Where Are Our Women Entrepreneurs?
We need to make women entrepreneurship an equitable proposition for society and the economy
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The theme for this year's International Women's Day was "Choose to Challenge'. The short description on the IWD offers an explanation: "A challenged world is an alert world and from challenge comes change.' It goes on to offer three actions to forge a gender equal world: the celebration of women's achievement, raising awareness against bias and taking action for equality. While all three are of great import, it is the third that interests me the most.
The ILO reports that they make up about 48.5 per cent of the workforce in 2018, while another report states that women made up only about 20.7 per cent of India's workforce in 2019, a decrease of 10 per cent from 1990. On the entrepreneurship front, the numbers are similar: India has 13.5-15.7 million women-owned enterprises and represent 20 per cent of all enterprises. This didn't sound too bad until I went on to read that many of these are single person enterprises, and that a number of enterprises that are registered as women-owned enterprises, are in reality, not controlled or run by women. So where is the gap? What can we do to close it? And why is it in all our interests to promote women entrepreneurship?
First, let's examine the challenges that women entrepreneurs often face.
Inequality in the venture capital space
A few years ago, researchers from PNAS (Proceedings of the National Academy of the United States of America) conducted an experiment where the same idea was pitched to investors by a male and a female voice. The result: two thirds of the investors were more inclined to invest when the male voice presented it. Another report suggests that many women entrepreneurs are using their personal wealth to fund their ventures.
Financial and marketing skills
The commonly cited challenges are cash flow management, scaling up the business and consistently acquiring new customers. It is widely observed that women entrepreneurs are more in want of financial management training, marketing strategies and data management. A recent ad by a leading fintech player in India was widely discussed amongst people from varying strata as it highlights the huge gap that exists between women and men in matters pertaining to money.
Mentorship and networks
Many women entrepreneurs struggle due to a lack of professional support as they are not part of many formal or informal networks. This gap is most keenly felt by solopreneurs who do not even have the support of a co-founder and partner.
Unsurprisingly, many women entrepreneurs struggle with self-doubt and low confidence. The lack of marketing, technical or financial knowledge, few role models, and the absence of a support system (at home and out of it) contributes to this.
In India, women are conditioned to defer to their fathers or husband on matters pertaining to property or money. Also, in the traditional Indian set-up, women are typically the primary caregivers in their homes, which curtails the time that they have to pursue their ambitions. Sure, men are slowly sharing more of the load of childcare and household chores, but we're still quite rooted in our patriarchal ideals.
Now, the money question: Why is it important to address these challenges and what can we do to make women entrepreneurship an equitable proposition?
On the contrary, research shows that female-founded and co-founded star-tups do significantly better than all male ones. A study conducted by the Harvard Business Review showed that women scored better than their male counterparts in key skills: leadership, team working, innovation and problem solving. They also hold about 40 per cent of the world's wealth. This draws out the importance of expertise gained through the continuous exposure that most women are lacking.
Specifically, in the Indian context, women entrepreneurship impacts income and employment, creates jobs, and benefits household finances and its allocation. The potential for our 1.3 billion economy is immense: with the right structures and support, women entrepreneurs could generate between 50 and 60 million direct jobs and about 150 -170 million jobs by 2030.
What can we do to level the playing field?
Well, as it turns out, quite a bit.
An integrated policy framework: While there are several state-led programmes and initiatives to promote women entrepreneurship, we need to make it a nation-wide mission. This would mean a framework spearheaded by the central government, working with the leaders of each state, public and private agencies, and self-help groups to develop policies and programmes that support women-preneurs in urban, semi urban and rural India.
Equal access to finance: It's true that money does make the world go round. In this context, women-focussed funding at both national and state levels, simplified and transparent processes for securing capital through loans, finance products that are tailored to the category can be of rescue. This will not be in the class of "reservation for women entrepreneurs', but a rounded-out approach to ensure the opportunities available is accessed equally by both men and women. As important is the development of an ecosystem that informs, educates, supports accountability, and helps to track progress and course correct.
Development of skills and mentorship programs: It's imperative that women entrepreneurs are equipped with the knowledge that they need to grow their ideas and businesses. Incubators, think tanks and accelerators are a great place to start, provided they also cater to the women's specific skills and constraints. The programmes need to be targeted, and in the case of semi urban and rural India, also address the digital divide that prevails. Finally, mentorship programmes that offer role models to emulate, across the country, would allow for the exchange of ideas and best practices.
Creation of networks: Informal and inclusive support networks could facilitate the exchange of ideas, information, know-how, capital and more. Further, programmes with local bodies and government-led initiatives would not only promote entrepreneurial engagement, but also offer access to technical and business counselling and opportunities.
Role models: Showcasing successful individuals and communities could be a great way to boost confidence and morale, and perpetuate a shift in beliefs around stereotypes pertaining to women.
We can agree that if the past year has shown us anything, it is that women are a mighty force. They have stood on the frontlines of the crisis as healthcare workers, caregivers, and community organisers. It is not lost on me that some of the countries that have handled the pandemic most effectively have women as their heads of state. There is ample evidence to suggest that supporting women entrepreneurship would not only challenge the gender divide that prevails but also accelerate the country's social and economic growth. Simply put, it is in all our interests to make women entrepreneurship as common as can be.