Moving women beyond “Micro”
March 22, 2013
Nearly 1 billion women around the world could enter the global economy during the coming decade. They are poised to play a significant role in countries around the world—as significant as that of the billion-plus populations of India and China. Yet this “Third Billion” has not received sufficient attention from governments, business leaders, or other key decision makers in many countries. Estimates by Booz & Company indicate that raising female employ¬ment to male levels could have a direct impact on GDP of 5 percent in the U.S., 9 percent in Japan, 12 percent in the United Arab Emirates, and 34 percent in Egypt. But, greater involvement from women has an impact beyond what their numbers would suggest.
For example, women are more likely than men to invest a large proportion of their household income in the education of their children. As those children grow up, their improved status becomes a positive social and economic factor in their society. Thus, even small increases in the opportunities available to women, and some release of the cultural and political constraints that hold them back, can lead to dramatic economic and social benefits. If women-owned businesses are to achieve greater growth, countries must make sure that women have the right to own and inherit property, which is often a requirement for raising capital.
Lenders can consider creative solutions in countries where women do not have these rights, such as cash-flow loans based on income rather than assets, or sophisticated psychological profiles that can predict a borrower’s odds of repaying her loan. Women, for their part, need to break out of the service sector, where women-owned businesses in many countries are clustered. They must learn to manage risk so that they are comfortable starting their business from a larger capital base, and pursue private equity or venture capital when it is merited. And they should find or form supportive networks that can offer mentorship, counseling, and access to information.
Access to data
In all areas of women’s economic empowerment, there is a need for detailed, frequently updated, and gender-disaggregated data — so interested parties can better understand the issues that women face and more effectively frame solutions. This includes data on access to capital, property rights, and small and medium-sized enterprise (SME) ownership, among other issues. For instance, governments can conduct surveys about household work and use of women’s time to get more accurate information on women’s contribution to the formal and informal economies, including the care economy, and formulate policy accordingly. (The term informal economy refers to very small local businesses, often in the service sector, that are not registered, often do not pay taxes, and use only cash. As a result, these businesses usually do not show up in national economic statistics and do not factor into employment policy, social security, or other labor issues.)
In the entrepreneurial landscape, the information available — with the exception of a few publications such as the Global Entrepreneurship Monitor—tends to be national, rather than regional or global, and it is often based on qualitative data and case studies, with an emphasis on developed markets. Reports generally focus on startup rates, obstacles, and characteristics of business owners, excluding issues such as survival rates and use of financial instruments. A better understanding of not just how women-owned companies start but how they grow and flourish would offer valuable lessons for other entrepreneurs.
Women’s full participation is an economic necessity
Women’s empowerment, which has traditionally been the domain of governments and NGOs, is drawing increased attention from the private sector as leaders realize that women’s full participation in the world of work is not merely a social good but an economic necessity. This issue is complex enough that actors from all spheres are required to address it. The key to success in these partnerships will be allowing each entity to focus on its strengths. Governments have an important role to play in policy, which is critical in eliminating discrimination and ensuring that women have equal rights. Governments are responsible for educating women so that they are prepared for the workforce, they can offer various forms of support to help women manage their family responsibilities, and they can play a vital role in growing womenowned businesses by offering access to government contracts. Finally, governments can have an influence outside their borders by giving greater emphasis to gender equality in their aid programs.
NGOs have long-standing experience with women’s issues in various communities, and can offer important insights into both the big picture and the details of local circumstances. They provide critical funding, training, mentoring, networks, and advocacy, consistently putting gender parity on the agendas of both government and the private sector. As employers, investors, and consumers, private-sector companies have a number of roles to play in empowering women. By hiring women in developing markets, they can facilitate women’s independence and increase their stature in society. They can bolster their own talent base by creating opportunities worldwide for women to move into senior positions. They can support female entrepreneurs by setting goals for more diverse supply chains. And they can leverage their power as investors by promoting gender equity in the workplace; providing financing for women-owned businesses; and developing jobs, products, and services that benefit women.
This article is adapted from the Research Report, “Empowering the Third Billion - Women and the World of Work in 2012.”, jointly authored byDeAnne Aguirre, Leila Hoteit, Christine Rupp, and Karim Sabbagh for Booz & Company.
with attribution (and link, if online) to www.tias.edu.
To be cited as: “Moving women beyond “Micro””, Aguirre, DeAnne, www.tias.edu, March 22, 2013.
- OECD, Women’s Economic Empowerment: Issues Paper, DAC Network on Gender Equality, April 2011.
- OECD, Gender Equality in Education, Employment and Entrepreneurship, 2012.
Report: Empowering the Third Billion
DeAnne Aguirre senior partner of Booz & Company.