Small Business Ownership and Gender Differences in the Wake of Public Sector Transformation -The Case of the Veterinarians By Jenny Appelkvist1
There is hope that the transformation of the public sector will lead to an increase in the number of female entrepreneurs. But the question is if there is a level playing field for men and women? In this article a gender perspective is applied to a mapping of women’s business ownership in the veterinary sector. The importance of intertwined processes of public sector transformation, the feminization of a profession and an expanding industry are highlighted. More specifically the article illustrates that even though there has been a shift in gender balance and women now dominate as veterinary-medicine students there is differences between male and female owned businesses in size of business both in terms of number of employees, profitability, turnover and assets.
Introduction This paper explores women’s business ownership in an expanding sector affected by public sector transformation alongside the feminization of a profession; the veterinary sector. Since 1997 The European Union (EU) and the European Commission has worked toward stimulating entrepreneurship. In EU 23 million small and medium-sized enterprises (SMEs) represent 99 % of businesses. Since these enterprises are considered to be key drivers for economic growth, innovation, employment and social integration, EU has made an effort to support them through different policy programs. The European Commission's activities consist, among other things, in helping member states and the regions to develop policies aimed at promoting entrepreneurship, improving the situation of SMEs throughout their life
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Jenny Appelkvist is a PhD Student in Business Administration at Linköping University. Adress correspondence to: Jenny Appelkvist, Department of Management and Engineering, SE-581 83 Linköping, Sweden. E-mail:
[email protected] 1
cycle, and helping them to access new markets. Special attention is being given to specific forms of entrepreneurship; for instance 2 million € are invested in societal entrepreneurs and 3 million € in an exchange program for young entrepreneurs. Women entrepreneurs are also of specific interest to the EU since only 30 percent of all entrepreneurs in Europe are women. This is a fact that is viewed as troublesome and limiting for economic growth (EU 2011). Some countries direct their hope towards the transformation of the public sector as a reservoir of potential female entrepreneurs. The move in several OECD countries in the 1980s towards a transformation of public sector is often referred to as New Public Management (NPM). Central to the transformation was a focus on slowing down and reversing government growth. Privatization of parts of the public sector was one remedy used (Hood, 1991). Since women in many welfare states work within areas such as health- and elderly care (areas which are traditionally labeled as female) there is hope that an effect of the privatization will be more female entrepreneurs. This since it is established that both women and men tend to start businesses in areas they are familiar with (Sundin & Holmquist, 1989). The Swedish context is well suited for studying the transformation of the public sector since it has a Scandinavian welfare model and thereby a relatively large public sector (EspingAndersen, 1990). Research on the public sector transformation in combination with entrepreneurship has so far focused on parts of the public sector as elderly care (Sundin & Tillmar, 2010), cleaning (Sundin & Rapp, 2006) and education (Lindgren and Packendorff, 2008). Early results indicate that the transformation does not benefit women’s entrepreneurship to the extent expected. Elderly care, cleaning and education represents parts of the Swedish public sector that traditionally has been dominated by women. The veterinary sector – also part of the Swedish public sector (and affected by the transformation) has however in the last 50 years gone through a shift in gender balance from male to female. Originally, men completely dominated the profession. Nowadays, the trend in Sweden, as the
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rest of the western societies, is that women dominate as veterinary-medicine students (Maines, 2007; Östensson, 2010). In the light of this I find it interesting to study if this predominance of women within the veterinary sector also can be translate to a predominance of women as business owners within the sector? Do female veterinarians start their own businesses to the same extent as the male? A suitable case for this investigation, and thus the focus of this study is the county of Östergötland. This specific county not only provides a diverse (both pets and farm animals) and average market for veterinarians but is also geographically accessible. The aim of this paper is to describe women’s business ownership in a transforming sector both regarding the change from public to private and male to female dominated. I also intend to apply a gender perspective on this description. For reasons described above this will be done within the veterinary sector in the county of Östergötland through a quantitative mapping. More specifically the question to be explored is: What is the distribution of men and women in connection to: (a) Size of business (b) Profitability, (c) Market niche and (d) Company form? The description at hand is the starting point of my thesis in which I will study the prerequisites of female business owners within the veterinary sector in the county of Östergötland. In political rhetoric, entrepreneur and business owner are often used as interchangeable concepts. Even established researchers tend to stray between the two concepts and use them as synonyms (Sundin, 2002). However, all entrepreneurs are not business owners and all business owners are not entrepreneurs (Sundin, 2003). In this paper I will focus on business owners even though I will use theories on both business ownership as well as entrepreneurship. This choice, to use theory from both fields is grounded in the fact that the confusion of concepts has resulted in partly overlapping research.
