Women entrepreneurs in emerging economies: driving growth and innovation
As the world’s fifth-largest economy, with the third-largest ecosystem for startups, India’s entrepreneurial ambitions are set to accelerate as never before, with women increasingly staking their claim as equal partners in this endeavour.
In the recent years, entrepreneurship has emerged as a powerful lever of growth in emerging economies. An encouraging trend associated with this has been the high levels of participation from women entrepreneurs in this wave. A report by Global Entrepreneurship Monitor published last year revealed that 17% of working-age women in developing countries are already engaged in business, with another 35% aspiring to do the same.
This is significantly higher than the rates of female participation in entrepreneurship in high-income developed nations (9% actively engaged, 14% aspiring) - exemplifying the fact that women in emerging economies view entrepreneurship as the path to a better future, for themselves and their families and communities.
We can observe this positive trend in the Indian context as well. 14% of entrepreneurs in India are women, with over 20% of the MSME sector comprised of women-led businesses. As the world’s fifth-largest economy, with the third-largest ecosystem for startups, India’s entrepreneurial ambitions are set to accelerate as never before, with women increasingly staking their claim as equal partners in this endeavour.
Examining the women-led entrepreneurship wave
The wave of women-led entrepreneurship in India is visible across a wide range of sectors, including education, healthcare, e-commerce & retail, fashion and technology. Women entrepreneurs are bringing new ideas and approaches to traditional industries, such as handicrafts; while also making their presence felt in new-age technology-driven sectors, in which female professionals already make up a considerable proportion of the workforce.
The positive impact of women entrepreneurs extends beyond mere participation. With their exceptional work ethic and keen business acumen, female leaders have made their mark in the entrepreneurial sphere, driving performance and growth. Indeed, according to a survey by Bain & Company, women-led startups deliver 35% higher ROI than those led by male entrepreneurs. Their empathetic and collaborative leadership styles enable them to effectively motivate workforces and deliver results; and is particularly invaluable in business activities that rely on interpersonal relationships.
As they are often the primary managers of their households, responsible for the vast majority of purchase decisions, women have an acute understanding of the need for their families to be financially secure, even prosperous. This has motivated many women, particularly in rural India, to embrace the path of entrepreneurship to bring greater financial stability to their families and, in many cases, lift them out of poverty.
Moreover, women-led businesses provide employment to a staggering 22-27 million individuals, improving the financial circumstances of numerous families and contributing immensely to job growth as well as to the nation’s overall economic development.
How to boost women-led entrepreneurship
While women entrepreneurs are playing a powerful role in emerging economies, they are sometimes held back due to a number of challenges, such as lack of access to resources (in the form of capital, or mentorship from experienced leaders) or limited opportunities for skill development. The determination and resilience of these entrepreneurs enables them to overcome these challenges.
Nevertheless, there are a few measures that can be taken by policymakers, investors and other stakeholders to build a more conducive environment for women entrepreneurs in India, and other emerging economies, and unlock their full potential to drive growth.
Interventions at a systemic level play a critical role in supporting women-led entrepreneurship. These including addressing policy constraints, as well as supporting female business leaders with specialized programs. Regulatory and policy reforms, coupled with public and private sector investments, will significantly expand the access of women entrepreneurs to capital, markets and industry networks.
Many high-growth sectors, including technology-centric sectors such as ICT, tend to be male-dominated, which excludes women from valuable professional and business opportunities in these spaces. This gender disparity is exacerbated by the fact that most global VC funding is directed towards these high-growth sectors.
Targeted initiatives to support women-led businesses in these industries, through training programmes, incubators and accelerators, will go a long way towards bridging this gender gap. Supporting women entrepreneurs in these sectors will also have a tremendous positive economic impact, in the form of increased job growth, innovation and product/service delivery.
Last but not least, it has been observed that women investors are more likely to invest in women-led businesses. Therefore, increasing the number of women investors in VC firms, private equity funds, banks etc. will give a strong impetus to women-led entrepreneurship.
Towards a more prosperous and equitable business landscape
Bain & Company and Google’s report on women entrepreneurship in India predicts that women-led entrepreneurship has the potential to create as many as 150-170 million employment opportunities in the country by 2030. With the right support, skill sets, and resources, female business leaders can usher in a bold new era of inclusive and equitable growth across every sector of the economy.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)
