Manish K. Pandey Editor | December 2017 Issue | The Dollar Business
Global Entrepreneurship Summit (GES) 2017 was recently held in Hyderabad, the capital of the southern Indian state of Telangana. Co-hosted by the governments of the United States of America and India, the theme of the Summit was ‘Women First, Prosperity for All’ and as such the focus was on supporting women entrepreneurs and fostering economic growth globally. Perhaps, this was the reason that more than 50% of the delegates that attended the event were women. When the world is looking at India to give a fillip to global economy, there could have been possibly no better a time to organise such event in India and applaud a handful of extraordinary women entrepreneurs. Did I say, handful?
That women are important economic actors has long been settled. In India and across the globe, the liberalisation of trade has had a significant effect on the number of women in the workforce across manufacturing and services sectors. As participation of women in the workforce increased, so did their presence in decision-making roles. In fact, over the years, women have increasingly grabbed headlines for their roles in business, politics and society. And foreign trade is no exception – several women are making significant contributions to this vital sector. But then, the number remains abysmally small.
According to International Trade Centre [the joint agency of the World Trade Organisation (WTO) and the United Nations (UN)], while close to 40% of SMEs worldwide are women-owned businesses, only 15% of exporting firms have women at the helm of affairs. Further, as per the agency, women-led businesses are mostly confined to traditional industry sectors such as healthcare and social assistance, professional and educational services, administrative and support services, etc.
The reason for this gender disparity, be it foreign trade or business within borders, is simple – discrimination against women due to dominance of societies that are still mostly patriarchal. And there are enough evidences to prove it! For instance, according to a World Bank survey of 173 countries, 90% have at least one law impeding women’s economic opportunities. This in itself speaks a lot about the level of discrimination against women in societies, including the developed ones, across the globe. A fallout of this is that women-owned business, across the globe, very often face difficulties in accessing finance. If World Bank data is something to go by, women-owned SMEs have unmet financial needs of between $260 billion and $320 billion a year. That’s indeed a big obstacle is holding women back from success in business.
While the World Bank’s Doing Business 2017 report states that “globally, the elimination of all forms of discrimination against women would raise per capita productivity by 40%”, a research by New York-based management consulting firm McKinsey & Company highlights that “advancing women’s equality could add $28 trillion to global GDP by 2025”. Well, that’s equivalent to adding a new United States and China to global economy! What’s more? There are several studies that show that businesses that have women at the helm perform better, financially and otherwise. While a recent study conducted by Scandinavia’s biggest bank Nordea Bank shows that since 2009 public firms run by women went on to beat the benchmark MSCI World Index in all but one year [the bank studied almost 11,000 publicly traded companies across the globe], a paper published by the University of California last year revealed that “big California companies with at least some women at the top performed considerably better than ones with mostly male boards and executives.”
All evidences suggest that empowering women entrepreneurs and providing them equal economic opportunities not only have a positive impact on the economic growth of a nation, but also results in beneficial outcomes for society as a whole. Hence, policies are needed to better integrate women into the international business system. While the governments across the globe (including the Indian government) seems moving in the right direction on this front, a lot still needs to be done. And the sooner the better!