Where are the women in trade and industry?

What are our initial findings?

Our starting point is enterprises operating in Norway at the beginning of 2004, the so called “stock”, but also enterprises established in 2003, known as new business starts.

There are a number of ways to organise an enterprise, and this article will use some of these as its basis. In order to examine ownership in Norwegian trade and industry, we will look at the enterprises owned by physical persons as opposed to corporate bodies. These are organised as sole proprietorships (ENK), general partnerships (ANS) and joint liability companies (DA).

In sole proprietorships, the owner has total personal liability. In general partnerships, the partners have unlimited and complete personal liability for the company’s collective obligations. In joint liability companies, the participants have joint liability for the company’s obligations.

These forms of business organisation account for almost three quarters of all new business starts, and half of the total businesses. The reason for starting by examining these forms of business organisation is that, via the role information in the Central Register of Legal Entities, we have access to data on these. When the newly established share register is of such a quality that we can use it for statistics, we will also be able to look at the founders and owners of limited companies (AS). Consequently, we will be able to examine around 98 per cent of all new business starts and 94 per cent of the entire stock.

Gender representation in public limited companies is also covered in this article. A limited company becomes a public limited company if it calls itself a public limited company in its articles of association, and is registered as such in the Register of Business Enterprises. A public limited company (ASA) will normally have more shareholders than a limited company.

This article also examines gender differences in trade and industry in relation to age, education, industry type and geographical dispersion. The new official statistics also consider immigrants in trade and industry, focusing on roles and ownership, and the primary industries will be included during 2005. The primary industries are only included in this article with regard to public limited companies.

One out of three sole proprietorships are founded by women

In 2003, approximately 39 000 new enterprises were established, of which almost 27 000 were sole proprietorships, almost 900 were general partnerships and almost 1 500 were joint liability companies. One out of three new sole proprietorships in 2003 were set up by women. This form of business organisation has the largest proportion of women.

Sole proprietorships are the most common form of business organisation among new business starts. The enterprise is run by one person, who has complete financial liability for the obligations of the business. There is no equity requirement when setting up a sole proprietorship.

For general partnerships established in 2003, 22 per cent of the partners were women, and for joint liability companies set up in the same year the corresponding figure was 21 per cent.

With regard to sole proprietorships, new business starts have a larger proportion of women than in the stock of enterprises. Only a quarter of the almost 158 000 sole proprietorships in the stock in Norway are owned by women, while every third new business in 2003 was set up by a woman.

This may mean that more men are successful and that more women than men give up during the start-up process. It could also mean that the women are catching up quickly. This is something we will examine next year after our next publication on women in trade and industry. One of the aspects we examine here is the survival and growth of the enterprises that are established.

Traditional choices in new business start-ups

When women set-up in business, they tend to choose fairly traditional industries within all three forms of enterprises covered in this article. Women have the highest representation within health and social services. The industry covering other social and personal services has the second highest proportion of female participants. The other industries are mainly dominated by men, and in the building and construction trade we find only a small number of women. This trend continues within the new business starts. With regard to sole proprietorships, women only make up 3 per cent of new business starts within the building and construction industry, while two out of three new sole proprietorships within health and social services are set up by women.

With regard to setting up joint liability companies, women are in the majority within teaching, with 55 per cent.

Women are not in the majority in any of the industries for new general partnership start-ups. The highest proportion of women in this form of business organisation is within health and social services, where they make up 43 per cent.

Figure 1 shows the proportion of women in the stock and the proportion of women among new sole proprietorship start-ups, by industry. We can see that most new business starts by women in 2003 were within health and social services and teaching. There is also a seemingly high proportion of new business starts by women within mining and extraction, as well as manufacturing. The numbers relating to these industries are relatively small, so a small number of new business starts results in high percentages.

Female founders have highest education

Female founders of sole proprietorships have a higher level of education than male founders of such businesses. A total of 45 per cent of the women that established new sole proprietorships in 2003 have graduated from university or a university college, while barely one out of three male founders of sole proprietorships in 2003 were educated at university or university college. The highest educational attainment of more than half of the men who set up sole proprietorships in 2003 was from upper secondary school.

