2% men), income increase (13%; 12% men) or provision of income (15%). The latter was more often named by men (18%) compared to women. Enabling factors, which includes motives such as availability of resources or response to

Int Entrep Manag J (2008) 4:505 520 513 market opportunities, played a more important role for Uzbek men (25%; 14% women). In this context, the case material adds to our understanding of what concepts of desire for independence, market opportunities and necessity mean in the Uzbek context. For example, independence is often not related to professional independence, but to gaining more social and economic freedom in a traditional society. This can be illustrated by the case of an entrepreneur, who owns a small firm, manufacturing and repairing clothes and other textiles as well as training women to sew. The woman had been a director of the same firm, then state-owned, for 22 years. When the process of privatisation began in 1991, she quickly decided to buy the company, in order to keep her job and those of the employees. Taking into account that we asked entrepreneurs for their motivations retrospectively, which is not ideal because of issues such as retrospective rationalisation and that the push versus pull categories define motivations in a rather deterministic and dichotomous way (Amit and Muller 1996), nevertheless the data show that women entrepreneurship in Uzbekistan is stimulated by both a desire for personal autonomy and an economic necessity. This is reflected in women having a variety of motives to start a business, where both push and pull factors appear to overlap, which supports the view that these categories should not be viewed as being mutually exclusive. However, with respect to the respondent s current business aims, the data show how motivations can evolve, as individuals learn and/or the external environment changes (Table 1). Whilst income goals still play a more important role for women compared to men, a large share of both groups is growth-seeking, suggesting that what may begin as a form of proprietorship can evolve into more entrepreneurial behaviour. This will be explored in more details in the next section. Starting and developing a business: proprietorship or entrepreneurship? Drawing on Scase (1997), proprietorship would be reflected in notions such as starting a business in order to sustain a family or to raise income, in situations where women have no better work options. It can also be connected to spells of unemployment or hidden unemployment, given the fact that women also mentioned not getting paid for a long time, or taking up business activities additional to their waged employment, in order to supplement income. In that case, women entrepreneurs would have little surplus income to invest in developing their Table 1 Most important business aim in Uzbekistan by sex Business aims Women Men Growth 70.0% 76.7% Providing living for family 11.5% 8.3% Increasing personal/household/family income 10.0% 3.3% Survival 7.0% 11.7% Total number 200 60 Own survey respondents were asked to state three business aims for the last 12 months in order of priority. This table reports data for the most important aim. Data do not add up to 100% because two minor aims (reducing shadow turnover, preparing for selling business) were left out.

514 Int Entrep Manag J (2008) 4:505 520 business, preferring instead to use the income derived from business to sustain themselves and their families. Entrepreneurship as understood by Scase is reflected in those cases where women entrepreneurs either start businesses to respond to specific market opportunities or niches identified, or, in a wider understanding of opportunity, state that they had resources available. Market niches appeared in the service sectors at the beginning of the transformation period, while resource availability refers both to financial and social capital resources. The latter becomes apparent where women entrepreneurs privatised their previous working place. However, what emerges from our case evidence is that the distinction between proprietorship and entrepreneurship is not clear-cut. Interestingly, most cases demonstrate that women entrepreneurs do not fit neatly into either the proprietor or entrepreneur as exclusive categories. The case studies include elements of entrepreneurship as well as proprietorship, as women simultaneously named both income reasons and a desire to realise a specific business idea, as motives for start up. Although this may partly reflect hindsight on part of the interviewees at the time of the interview, it also points to the difficulty of applying a static category (i.e. proprietorship) to a potentially dynamic, process-oriented phenomenon, i.e. the starting and running of a new venture. Instead, case evidence shows more complex relationships between entrepreneurship as an economic necessity, or responding to potential market niches, and a desire to realise a dream at start up, where during business development women entrepreneurs switch between categories. For example, a woman entrepreneur in the Namangan region set up her business in 1993, specialising in sewing and selling national costume (chapans) and children trousers. The entrepreneur is 47 years old and had been teaching at a school for 27 years before starting her own business. Venture creation was motivated both by a demand for higher quality goods at the beginning of the 1990s, as perceived by the entrepreneur, and by her need to supplement her teaching salary. Whilst initially the business was profitable, this changed after 1997, due to an increase in competition from illegal firms. The entrepreneur responded by planning to give up her sewing production and instead, settling on food processing, i.e., drying tomatoes and processing tomato paste, which she considers more rewarding in terms of income under the current economic circumstances. In this case, her current entrepreneurial activities appear to be driven by necessity reasons, as the need to generate income appears to be the key driver. However, although women entrepreneurs might be primarily survival-oriented either at business start or subsequently (e.g. at the time of the interview; i.e., belonging to the category of proprietorship), their personal ambitions could still be driven by genuine elements of entrepreneurship. For example, this entrepreneur started her metal and wood production in order to contribute to the family income; in other words, her actions were mainly driven by necessity to support current consumption rather than capital accumulation. Today the entrepreneur emphasises entrepreneurship as a possibility not only to earn money, but also to realise her own ambitions. Provided with a similar choice today, she stated that she would still go into entrepreneurship. The opposite is reflected in another case, where in 1995 the mother of this woman entrepreneur initiated privatising a hotel, which was her previous working place.

