According to data from the Department for the Promotion of Industry and Internal Trade (DPIIT), as of February 1, 2020, there were 27,916 startups in India, making it the fastest-growing startup ecosystem in the world. However, in terms of gender parity and equal opportunity, the Index of Women Entrepreneurs 2019 ranked India 52 out of the 57 surveyed countries. In fact, of the $14.5 billion investments raised last year, only 12 percent went to startups with at least one woman co-founder. Many of the women-led businesses in the country today are small and self-funded, and the COVID-19 outbreak has only made them more vulnerable to failure.
Data also shows that women-founded startups generally earn more on every dollar of investment and that women-led organisations are run better and more inclusive in their approach. This means that in addition to creating a more diverse workplace, they are more likely to reach out to critical market and customer segments and to address key environmental and social issues. One of the key issues we are facing now is the problems that are caused by climate change. Women in India have played a key role in sustainability practices, especially at the grassroots level. This knowledge can be leveraged by businesses to build innovative and scalable solutions that tackle challenges around sustainable energy, while providing more avenues for employment.
To understand the challenges around women and climate entrepreneurship, UNDP India hosted a panel discussion around Accelerating Opportunities for Women Climate Entrepreneurs. Hosted by Karanraj Chaudri, Advisor, Social Impact Investments, UNDP India, the panel included Shoko Noda, Head, UNDP India; Vaishali Nigam Sinha, CSO, Renew Power, an Indian renewable energy company; and Ajaita Shah, CEO, Frontier Markets, a women- driven last-mile delivery platform that serves rural India. These were some of the key takeaways from that session.
1. Women need to be at the centre of the value chain
When women are given the skills and the tools they need to earn a living, that's when they are able to fully take on their roles. Research has shown that women were able to drive impact and behavioural changes at multiple levels to create safety and opportunity in different ways. Women who were empowered were also able to offer more insights that drove innovation further because they started speaking about the solutions they needed to address more challenges. As natural communicators, women can be successful influencers, who further drive the adoption of innovation.
2. The pandemic has made people think about the climate in new ways
While the discussion around climate change is a multi-layered one, the outbreak of the novel coronavirus has made people think about climate in new ways. People have learned to step back, slow down, and appreciate the environment, and really think about public health. With the world at a pivotal moment as governments are designing stimulus packages to reboot economies, companies need to think about what they're doing with respect to their carbon footprint. A low carbon growth path will stimulate the economy while mitigating climate risk. A lot of opportunities will open in the climate space and the workforce needs to be trained to meet these new requirements. The key elements of a green recovery will be about governments rethinking policies or which investments to promote to decarbonize the sector.
3. Better opportunities for women will boost the economy
Today, women in India only contribute 17 percent to the GDP, which is less than half of the global average. A 2018 study by McKinsey Global Institute showed that India could add over $770 billion to its GDP by 2025, by giving equal opportunities to women. We need to create better incentives for women while building their confidence as many have been raised in an environment where the families have not been supportive of their ambitions. The UNDP’s DISHA project focuses on skill development and confidence building. When women are supported and provided financial access and mentorship, it leads to tangible benefits. Women who were mentored under DISHA’s programmes said that they witnessed a 30 percent increase in profit and experienced higher levels of personal satisfaction.
4. Women-led enterprises face both long- and short-term barriers
One of the key challenges that women in India, particularly in rural areas, face is the lack of confidence in their abilities. They need to see successful women who walk and talk like them so that they can believe that they don’t have to be different to succeed. The second is that women have been steered away from STEM education as they have been led to believe they don’t have the aptitude for engineering. Women have also been at the receiving end when it comes to climate entrepreneurship, and 10 percent of entrepreneurs in the space are women. There are also some biases that women have to deal such as an inability to cope with business and family pressures. One way to overcome this is for mentors to step up and guide and counsel women who are foraying into entrepreneurship.
5. Educate peers about the contribution that women can make
It is crucial to raise awareness among male peers and investors about the important contributions women can make towards building a well-rounded organization. Many feel that they are already doing enough towards inclusion, but there is still a huge gap in understanding of what needs to be done in terms of women’s expectation and what is being done to meet those expectations.
To understand why there should be an increased focus on opportunities for women entrepreneurs and learn more about the significant impact that ReNew Power and Frontier Markets are making in the areas of sustainable energy and rural entrepreneurship, respectively, click here for the complete session.