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In the next section, I will describe the methodology used in the paper. After that, I give a background to and describe the Swedish veterinary sector on the basis of some important aspects as history, organization and economic development. My framework of analysis follows upon this. I will then present the results of the mapping and after that end the paper with a discussion of results and concluding remarks where I also suggest some interesting areas of further research.
Methodology This article builds on a quantitative mapping of the veterinary sector in the county of Östergötland, Sweden. The county of Östergötland offers a diverse yet average market for veterinarians. Östergötland is a county dominated neither by the public sector district veterinarians (as are in many northern counties of Sweden) nor by private veterinarians (as are in many southern counties of Sweden). With regard to the density of the animal population, the county is of the average (compared to other Swedish counties) (SOU 2007:24). The data used for this paper is primarily of a secondary nature. Databases have been used, together with drafts of statistics from Statistics Sweden (SCB). Several official websites have been used to collect data from official documents: The Swedish Board of Agriculture, the Swedish Government and The County Administration of Östergötland among others. Another important source of data has been the Swedish Government Official Report (2007:24); Veterinary Fieldwork in New Forms. The Swedish business database Affärsdata has been combined with the database Allabolag.se for a mapping of veterinary business owners in Östergötland. The search for businesses has covered Limited companies, Partnerships and Sole proprietorships. One limited company has been excluded from the mapping since there were no data available2. 2
This is a nationwide business which do not account separately for their local branches. Focus has thus been on locally and regionally based businesses.
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The search procedure within both databases is based on industry code 75000 (veterinary activity) in combination with a limitation to the county of Östergötland. It has been necessary to combine databases, as Affärsdata does not provide information about sole proprietorships. This information is provided by Allabolag.se. Apart from these databases, the Internet has been used to search for official websites linked to the businesses identified. When sites were found, they were reviewed and archived. This review of webpages has sometimes been indispensable as a way of determining what kind of animals the businesses focus on treating. Animals (when needed) are categorized as either Farm animals, Horses or Pets in this article; this is in line with the categories used by the Swedish Board of Agriculture. Businesses found have been divided into categories according to if the owner3 is male or female. These categories are determined by information on governing/ownership of the businesses. Limited companies are determined from shareholder statements and/or board members (not including alternates) and Partnerships are determined by board members. Sole proprietorships are determined by the specified owners of the business. In cases where both a man and a woman can be identified as governing /owner, the businesses are labeled as “Joint ownership”. This division of businesses into categories of owner’s sex is not possible only from studying data of a secondary nature. Brief telephone interviews with some of the business owners (when data has been inconsistent) shows that the facts from, for instance, affärsdata have a tendency to be misguiding. Affärsdata may show that a partnership is owned by both a man and a women but closer studies may reveal that the man is a veterinarian and the woman simply helps with the administrative parts of the business. Since I only count business owners with a veterinary license this changes the categorization of the business from a joint
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Only those that have a veterinary license are counted
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ownership to a male ownership. This is an important aspect to be aware of when using secondary data and especially databases.
Description of Context: The Swedish veterinary Sector Below the Swedish veterinary sector will be described briefly. Starting with what differentiates the veterinary sector from the animal health care sector the description then move from past to present day. The public and private part of the sector and its participants are described as well as current trends within the sector.
Definition of the veterinary sector In a broad sense, the animal health care sector includes businesses that offer health care to animals along with pharmaceuticals, medical equipment and other supplies necessary for animal health, animal disease prevention and advice on animal health issues. In addition to veterinarians, the animal health care sector employs veterinary nurses, veterinary assistants, technical assistants and farriers among others (SOU, 2007:24). In this paper, the veterinary sector is limited to that part of the animal health care sector that requires licensed veterinary skills.
