(Illustration by Laura Liedo)
Omniah was in her late 20s and had a stable corporate job working for an international company in Jeddah, Saudi Arabia, when she first came across the term social entrepreneurship. She heard about it through a friend who was studying for a master’s degree in the subject abroad. After spending a lot of time reading and listening to videos on the topic, Omniah decided to take the leap and start a social enterprise.
The transition was not easy. She found that her friends and family didn’t know what social entrepreneurship was. Time and time again she had to explain the field to them. They could not fathom why she would leave her stable-paying job and start what they assumed was a charity. She also had to explain social entrepreneurship to potential funders and investors, and she needed to find other social entrepreneurs in order to identify the right business networks to join.
How do female social entrepreneurs learn to survive and even thrive in non-Western contexts where social entrepreneurship is still emerging? We studied these questions between 2014 and 2019 for a PhD dissertation at the University of London’s department of management and finance in the School of Oriental and African Studies. We investigated both female and male social entrepreneurs in Saudi Arabia and focused on their use of social capital and wasta—the system of patronage in the Middle East often compared to favoritism and nepotism in the West. In 2021, we followed up on the social entrepreneurs we had studied.
We found that Saudi female social entrepreneurs do face significant barriers to growing their enterprises, but they can exploit some advantages over their male counterparts by navigating deep social ties with family and close friends. Our research can help inform efforts to support female social entrepreneurs in the Middle East and North Africa (MENA), as well as elsewhere in the world where women face similar social circumstances.
Wasta and Social Capital
In Saudi Arabia, participation in social entrepreneurship has not shown significant increase in the past five years: The number of social enterprises has remained steady at approximately 2,597-3,000. At present, Saudi Arabia has 1 nonprofit per 10,000 people. By contrast, Canada and the United States have 1 per 50 people, and France has 1 for every 200. However, Saudi Arabia has recently signaled its interest in growing the field. In June 2021, Saudi Arabia’s Council of Ministers approved establishing the National Center for the Development of the Non-Profit Sector (NCNP), which will regulate the sector. Despite such government support, female social entrepreneurs face significant barriers that are shared with their counterparts globally.
Specifically, we found four general trends. First, female social entrepreneurs have fewer resources than their male counterparts because of their limited access to social circles outside the family. Women are regularly excluded from traditional business networks and as a result lack access to information from those networks. Networks of women typically appear to include fewer entrepreneurs, and their networks are more homogeneous. Females also felt they had to work harder to receive trust and respect from their investors and sponsors.
Second, support from strong ties is vital to female social entrepreneurs’ success. By strong ties, we mean relationships with close friends and family members with whom the individual has interactions that are frequent, based on mutual trust, and grounded in deep emotional connection. Strong ties may provide sources of labor, informal access to capital from friends and family members, social support, and sensitive information that is most often available only through high-trust relationships.
In particular, family support—especially the support of husbands—strongly affects the success of female social entrepreneurs. For instance, traditional sources of funding for Saudi women entrepreneurs are usually fathers, husbands, or other family members who normally provide sufficient capital for small-scale business ventures. The progress of women in Saudi society is therefore closely linked to the supportive role of their close and extended family.
Paradoxically, some respondents cited family as a chief obstacle to growth, while others cited it as one of the most important contributors to growth. Gender roles among families depend on factors such as the level of education, socioeconomic class, and urban-rural background. For example, two founders of social enterprises, one devoted to female unemployment and the other focused on food waste, explained that their families had supported their higher education to pursue a fellowship or master’s degree in social entrepreneurship and showed understanding and belief in the work of their daughter as a social entrepreneur. “My family thought it good to have a daughter and wife helping society, even if it is not well paid,” one female social entrepreneur said.
The opposite was true for two other social entrepreneurs—one focused on youth and the other on female unemployment—who faced opposition from their immediate family and depended on weaker ties for funding and other forms of support. As a result, they struggled more to grow.
Third, female social entrepreneurs received less support from their weak ties compared with male social entrepreneurs. By weak ties, we mean the diverse group of people who fall outside of the strong-ties circle but who may still provide capital and support: customers, suppliers, financial institutions, all of whom an individual interacts with infrequently or casually on an irregular basis. In line with other findings on female entrepreneurs, Saudi female social entrepreneurs draw their confidence and support from family members while continuing to face many challenges related to access to financing. Saudi males, by contrast, face pressure from family and society’s views on social entrepreneurship and its suitability as a profitable job for breadwinners. This is because social entrepreneurship is considered charity work by some of the male social entrepreneurs’ families. “My family does not understand why I want to set up a social enterprise that doesn’t pay much and is focused on women’s employment,” a male social entrepreneur told us. Instead, males found it easier to network through, and had easier access to, weak ties.
Fourth, wasta proved to be an important form of social capital for female social entrepreneurs. In MENA, wasta can override gender bias in a male-dominant society, offering women opportunities for advancement. On the other hand, a lack of wasta may deter an individual’s success in the Middle East in the same way that the absence of networking and mentoring hinders individuals in Western countries.
Lowering Barriers
Based on our findings, we offer four recommendations to assist female social entrepreneurs in Saudi Arabia, the MENA region, and other places where they face similar dynamics. First, aspiring female social entrepreneurs desperately need support networks to succeed. Female social structures, as well as the way they socialize, have a major influence on the social-capital endowments that women use to start up their businesses. Their lack of access to investors, funding bodies, business networks, and social networking events curtails their opportunities to raise capital and other resources crucial for the growth of businesses. Ecosystem builders can and should encourage the formation of female networks by linking them to established institutions and foundations, especially those that enshrine female empowerment as an important goal.
Second, social entrepreneurs and their supporters should approach family ties strategically. Family constitutes a barrier when women cannot give proper time and attention to the business and/or cannot travel because of family commitments and childcare responsibilities. A positive attitude from family and spouse, however, as well as their emotional support, seems to assist women in achieving successful performance and results.
Third, hiring more women in relevant leadership positions can help female social entrepreneurs gain access and connections to further support. Both male and female social entrepreneurs struggled with sociocultural barriers related to their gender, such as whether society thought the field was appropriate for them, their access to funding, and their ability to communicate with governmental bodies. The social entrepreneurs we studied particularly mentioned how their gender affected their ability to develop relationships with their banks, customers, and suppliers.
Women believed that their journey in the field would have been easier if there were fewer cultural barriers. For example, they complained that they were unable to attend as many networking events as men. Women found it challenging to network, since many of the higher positions in the government and in the private sector are held by men. This meant that male social entrepreneurs had a better chance to access bigger networks and develop their weak ties. If more women were in leadership positions in the foundations, nonprofits, and government offices related to social enterprises, female social entrepreneurs could have an easier time navigating them.
Fourth, wasta in social entrepreneurship offers a tool to overcome perceived challenges. Because women found it easier to receive family support for their ventures, they had easier access to strong ties and strong ties wasta. Male social entrepreneurs, on the other hand, did not have as much support from strong ties but had easier access to the weak ties, as well as both strong and weak ties wasta. Male social entrepreneurs felt comfortable utilizing their social capital, as they were able to enter all-male government buildings, and use their wasta to finish things faster, while females had to use the phone or email to reach some male government employees.
In the Arab world, tribal regional and family affiliations are important drivers for wasta. Although those investing in building social ecosystems may not be able to influence the relationship between female social entrepreneurs and their wasta, raising awareness of social entrepreneurship in the media may encourage the wasta of those women to offer mentorship and other types of support to them.
Read more stories by Ghadah W. Alharthi & Tuukka Toivonen.