Women Entrepreneurs Becoming Force in the Developing World
BY SARAH J. ROBBINS
Progress and Potential
Want to know how a society -- in the developing world especially -- really ticks? Ask the women.
From Nairobi to New Guinea, women have long served as the family's primary caretaker -- cooking, cleaning and supplies gathering. They're also increasingly the family's breadwinner. It's a sad fact that in war-torn or impoverished parts of the world, men are often forced to either pick up arms or earn money in remote locations, away from their families -- leaving women to look after children and the household.
Last year, entrepreneurship activity among men and women was almost equal in most sub-Saharan Africa economies, according to the latest Global Entrepreneurship Monitor survey. In Ecuador, Panama, Ghana, Nigeria and Thailand, the rate of entrepreneurship among females was higher than that for males.
Women entrepreneurs have benefited, in part, by the rise of microfinance. That access to capital -- even at high rates of interest -- is credited with helping women either start or expand a microenterprise and, by extension, more sustainably provide for their families.
In time, these businesses may grow beyond their "micro" label. They may scale up and create thousands, if not millions, of jobs. The potential is thrilling.
You may not have heard of the "third billion," but you may one day feel their impact. The third billion is a term used to describe the billion women, mostly from emerging markets, who will join the global economy as employees, employers and entrepreneurs over the next decade.
From India to Turkey, women entrepreneurs are on the leading edge of this shift, poised to transform their local economies and, in doing so, change the world.
"We believe that women are tremendous, untapped investments that yield huge returns for entire communities," says Natalie Byrne, director of global impact at skincare company Dermalogica. In 2010, Dermalogica and the nonprofit Kiva launched the Financial Independence Through Entrepreneurship (FITE) program to help women entrepreneurs start or grow their own businesses. To date, it has provided microfinance loans to 30,000 women across 68 countries.
While the experiences of women entrepreneurs in the developing world are as diverse as the countries they inhabit, since the difficulties facing a small woman-owned business in Vietnam looks nothing like that of a new venture in, say, Turkey or India, there are some common challenges.
For example, Melek Pulatkonak, founder and curator of the Turkish Women's International Network, says education and training play an important role in improving the economic position of women. While about two-thirds of the world’s illiterate adults are female, research shows that educated mothers are more likely to participate in the labor force.
The La Pietra Coalition, a group of leaders advocating for women's advancement that last year launched The Third Billion campaign to support the scores of women entering the workforce, identifies four challenges that stand between women and equal opportunity. In addition to access to education, these issues include access to legal protection, access to capital, and access to markets. In many cases, they overlap or compound one another.
"The fundamental difference between entrepreneurs in developing countries and in the U.S.," says Byrne, "is that in many parts of the world, women don't have access to banking systems and often can't receive loans without permission from a man such as their husband or brother."
Last month, tech company Dell announced the results of its gender-focused Global Entrepreneurship and Development Index, which ranks 17 countries based on a wide range of indicators, including some of those identified by the La Pietra Coalition above. Unsurprisingly, the U.S., Australia and Germany ranked at the top of the list, while India, one of the fastest developing economies in the world, ranked at No. 16. India scored relatively high in the category of "opportunity recognition," which measures the number of women who can identify a good climate to start a local business, but low in "institutional foundations," or the established support and infrastructure they need to pursue their goals.
Stuti Jalan started Bombay and Delhi-based public relations firm Crosshairs Communication in 2002 when she was 23. "I've matured as the market matured, and I had a mentor who told me that I had nothing to lose," she says. Still, she recognizes two sides to India. "We have powerful women leaders and an urban population that is very forward thinking," she says, "but there is still a mindset that is not very accepting."
The biggest difficulties, Jalan says, come when navigating bureaucracy. "When I walk into a government office, I have to make sure I'm dressed a certain way," she says. "I take a male colleague or consultant along so I'm taken seriously."
Turkey, which ranked No. 11 on Dell's gender index, has a young population that's driving its economic growth. And while the labor force participation of women there is just 29.5 percent, they hold 12 percent of chief executive positions -- triple the percentage of women running the largest 500 companies in the U.S.
"I don't think I'm a woman when starting a business or running a team," says Pulatkonak, in Turkey, "unless someone makes me feel like a woman in the workplace."
Turkish women entrepreneurs, especially in the country's less-developed eastern half, need better support systems in their families and adequate financial opportunity, Pulatkonak says. "One of the biggest challenges for women is to get access to capital so they can get a license to build a business." That access, she says, starts with a bank account, which only 33 percent of Turkish women have, according to the Dell study. It paves the way to bank loans and credit lines and, ultimately, to credibility in the eyes of local and state authorities who grant permission to operate.
Still, Pulatkonak sees great potential for the young women entrepreneurs coming into the pipeline to continue Turkey’s progression toward equal rights, which has not only led to greater visibility for women leaders but has also recently paved the way for more egalitarian divorce laws. “Things are changing,” she says.
It's a sentiment echoed by Jalan, in India. "Those of us who are responsible for the change," she says, "are responsible for bringing other [women] with us."
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