The Challenges for Young Women Entrepreneurs in the Western Balkans

Introduction

Young people are the backbone of the future, with one billion young people due to reach the working age within the next decade. In this period, they will be leaving school to seek employment and set out to secure a bright future through the attainment of decent work. In recent years, this school-to-work transition has become lengthier and more complex, due to the changing nature of the labour market – with more informal, insecure, and precarious employment opportunities. For young women, this is even more complex – women are less likely to participate in the labour market due to a combination of societal and economic pressures, and when they do, they are typically engaged in more precarious employment, paid less than their male counterparts, and more likely to lose their job in an economic downturn. 

Young women’s entrepreneurship: an overview

Therefore, more and more young women have started considering entrepreneurship as an alternative career path as the opportunity for flexible working patterns and independence proves highly attractive. Entrepreneurship is the process of planning, launching, owning, and operating a small to medium-sized enterprise (SME) that offers either a process, a product, or a service. Entrepreneurial activity is defined as the capacity and ability to launch, organise, and manage a business activity with the intent of making a profit. Extensive studies have suggested that both women and young people face significant barriers to entrepreneurship, such as higher levels of distrust in knowledge and experience, issues in accessing finance, weaker professional networks, and a lack of societal support (Ahmetaj et al., 2023). For those who are both young and a woman, these barriers are intensified (Elder and Kring, 2016). This is a particular challenge in countries with complex labour market situations, such as the Western Balkan 6, where youth unemployment is high, and many young people are stuck in precarious employment or migrate in search of better opportunities. Women-led businesses in the Western Balkans are important for many reasons: they create employment opportunities for women who are typically disadvantaged in the workplace, they help increase women’s autonomy, and they are typically more socially oriented than male-led businesses, meaning they can create valuable social change (Ramadani, et al., 2015; Rosca, et al., 2020). 

The Western Balkans as a priority region

The Western Balkans are not only a beautiful group of countries with rich histories, stunning landscapes, and delicious food, but are also increasingly important from both a political and economic perspective. The Western Balkans are a group of countries targeted by the EU enlargement policy, consisting of Albania, Bosnia and Herzegovina (BiH), Kosovo, Montenegro, North Macedonia, and Serbia (Figure 1). Five out of six (Albania, BiH, Montenegro, North Macedonia, and Serbia) are officially EU candidate countries, whilst Kosovo is a potential candidate for EU accession.  A strong economy, gender equality, and engaged youth are all key prerequisites for EU accession, meaning that training and retaining young women entrepreneurs has to be an important policy priority. 

Figure 1: Western Balkan 6 Countries (Chamber Investment Forum, 2023)

National challenges for young women across the Western Balkans

Each of the six countries has a demonstrably higher youth unemployment rate than the EU-27 average, with Kosovo (48.8%) and BiH (35.3%) having the highest youth unemployment rates, and Albania (27%) and Serbia (25.5%) having the lowest (Regional Cooperation Council, 2021) (Figure 2). For young women, unemployment rates are significantly higher than for their male counterparts due to gender-based labour market discrimination, inflexible working arrangements that do not fit around caring duties, and a weak school-to-work transition framework supporting them into employment. Because of difficulties in accessing productive employment and decent work, especially in countries such as Kosovo and BiH with higher rates of youth unemployment, more and more young women in the Western Balkan 6 are starting their own businesses, and pursuing entrepreneurship as a career alternative to formal employment.

Figure 2: Youth Unemployment Rate WB6 (15-24) (Regional Cooperation Council, 2021)

In Albania, women entrepreneurs face a lack of access to financial support, whether that be through loans or family support, as well as discriminatory, stereotyped attitudes about women – that they should be at home, raising children, rather than running a business (Ahmetaj et al., 2023). In Bosnia and Herzegovina, women entrepreneurs perceive themselves as having fewer opportunities as men, and often face cultural barriers to entrepreneurship – women are not considered to be as entrepreneurial as men, and therefore are less likely to be taken seriously as entrepreneurs (Palalić et al., 2020). In Kosovo, women entrepreneurs experience a lack of legal expertise and weaker connections to consult for this knowledge, difficulty in accessing financial support (due to weak business lending facilities in the country), and a lack of training in business and managerial-related skills (Sadiku-Dushi et al., 2020). In North Macedonia, women entrepreneurs struggle to balance home and work in the same way that male counterparts do due to gender stereotypes about household labour, as well as challenges in accessing finance and training opportunities (Ramadani et al., 2020). In Montenegro, women entrepreneurs are constrained by a lack of ownership over assets meaning limited collateral for financial support, as well as unequitable burden of household responsibilities, weaker social networks, and a lack of female role models in senior managerial and political positions (Melovic & Djurisic, 2020). In Serbia, women entrepreneurs often lack the capital required to start a business, as well as the managerial knowledge and experience, whilst also having to contend with childcare and domestic responsibilities and balancing these with business activity (Antoncic et al., 2020).

Policy recommendations

Young women across the Western Balkans are interested in entrepreneurship, but do not receive enough support to actively pursue it – whether this be due to economic constraints, societal stigmas, or lack of expertise and training. To create a supportive environment for young women entrepreneurs in the Western Balkans, it is important to:

• Collate accurate data surrounding women-led businesses. According to Ramadani et al. (2013), data on women’s entrepreneurship in all of the Western Balkan region is rare or incomplete. With accurate data, government policies can provide more well-informed and targeted support, researchers can accurately monitor the environment, and key ecosystem actors (such as incubators) can identify key needs-areas. 
• Provide collateral-free financial support. Women and young people are less likely to hold assets that can be used as collateral for business financing, meaning young women are disproportionately more likely to encounter this problem. Working with financial institutions to provide collateral-free business loans on favourable terms would enable more young women to start their own businesses.
• Implement inter- and intra-industry women’s mentorship schemes. A lack of women mentors in entrepreneurship and senior managerial positions is a common issue across the Western Balkans. Therefore, implementing a women’s mentorship scheme that works across and within industries to connect more established women to younger women provides positive role models and increases professional networks. 
• Design specialist training programmes. Young women are more likely to self-report lower confidence in their expertise and knowledge in relation to entrepreneurship, so providing specialist training for them, either free or at a low-cost, that is flexible around work and family commitments, would boost young women’s confidence and result in more young women-led start-ups. 

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Sadiku-Dushi, N., Ramadani, V. & Dianne H. B. Welsh, 2020. Women’s Entrepreneurship in Kosovo. In: R. Palalić, L. Dana & E. Knezović, eds. Women’s Entrepreneurship in Former Yugoslavia: Historical Framework, Ecosystem, and Future Perspectives for the Region. Switzerland: Springer Publishing, pp. 61-82.

The author (Geena Whiteman) conducted this research within the framework of Kosovo Research and Analysis Fellowship, supported by the Kosovo Foundation for Open Society.