History Sweden’s first veterinary institution was launched in the municipality of Skara in 1775. During the 1800s, the veterinary profession was established in Sweden and the veterinarians became tied closer and closer to the state. While the first half of the 20th century, was marked by a consolidation of the veterinary sector, the second half was marked by privatization and reorganization (SOU, 2007:24).
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The first female was admitted to the educational program of veterinary medicine in the municipality of Skara in 1914 (Hallgren, 1962). For many years, this woman was the only representative of her gender in the veterinary profession (Hellberg, 1978). Today, 80 % of those admitted to the educational program for veterinary medicine are women (SCB Statistical yearbook, 2010).
Public and Private Participants The public participants in the veterinary sector in Sweden are the Swedish Board of Agriculture, the National Food Administration, the County Administrative Board, the Disciplinary Board of Animal Health Care and the National Veterinary Institute. The Swedish University of Agricultural Sciences is also part of the public sector (SOU, 2007:24). The private part of the veterinary sector consists of businesses in the form of limited companies, partnerships and sole proprietorships. Besides a national company specializing in horse care (with 24 branches around the country), the private part of the veterinary sector consists predominantly of regionally based companies. To date, franchise concepts do not exist within the veterinary sector (Affärsdata).
A Closer Look at the Public Veterinary Sector The Swedish Board of Agriculture is a central government agency and the Swedish government’s expert authority in agricultural and food policies. They also have central supervision of the veterinary profession. In addition, the organization is responsible for disease control within farm animals and observing that legislation on contagious animal diseases is followed. The Swedish Board of Agriculture also is responsible for issuing veterinary licenses (Swedish Board of Agriculture, 2010).
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The Swedish Board of Agriculture is responsible for the district veterinarians, whose organization operates as a division within the agency. Fees and government grants mainly finance the district veterinarians operations. One of the district veterinarians’ responsibilities is to maintain a state of readiness with regard to infectious disease control within the country. They also are responsible of preparedness for acute illness in animals – around the clock, all the year round. Besides this, the district veterinarians are responsible for cost-effective animal health care for farm animals, horses and pets (SOU, 2007:24). The change to a predominance of women within the veterinary profession is also noticeable among the district veterinarians; the proportion of women employed as veterinarians in 2009 was 65 % (Swedish Board of Agriculture, 2009). In comparison in the private veterinary sector, the distribution of private practicing men and women in 2004 was 44 % men and 56 % women (SCB Statistical yearbook, 2005).
Trends The veterinary sector in Sweden has since the 1980’s expanded rapidly, both in numbers of businesses and also in terms of their turnover. Statistics show that while the number of public veterinarians in Sweden remains unchanged, the number of private veterinarians more than tripled 1983 – 2003 (SCB Statistical yearbook, 1975 - 2005). Statistics also show that there was a sharp increase in turnover for the private veterinary clinics in the years 1997 – 2007, from a turnover in 1997 of 687 million SEK to approximately 2.5 billion SEK in 2007. (SOU, 2007:24). One explanation for the expansion of the veterinary sector in Sweden may be found in the change in the ways animals are kept. Almost all kinds of farm animals have decreased significantly in number during the last 25 years. It is predicted that this trend will continue. The number of pets in Sweden, on the other hand, has increased. This increase in the number
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of pets has an impact on the demand for veterinary care. This can be explained by the new categories of pet owners, which have no previous experience of owning animals. The trend in Sweden and other western countries is that pets are considered more to be equal members of the family than before, while knowledge about animals has decreased. This means that pet owners are increasingly likely to seek care for their sick animals (SOU 2007:24).
Theoretical point of departure Below, the articles frame of analyses will be structured by first giving the background to the gender perspective and some relevant terms. After that some relevant research results on entrepreneurship from a gendered perspective are offered.
