This interview is part of the #WomenAreNATO series which is focused on promoting equal gender voice in security related issues.
Dr. Sharon T. Freeman is the CEO and founder of Gems of Wisdom, a consulting firm with a large international portfolio. She spoke to Galan Dall, Managing Editor of V/I, on her recent visit to Warsaw about what governments can do to make their markets attractive to foreign investors, and how to specifically encourage more women to enter the field of business.
Galan Dall: You started your global consulting business in Hong Kong in 1985 and have travelled extensively, working in various countries around the world. What are some governmental policies that you think help SMEs succeed when entering a foreign market?
Sharon Freeman: I think important ones include having legislation that really mandates focus on aiding and protecting, counselling and supporting small businesses and that means start-ups as well as SMEs.
By corollary, in the United States, we have the US Small Business Administration, and its role is really vast in those four pillars I just mentioned. This puts the whole system of governance on notice; for instance, in regulatory area, in terms of procurements etc.; now the interests of small businesses are being taken into consideration.
The other one is helping the small firms get preferential access to government procurements; this is especially important in our case because the government procures such a high value of goods and services.
It has been very impactful to set aside 23% of the value of that procurement for small minority business, and then having business-friendly laws, which I think, if you look at this from the perspective of high-tech companies – that have the potential for high-growth – they need good contract law and enforcement as well as a well-functioning judicial and legal system.
All of these components are necessary: they need intellectual property protection, access to infrastructure, and for small firms, obviously, work space, etc.
So, I would say the legal framework, access to procurement, and the protection of the government at every level.
And red flags? If you were considering a new endeavor, are there any issues with legislation or any other matters that may turn you off from entering a market?
I think that Poland is a wonderful place to invest and to have partnerships with other firms.
But if a firm was pitching to me in America to join them in an endeavor here, in Poland, I would ask them to show me some examples of where that worked out. Particularly, I would want to know about other types of US firms that invested in something or someone here – and I do not mean the huge US mega conglomerates, which I do know we have here – but on a smaller scale, give me examples of a successful entering and exiting from Poland.
It is really the latter where the proof is in the pudding. If I am investing in something, I only do that to make money. And if I am making money, what can I do with that money – can I take it out of the country? What if we have a dispute between us as partners, if we are co-investing, what are my protections as a foreign company working here in partnership with a local company? Knowing these answers is crucial.
One of our focuses at V/I is promoting women; especially, in the wide arena of security. Are there any countries which are exemplars for helping women-entrepreneurs to enter the market that you can highlight or that have specifically policies which you think are positive?
I think the answer to that depends on what you think the problems are to solve, so what are the unique problems that women have?
Not so much in the US, but in other countries the question is for the banking system. Women do not necessarily own the necessary collateral, and if banks require this and it is not in their name, then having lower interest rates for bank lending is not really the solution because the problem is that they can’t get the loan without assets.
I think the best practice, which is actually from the US, is that the government guarantees 90% of the loan for small businesses, so this acts in a way to de-risk the majority value of the loan.
That really is the best practice as it actually addresses a problem which is facing almost the entire world. That problem exists everywhere; in countries of the Middle East where the religious law may hinder women acquiring assets.
Another important thing is helping women to get access to the procurements from the government. I never hear that being mentioned! Ever! Anywhere in the world!
In Poland, the government is quite supportive when it comes to maternity care. There is legislation that protects women from losing their jobs within a certain time after delivering their child, a prolonged maternity leave, etc.
How important do you think social policies are from the government for supporting business communities; meaning specifically, businesswomen and women-entrepreneurs?
This is a tricky question. Some labour laws, while being well-intentioned, could have an unfortunate negative impact of making it too expensive to actually hire women if the period of maternity leave is too long which I have seen places where it can be a year. And then you also have to hire another person and that is twice the cost.
So, well-intentioned policies if not implemented wisely could have the reverse impact.
Broadly speaking, digitalisation, automation, AI – these are all technologies that will radically change the global economy in the coming five, ten, fifteen years; everywhere in the world but really specifically in Central Europe because Central Europe is still focusing on a cheap labour model for their economies. How can we encourage SMEs to embrace these changes or adapt their approach ?
Actually, I think it is the SMEs which are agile enough to have really developed new technologies that can take advantage of these new opportunities.
When you look at which kinds of companies have made a huge impact in a short period of time in our country or anywhere else, you will see that many of them started really small.
This is why all over the world supporting start-ups is now widely understood as being the way forward to try to support initiatives that can transform economies.
The question is – “how to support them?” And then the answer to that as well depends on the context – “What do they need to help with?”
Here, in Central Europe, financing would be a problem, particularly when we are talking about women. Though I think there are educational issues as well, for instance, getting women to focus on what is called STEM (Science, Technology, Engineering and Maths), and those educational paths.
That is the case in the US where we see many women working in businesses, a lot of them are in management and consulting, health and education. They are not based on the STEM-disciplines.
As many of the success stories are often drawing on that skills-set, women – who, as I said, are less involved in these areas – are not even at the table.
But this will require a larger cultural discussion which is being promoted by government initiatives to get more women interested in STEM.
Are there any major trends, disruptive or otherwise, that you see coming in the near future that may particularly benefit female entrepreneurs?
In a sense – yes. Women are having a big impact by using their sensibilities, their experiences to lead bigger companies they may be employed by or are the owners, to lead them with an additional motive; on a path of doing things that have a positive social impact.
As entrepreneurs within corporations, they lead those corporations to also have a set of concerns that have a positive benefit for the society as a whole. I think this is where women are making a huge difference.
Interestingly, when you talk about the professional market in Warsaw, there are almost 3 to 1 more women than men who are skilled and at the professional age. But when you get to the highest echelons of companies, these are still dominated by men…
Same as in the US. And I think because the role of women historically and still now is to take care of children.
There is only a certain amount of time, and so they start to make the choices that have been focused on being in the home in addition to their professional life.
We really need to have a better understanding of what it takes to succeed at the higher echelons. And, to make a long story short, it’s really about time…the time you spend not only in the office but outside of the office, socializing, networking is vitally important.
The typical woman after a hard day at work, does she go home to take care of the children or does she go out to the pub with the lads … it just is not going to work well, and their spouse probably will not accept it either. The whole household structure does not accept that.
So, do we really want that to be changed? That is the question. And, would we be better off if that changed? I am not sure about that, and I do not think we look at this that way, but I think that is the reality of the situation.
This interview was made possible with assistance from the US embassy in Warsaw.