Int Entrep Manag J (2008) 4:505 520 515 Although the woman we interviewed took over as Managing Director in 2001, referring to plans to restructure her hotel according to international standards, she also revealed conflicts between her own ambitions and interests and the influence of the dominant social background. Raised in a family, which values Central Asian traditions, she remains responsible for all household duties as well as raising her children. Being an entrepreneur helped her to acquire professional skills, enabling her to communicate with people, rely on her own capabilities and improve her societal standing. On the other hand, she stated that she would be interested in taking up a job with stable and decent earnings, if the opportunity were presented, although she claimed that her parents would not allow her to leave the hotel, which now is a family business. In general, women entrepreneurs pointed both to learning experiences and to their high personal satisfaction from being involved in business ownership, without neglecting the potentially negative sides of entrepreneurship such as having less time for family and friends or health-related problems of working excessively long hours. Personal satisfaction is related to issues, such as being able to realise childhood dreams ; or finding a market niche; being in control and the leader; being independent from husband and family; as well as being reflected in the nonmonetary benefits associated with satisfying customer needs. All this contributes to a multifaceted picture of women s entrepreneurship in a transition context, questioning dichotomous and oversimplified concepts of individual motivation, such as proprietorship versus entrepreneurship, or for that matter, necessity versus opportunity entrepreneurship. Institutional environment and women s entrepreneurship The cases also draw attention to the particular influence of the institutional environment in shaping the nature of women entrepreneurship, in post-socialist countries such as Uzbekistan. This refers to economic and sectors conditions, as well as cultural influences in a broad sense. Case evidence demonstrates the influence of particular regional conditions, as several of those women entrepreneurs we interviewed in Namangan appeared more ready to give up their business activities, provided they would find a job elsewhere, compared to both those in Tashkent and those in more successful ventures with growth-potential in their own region. This draws attention to the recursive links between the national/regional (economic) environment in affecting business opportunities, as well as the level of personal satisfaction. In these cases women might not have started a business out of pure necessity, but the decision to remain involved in entrepreneurship was clearly linked to economic needs, with little profit left which could be re-invested. For example, one woman started a service company in Namangan region in 2002, based on her previous working experiences and a desire to set up her own business. However, regardless of the benefits she associated with being an entrepreneur, such as gaining more independence within her family (although she is married and has a young son, she has to live with her parents, as the husband works in Moscow), or gaining entrepreneurial knowledge and skills, this woman would readily give up her business, provided she could find a job with stable earnings.