A Gender Perspective Looking through the lens of a gender perspective the researcher perceives sex as being a social construction. Gender in this sense refers to what is regarded as masculine or feminine and detaches this from biological sex. The way that gender manifests itself on a societal level can be understood as the gender system of a society (Hirdman, 1988; Sundin, 1998). This manifestation is considered to be one of three power systems in the Swedish society (alongside with the political and economic system) (Sundin, 1997). The gender system is based on two logics; segregation and hierarchisation. These two logics are interwoven and affect one another. The logic of segregation is based on the assumption that men and women should be kept separate from each other and the logic of hierarchy that the man is the norm. (Hirdman, 1988). The segregation of gender can be vertical as well as horizontal. Men and women can be segregated vertically for example with a predomination of men on administrative posts. Horizontally, it is a case of clustering in particular gendered specilities for example women as pediatricians and men as surgeons (Snyder & Green, 2008). The
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gender system permeates all of society including the labor market and both workplaces and work assignments are marked by the gender system (Abrahamson, 2006). This is consistent with the view that organizations construct gender and gender construct organizations (Aaltio, Kyrö & Sundin, 2008; Acker, 1990; Connell, 2006).
A Gender Perspective on Entrepreneurship Women, all round the world, are less inclined to start businesses of their own than their male counterparts. This fact is true also in Sweden (Holmquist, 2008). In media it is common to depict a female entrepreneur as a woman and the male entrepreneur as simply an entrepreneur (Holmquist, 2008). Research shows that the entrepreneur label in itself can be considered to be male (Holmquist & Sundin, 2002) and the concept “entrepreneur” to have masculine connotations (Ahl, 2006). Research shows that women are constituted as “the other” (Ahl, 2002) and that their entrepreneurial activities can be defined as invisible, adaptable and characterized by multiplicity (Sundin & Holmquist, 1989). Female and male entrepreneurs show the same segregation as the workforce in general. Female entrepreneurs keep to traditionally female occupations and Male entrepreneurs to traditionally male occupations. What is considered or labeled as a male or female occupation however varies from time and place, but the gender segregation and gender labels as such persists (Aaltio, Kyrö & Sundin, 2008). A study by Snyder and Green (2008: 296) on the gender segregation within the female dominated occupation Nursing suggest: “that men pursue particular male-clustered specializations, not as a function off financial self-interest, but as a consequence of gender identity and active efforts to locate a masculine position within what is otherwise construed to be a women’s profession” The transformation of the public sector and the prerequisites of male and female entrepreneurship has been studied in areas as elderly care (Sundin & Tillmar, 2010), cleaning
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(Sundin & Rapp, 2006) and education (Lindgren & Packendorff, 2008). The research done on elderly care and cleaning point to that the privatization does not always improve prerequisites for entrepreneurship (at least not female entrepreneurship). The privatized sectors studied in these cases show indications of an increased masculinization or even of being masculinized. A study of women in independent schools shows that not only entrepreneurship but also profession and gender influence identity construction (Lindgren, 2000; Lindgren & Packendorff, 2008). However, being an entrepreneur and being a woman is not naturally compatible argue the authors, since being an entrepreneur is often described in terms of dedication to work and a need for achievement. This is something that collides with results from earlier studies showing that women entrepreneurship in Sweden is characterized by an adjustment to family matters (Holmquist & Sundin, 1989). Sundin and Holmquist (1989) have shown in their research (in the Swedish context) that women’s businesses are characterized by low turnover and few employees. Women are also more inclined than men to work in their businesses part time. This may be an effect of the family situation where women tend to have an overall responsibility for children and home. Even though the businesses have a tendency towards allow turnover women are in general happy with the generated turnover of their business. Men on the other hand often have the mindset of growth. The higher educated women entrepreneurs are more dissatisfied with a low turnover than female business owners in general. Like the male entrepreneur they are used to a high salary and have greater expectations. A majority of women choose to run their businesses in the form of sole proprietorships. Women entrepreneurs with a higher education however gravitate more toward the form of limited company. This is, more often than women, men’s favorite company form (Sundin & Holmquist, 1989).
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Result4 The result is structure into four subcategories: (a) size of business, (b) profitability, (c) market niche and (d) Company form. The two first categories focuses on the limited companies mapped. The two latter categories include all private businesses within the veterinary sector in Östergötland. Searches in databases shows that there are 27 different registered veterinary businesses in the county of Östergötland. These consist of 17 limited companies, four partnerships and 6 sole proprietorships.