Two out of three founders aged 25-44

Two out of three founders of new businesses in 2003 were aged 25-44, for both men and women. Using a 10-year age distribution, we can see that around 39 per cent of women and men who set up sole proprietorships were aged 25-34. Thirty per cent of the women were aged 35-44, compared to 27 per cent of the men. Therefore, the assumption that women are older than men when they set up in business because they wait until their children are a certain age, does not seem to hold water.

Relatively small geographic differences

Women represent 32 per cent of the new sole proprietorship start-ups in Norway. With regard to the county distributions, Akershus and Nord-Trøndelag are 3 percentage points above the national average, while Oslo is 2 percentage points above the national average. Hedmark, Vestfold and Sør-Trøndelag are 1 percentage point above the national average. Even though the geographic variations are small, it seems that there are more females setting up sole proprietorships in the Oslo area and in Trøndelag. The lowest proportions of women setting up sole proprietorships is in Oppland, Telemark, Aust-Agder, Møre and Romsdal, Nordland and Finnmark, which are 4 percentage points below the national average, with Buskerud and Vest-Agder following hot on their heels.

One out of ten board members are women

In 2003, the Norwegian government proposed a new law to increase the gender representation in the boards of all state-owned enterprises and privately-owned public limited companies. The bill requires both sexes to be represented with at least 40 per cent. In the event that this is achieved voluntarily in 2005, the law will not be brought into force.

One crucial reason for the bill is the importance of getting more women on the boards in order to achieve a greater recruitment basis, which in turn will lead to increased diversity. The current situation is such that society does not use the resource that women’s expertise represents.

At the start of 2004, Norway had around 2 800 board members, distributed among 552 public limited companies. Only 254 of the board members are women, i.e. less than one out of ten, and less than 3 per cent are chairwomen (14 out of 546). Hordaland has one chairwoman, and the remainder are in Akershus and Oslo. Chairmen on the other hand are found throughout Norway.

In 2003, 14 new public limited companies were established. Less then 10 per cent of the board members (6 out of 65) are women, and only one out of the 14 chairpersons is a woman.

Female board members have very high levels of education

Board members of public limited companies have a much higher education than the majority of Norwegians. The proportion of women and men overall with a high level of education is equal. However, when we take a closer look the picture starts to change. It is common to divide education into short higher education (up to four years of study at university college or university) and long higher education (more than four years of study at university college or university). In the population as a whole, men are still in the majority with regard to long higher education. However, the picture is somewhat different in the boardroom, where more women than men have such high levels of education.

Among the population of Norway, approximately 3 per cent of women and almost 7 per cent of men are educated to university or university college level of more than four years. A total of 27 per cent of the female board members in public limited companies have the equivalent education, and 26 per cent of the male board members. Women on the boards of public limited companies therefore differ from women in the population in general to an even greater extent than the men on the boards of these companies differ from the average for men in the total population¹.

Perhaps the idea that a woman has to be twice as clever as a man to be treated equally has a hint of truth to it? The data also revealed that female founders are slightly better educated than their male counterparts.

The chairmen are middle-aged men

The majority of board members in public limited companies are middle-aged men in the 45-66 age group. A total of 65 per cent of the male board members and 72 per cent of the chairmen can be found in this age group. Fifty-four per cent of the female board members and 64 per cent of the chairwomen are in this age group, which is only 8 women in total.

Roughly the same number of men and women take higher education nowadays, but the majority of the board chairpersons are in the age group where there are far less women than men with the relevant experience and education.

The way forward

In terms of the political goal of at least 40 per cent of each sex in board positions, Norway is not fairing well. In fact only 6 per cent of enterprises fulfil the requirement of 40 per cent female representation. The figure is not much better when we only consider the public limited companies that were founded in 2003, where only two out of the 14 (14 per cent) fulfil the 40 per cent requirement. Whether we can conclude from this that we are heading in the right direction remains to be seen.

¹ The official education statistics may not include data on persons who completed their education outside Norway. It is important to be aware that we lack education data on many more male board members than female.