516 Int Entrep Manag J (2008) 4:505 520 In addition, several cases illustrate the effects of changes in economic conditions, which can trigger a shift from entrepreneurship to more survival-oriented proprietorship in later years of business development, or vice versa. The empirical reality in Uzbekistan showed that an increase in competition over the years, combined with decreasing purchase power of customers and changing laws, encouraged women entrepreneurs to take on additional activities such as (shuttle) trade, or to extend their production into low-cost food processing (e.g. of dried fruits), facilitated by the fact, that most households own small plots of land. This diversification often results in a broad and unrelated portfolio of business activities, reflecting a short-term need to overcome pressing financial and environmental constraints, rather than a conscious strategic decision. (Welter and Smallbone 2003). Such behaviour is stimulated by an attempt to secure incomes and to survive. This may be illustrated with reference to an example of an entrepreneur who privatised a state optics company in the Namangan region because she perceived a niche market opportunity. Whilst the wholesale and retail trade in medicines initially provided her with sufficient capital to privatise her previous place of work, the imposition of severe import regulations posed unsolvable problems for her, related to both optics and medicines. Currently she sells products from her own farm, and is considering diversifying into buying her own livestock. Cases also show particular cultural influences on women entrepreneurship in the Uzbek context, which tend to foster low-threshold and low-income business activities with less potential for business growth. For example, in this case a lack of any specialized training, which was due to the traditional attitude of the woman s father towards girls education, left this young woman with no choice but to take up a traditional business activity, such as gold embroidery and sewing after her father s death, because this was one of the few vocational training opportunities available to her. The main motive to go into business was income-related, as the father had been the sole breadwinner in the family. Similar to her, two of her three sisters set up home-based traditional business activities in carpet weaving and cookery, and all three became involved in training unemployed girls in these activities. The business had been set up in Chartak (Namangan region) in 1999, but suspended in June 2001, because of a lack of demand associated with low purchasing power of customers and strong competition. The latter is not surprising, given both the low entry costs and the traditional background of this particular business line, which is one of the few activities left for girls and women in traditional-oriented households in Uzbekistan. In a traditional environment, where widows and young women are not expected to act on their own, assistance from family sources is a necessity, when women become involved in business ownership. This can be illustrated with reference to the entrepreneur mentioned above, who at 34 years of age, opened a sewing business in Namangan. Her mother accompanied her when she first registered her business with the authorities. Only as the business developed, and the young female entrepreneur gained in confidence and developed her own contacts, did this aspect became less important. Moreover, the specific local environment, (i.e., the mahallas), plays an additional role in enabling (or constraining) women entrepreneurs, mainly because of the attitude of neighbours towards women, who start and run businesses in Uzbekistan. Our case studies from Uzbekistan illustrate an ambiguous picture in this respect (also

Int Entrep Manag J (2008) 4:505 520 517 cf. Welter et. al. 2006): Some women entrepreneurs, who set up their business in the local neighbourhood, referred to envy being shown towards them on the part of some neighbours, which is reflected in the comment: they don t send their girls into my sewing school, but take them to another district. At the same time, it is common for woman entrepreneurs to support their communities, for example, by training local girls, or by offering reduced prices to local people. Indeed, social responsibility was commonly demonstrated by women entrepreneurs in Uzbekistan in various ways. This includes the woman in Taskent mentioned above, who purchased a small clothing factory which she had been managing, when it was privatised. Her management approach involved employing more staff than was necessary, allowing them to use the sewing machines in the factory for one day per week to produce their own goods for sale. When asked about her motives for buying the business, her answer emphasised the importance of maintaining jobs for employees of the former state owned plant. Conclusions and implications There are a number of specific characteristics of women s entrepreneurship in early stage transition countries such as Uzbekistan that emerge from the case studies. These include an external environment with formal institutional deficiencies that hamper the development of productive entrepreneurship, for both men and women, although not necessarily equally. In terms of formal institutions women-owned businesses in Uzbekistan share many barriers with men, e.g., tax laws, access to finance or corruption. Here, improving the overall environment for business will help women as well as men. However, informal institutions such as codes of behaviour and cultural influences, affect the nature of women s entrepreneurship in particular. In combination with economic necessity, this results in a large part of women-owned businesses to be home-based, supporting current consumption for families and households, rather than being driven by a strong desire to accumulate capital. In this respect, the evidence presented leads us to conclude that the informal institutions dominating Uzbek society contribute to the prevailing forms of female entrepreneurship, a large part of which will involve home-based or subsistence activities in an attempt to combine family responsibilities with the need to generate income for the household. At the same time, the case studies reveal that women entrepreneurs typically possess considerable human capital, reflecting a typically high education level (by western standards), with previous management experience in many cases. Although this experience would typically have been in state-owned companies, operating outside market rules, such a background is often associated with an ability to learn quickly with regard to the creation and exploitation of entrepreneurial opportunities, even if these are not apparent when the business is founded. A combination of human capital and a rapidly changing external environment can result in changes in aspirations, motives and business performance over time that makes static concepts such as proprietorship potentially misleading. As a consequence, whilst the types of women entrepreneurship found in post-socialist economies where market reform has been slow, often resemble what Scase (1997) has termed