(a) Size of business Market shares: Information on turnover and assets has been obtained for 16 out of the 17 limited companies5. The total turnover of the 16 limited companies is 86 537 000 SEK. As you can see in figure one, three percent of the total turnover emanate from businesses with a female ownership. The businesses with a joint ownership stand for 16 percent while those with male ownership dominate with 81 percent of the total turnover. The total assets (figure two) are distributed in a similar manner in which the businesses owned by women again account for 3 percent. Businesses with joint ownership have 18 percent of the assets and the businesses with male ownership now account for 79 percent of the assets. The total assets of the 16 limited companies mapped are 35 676 000 SEK.
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The following result consists of data from 2009 5 The missing information is from a business that is recently started and has not yet turned in their first annual report. The business in question is owned by a man and can be found in a medium sized locality.
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Figure 1: Turnover in Limited Companies Divided by Ownership
16%
Male ownership
3%
Figure 2: Assets in Limited Companies Divided by Ownership
18%
Male ownership
3%
Female ownership 81%
Female ownership
Joint ownership
79%
Joint ownership
Data on turnover is also presented in table 1: showing that the male ownerships turnover emanates from seven different limited companies. The female ownerships on the other hand share their 3 percent of the total turnover between four limited companies
Table 1: Limited Companies Turnover Related to Type of Ownership Turnover (thousand SEK) 0-499 500-999 1000-4999 5000-99 999
Male ownership
Female ownership
Joint ownership
Sum
2 5 7
2 1 1 4
5 5
2 1 8 5 16
Table two shows that all the female ownerships can be found in the lower interval of assets (0-499 thousand SEK). This is in contrast to table one where the female ownerships are spread over three intervals of turnover. The male ownerships can be found in the two higher intervals both in terms of turnover and assets. 13
Table 2: Limited Companies Assets Related to Type of Ownership Assets (thousand SEK) 0-499 500-999 1000-4999 5000-99 999
Male ownership
Female ownership
Joint ownership
Sum
5 2 7
4 4
1 4 5
4 1 9 2 16
Number of employees: Another factor that indicates the size of the limited companies is the number of employees within the businesses. Figure three below show the number and sex of employees in relation to male, female or joint ownership. Businesses with a male ownership is dominating in number of employees compared both to the female and jointly owned businesses. Rather strikingly the employees are dominantly women regardless of the owner’s sex. The largest limited company in the bunch is male owned and have 25 women and 1 man employed. This distribution between male and female employees is consistent for all of the male owned companies with a more than five employees. The female owned businesses have only one to two employees, all of which are women.
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Figure 3: Number of Employees (Divided Into Men and Women) in Relation to Male, Female or Joint Ownership. 30
Number of employees
25
20 Women
15
Men
10
5
0
Male ownership
Female ownership
Joint ownership
(b) Profitability Figure four below shows that none of the female owned businesses makes a profit. Rather, they are in varying degree making a loss. The male owned businesses on the other hand vary in size of profit between the lowest of 166 000 SEK to the highest of 1 030 000 SEK. The businesses with a joint ownership are represented on both ends of the scale with three that makes a profit and one that make a loss.
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Figure 4: Profitability in Limited Companies Divided by Type of Ownership
1200 1030 1000
Thousands SEK
800 559
600
463
585 Male ownership
437
400 200
Female ownership
346
Joint ownership
246 166
168 17
20
0 -31 -3 -19 -200
-4 -131
(c) Market Niche Locality: The 27 businesses are spread over the county of Östergötland in 14 different localities. The businesses are categorized with regard to the number of residents in the locality were the businesses are found in table three. Seven out of the men’s ten businesses can be found in the two largest localities in the county. In the small localities there is only one veterinary business per locality. None of the businesses owned by men can be found in localities with less than 10 000 residents. Both female and jointly owned businesses can be found in all categories of localities.
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Table 3: Distribution of Businesses with Regard to Number of Residents in Localities Number residents localities < 9999 10 000 – 49 999 50 000 >
of Male ownership in 3 7 10
Female ownership
Joint ownership
2 3 3 8
2 3 4 9
Type of animals: There are 3 categories of focus for treating animals within the veterinary sector in Sweden. These consist of pets, horses and farm animals. Figures five, six and seven below shows the distribution of ownership related to these three categories. Since a business can occur in several categories (when treating both pets and farm animals for example) the sum of businesses in each category are misguiding and therefore not included. Figure five shows that the businesses with a male ownership focuses on treating pets while there is in fact only one business which also treat horses and farm animals. Those businesses with a joint ownership, which are depicted in figure six, also focus on treating pets but several also focuses on treating horses. None of the joint ownerships treat farm animals within their practice. The majority of female business owners, as shown by figure seven, also focus on treating pets but there are also a few treating horses. One female business owner treats farm animals within her practice.
