By Roxanne Alvarez
One way to promote gender equality that we’ve seen through our work is a focus on women’s economic development. I am concentrating on empowerment by way of economics as it has become clearer to me over time that this type of empowerment is a key to gender equality more broadly for women. This path to empowerment is what this series will attempt to explore.
At a recent FINCA event I attended, there was a panel discussion exploring the question of whether entrepreneurship is the answer to closing the economic gender gap worldwide.
Despite all of our progress in recent years, the panel was still faced with some sobering statistics: according to the World Economic Forum, it will take another 118 years to close the gender gap across all areas of our lives, including health, education, economic opportunity, and politics. And while there have been tremendous improvements in the number of venture capital investments for businesses with women as part of the executive team (15 percent of venture capital dollars in 2014 went to such companies, up from 5 percent in 1999), only about 2.7 percent of those funded businesses had female CEOs at the helm. Additionally, all panelists also noted that for women in many places in the world, their desire to become an entrepreneur is not their only focus because they are required to run households and care for children. Women are expected to have “two full-time jobs” in this regard, noted a panelist.
Indeed, there often seems to be more expected of women who go into business for themselves, yet fewer opportunities to shine. Why is that? The panelists highlighted the ever-present challenges women still face worldwide such as inadequate access to education, the threats of child marriage and other forms of gender-based violence, and the cumulative effects of those disadvantages, which can take the form of low self-esteem or other mental and physical health issues that can limit opportunities.
In the face of such formidable obstacles to success, can entrepreneurship and financial inclusion really have an empowering effect on women’s lives?
For those of us in the microfinance and financial inclusion industries, there has been a great deal of attention on women’s entrepreneurship in the past several decades. We have also come to realize that women are more likely to reinvest what they earn into their own families and into their own communities than men. But business creation is not just about making a living for one’s own family or neighborhood — it’s about gaining and fostering skills that will enable entering a market where you think someone out there wants to buy what you have to sell. It’s about solving a business problem for others and about contributing to wealth creation beyond one’s own community.
Economist Joseph Schumpeter describes entrepreneurs as necessary elements of economic development. Further, he went on to describe entrepreneurs as risk-takers, highly competitive, ambitious, and unafraid of failure or resistance to their ideas. More interesting to me, especially as someone working in social entrepreneurship, is their creative motivation and will to break old traditions for their own sake, not necessarily just for profit. Yet, it is not only for one’s own risk-loving character or perseverance that one will become a successful entrepreneur.
It’s important that the barriers to market entry are kept to a minimum and reasonable for everyone in order to properly build communities and scale businesses. This includes providing equal access to capital and credit lines, property rights in ownership and titling are available to all, with a presence and respect for rule of law and contracts, and finally (and perhaps most ideally) financial transactions are free from fraud and corruption.
Substantive institutional changes in many places are required for women to thrive in business (or anything else, frankly). For example, laws that favor women and girls’ access to schooling beyond a primary education, the ability to participate in the labor market outside of the home, equal access and ownership to property rights, legal protections from violence (including family and partner abuse), and the right for a woman to decide if, when, and how many children she chooses to have are all critical components of women’s economic empowerment. Public policies would formalize these rights for women globally — however, social change often begins long before laws are enacted. It often begins with individuals paving new ways to connect and collaborate in life and in business — and that is where entrepreneurship can play a big role.
I believe that economic empowerment for women is important to gaining other freedoms and rights. Entrepreneurship is one wonderful empowerment tool for women, if we let it be. Through opportunities to complete an education, learn a trade or profession, enable them to work in the same businesses as men, or mentor other women to do the same, women will be able to make more economic choices for themselves and their families. Ultimately, this will lead to more women becoming leaders in their communities and influencing future generations of women to do more to empower themselves — including through entrepreneurship. We should concentrate not only on making the world better for women and girls but also making women and girls better off for this world.