518 Int Entrep Manag J (2008) 4:505 520 proprietorship, driven by institutional forces which are largely beyond the control of individuals (such as labour market changes), this classification also is an oversimplification. The specificities of the transition context can lead to even well educated people being presented with limited opportunities for satisfying and sufficiently rewarding employment. It appears that under the conditions and turmoil during the early stages of transition particularly, entrepreneurship is one of the few fields where an educated, professional person can satisfy her need for creative and satisfying work, whilst obtaining sufficient income for an acceptable standard of living. This propensity of entrepreneurs, in early stage transition conditions, to be highly educated is a consistent theme emerging from the transition literature (see for example, Smallbone and Welter 2001). In this regard, our evidence from Uzbekistan suggests that an initial necessity push into enterprise activity and subsequent acting as proprietors does not preclude women business owners acquiring those attributes associated with entrepreneurship over time. This can include the identification of new market opportunities, innovation and creativity, and the ability to adapt to rapidly changing external conditions. In the context of a fragile environment, such as in Uzbekistan, it is clear that proprietorship and entrepreneurship do not have clear cut boundaries, nor are they mutually exclusive, but rather are dependent on the economic and institutional environment. Instead, women entrepreneurship appears to be characterised by phases where the necessity of being an entrepreneur alternates with periods where the economic situation of the business allows for re-investment instead of spending the business income for family purposes and vice versa. Here, our evidence demonstrates learning experiences of women entrepreneurs who might have entered entrepreneurship for necessity reasons, but are learning over time how to expand and adjust their business fields in order to make use of opportunities as they present themselves and/or can be created. This implies that new venture creation, and consequently business development, must be viewed as a learning process, which means that business aims and motivations can operate at different levels. These include deep-seated antecedent influences, as well as immediate triggers, which in turn may be influenced by a specific set of external conditions, as well as by personal circumstances. As a consequence, women entrepreneurship under transition conditions involves the recognition of opportunities, although resource constraints and other institutional restrictions may limit their exploitation to relatively simple activities. External influences such as particular cultural traditions constrain women entrepreneurs in Uzbekistan, although the case evidence also demonstrates a remarkable ability (and willingness) to overcome these constraints. In this regard, our results clearly indicate the local embeddedness of women entrepreneurship in an environment, which is both fragile in institutional terms and dominated by traditions. This underlines Johannisson et al. s concepts of systemic (economic) and substantive (social) embeddedness, drawing attention to the fact that any business activity reflects a complex socio-economic phenomenon (Johannisson et al. 2002: 298). In this respect, our main conclusion is to emphasise the importance of viewing women entrepreneurship in its social context, which means that reported motives relating to factors such as independence, autonomy, and self-fulfillment must be

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