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Figure 5: Type of Animals Treated; Male Ownership
Figure 6: Type of Animals Treated; Joint Ownership
Figure 7: Type of Animals Treated; Female Ownership
Pets Horses Farm animals
(d) Company Form As shown above ten of the businesses are owned by men, eight by women and nine by both men and women in a joint ownership. The male ownerships are predominantly in the form of limited companies (8 of 10). The female ownerships are evenly distributed between the form of limited company (4) and sole proprietorship (4). Five out of nine joint ownerships are in the form of limited company and four in the form of partnership.
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Table 4: Company form Divided by Type of Ownership Company form
Male ownership
Female ownership
Joint ownership
Sum
Limited company
8
4
5
17
Partnership
-
-
4
4
Sole proprietorship
2
4
-
6
10
8
9
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Conclusion and further research This article examines women’s business ownership in a transforming sector both regarding the change from public to private and male to female dominated. This is the case for the Swedish veterinary sector. A quantitative study in the county of Östergötland has been conducted and the focus has been on the distribution of male and female business owners in the veterinary sector in connection to: (a) Size of business (b) Profitability, (c) Market niche and (d) Company form. The veterinary profession has gone from being dominated by men to being dominated by women. A majority in veterinary-medicine education nowadays are women. There however seem to be a delay between education (80 percent women), the public district veterinarians (65 percent women) and private practicing veterinarians (44 %). Results show that there is an even distribution of the number of businesses within the sector in Östergötland. Out of a total of 27 businesses ten are owned by men, 8 by women and 9 are owned jointly. A closer look however reveals that the men’s businesses stand for 81 respective 79 percent of the turnover and assets of all the businesses. Women’s businesses
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stand for merely 3 percent of both turnover and assets. This is in line with previous research that shows that women’s businesses are characterized by low turnover (Holmquist & Sundin, 1989). There is also a significant gap in profit between the male and female owned companies. All out of four limited companies owned by women make a loss, while all the men’s seven limited companies make a profit in varying degree. What circumstances makes the women continue with businesses were they make a loss? The transformation of the public sector in Sweden has, as I earlier stated affected the veterinary sector as well. The previously so safe employment in the public atmosphere of district veterinarians perhaps no longer can support all the students entering the veterinarian labor market. Thus limiting the choices to being privately employed or start your own business. When adding the dimension of employees and dividing them by sex we can see that several of the male owned businesses employ a large proportion of women. The women, when having employees at all, tend to employ other women. It is of course not surprising that the women’s businesses have fewer employees than the men since turnover and profit are so low compared to the men’s. But the question is: do they want to grow? The sector is transforming in terms of expansion as we have seen. Not only the number of established businesses is increasing but also their turnover and, perhaps even more importantly, the number of pets are increasing as well. Pets are the focus of treatment in most of the businesses whether male, female or jointly owned. Where the businesses are established is however unevenly spread regarding size of locality. A majority of the men’s businesses can be found in the county’s two largest localities. The women’s businesses are evenly spread over small, medium and large localities. The joint ownerships are distributed in a similar fashion as the women’s. Is there a better market for veterinarian in the larger cities? Then why can so many female business ownerships be found in small and medium cities in comparison to the men’s?
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The results also show that male ownerships are predominantly in the form of limited company while the female ownerships are evenly distributed between the form of limited company and sole proprietorship. This distribution is common even though women entrepreneurs with higher education tend to gravitate even more towards the form of limited company (Sundin & Holmquist, 1989). As I have already stated there seem to be a delay in the distribution of men and women between education, public practicing and private practicing. As this case shows there appears to be even one more step and delay between men and women in the veterinary sector in Sweden. This is with regard to size of business both in the sense of employees and economical terms as turnover, assets and profit. There are in this phase more questions than answers but the intertwined processes of public sector transformation, the feminization of a profession and an expanding industry, in combination with the power of the gender system, look as if they are keys when it comes to solve the puzzle.
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