This year, on the occasion of Entrepreneurs Day on 21st August, we are waking up to a very different world. As continents are ravaged by disease, death and inexplicable grief, a resilience has emerged, very unique to the human spirit, which has led to collaborations and co-operations between nations, organisations and individuals. Perhaps, the pandemic and our collective anguish has pushed humanity towards greater willingness to lend a hand to the other, displayed in the various iterations of collaboration that we see around us these days. Be that in the form of plugging gaps in critical supply shortages by delivering PPEs and masks or supplying food and other essentials to at-risk communities, the outcome of the pandemic has been manifold and varying. This piece examines the impact of COVID-19 on the economy, particularly on the entrepreneurship sector, and suggests a framework for a gender inclusive future for entrepreneurs. While growing enterprise is a globally shared goal, establishing an ecosystem for encouraging the participation of women-owned and managed business is a globally shared mandate.
Over a considerably short duration, the pandemic has once again laid bare the inequalities that make up our society. From the vulnerable losing jobs to countries having to worry about resources to procure vaccinations and medicines, equality and access to justice are still a dream for millions of people around the globe. And world over, women have borne the brunt of the differential impact of the pandemic, be it in the form of violence, lack of access to health care or obstacles in economic empowerment. While institutions have been responsive to issues such as increased violence at home, the focus on the gendered impact of COVID-19 on the economy has been scattered, if not absent. Of course, as the shadow of the pandemic looms large over the world, priorities have to be staggered, but its economic effect, particularly on women, cannot be overlooked. In addition to lay-offs and wage cuts, lockdowns have deepened earlier concerns about unpaid care work. As primary caregivers in their household, women on average spend 4.1 hours per day on unpaid and domestic work compared to 1.7 hours per day for men. Estimates on the pace of digitalisation of work have also been derailed as work-from-home policies and adoption of technology in production have gathered momentum in a short span of time. This has aggravated the disquietude over up-skilling and re-skilling the workforce and the need for ensuring safety nets to protect workers’ and employers’ interests.
The pandemic has also re-centred the conversation around entrepreneurship, with investors committed towards development of technology, from automation of work to low-cost, efficient alternatives for medical equipment in times of supply shortages. In this climate of change and innovation, it is critical that a level playing field is created, where the opportunities for research and development are available to all and community-oriented solutions become a norm.
The entrepreneurship sector as it exists now is not truly egalitarian. While certain groups and communities are significant contributors to sectors such as handicrafts and cottage industries, the sectors which require intensive capital and technical know-how lack inclusive representation. Studies from pre-COVID times indicate a gender gap in entrepreneurship across regions, with the gap reducing in low-income countries. This lack of gender diversity in entrepreneurship is often attributed to reasons such as traditional male values being associated with the decision-making and risk-taking involved in running a business, a lack of access to capital and social networks that are essential for successful start-ups and a general absence of nurturing support for women entrepreneurs. Women, for example, have to overcome both social and economic barriers to set up a business. Society has normalised notions of putting family first and that women are not innately business-oriented, creating images of uncomfortable compromises for aspiring entrepreneurs.
Globally, only 1 in 3 small, medium and large businesses are owned by women. Their absence is conspicuous in high-growth sectors and women tend to disproportionately represent micro and small business owners. For example, in India, women own 20.4% of micro enterprises (turnover upto INR 5 crores) and only 2.6% of medium enterprises (turnover between INR 50 and 250 crores). But a quiet, but sure change is taking place in the entrepreneurship world. One of the sectors in which women entrepreneurs are doing exceptionally well is education technology, or ed-tech. Worth more than US $250 billion, studies indicate that over one-third of ed-tech companies in the world are led by a woman. In countries like India, women are successfully leading in the fin-tech start-up space, charting the way for others as well.
Over the last decade, India has seen a palpable evolution of entrepreneurship in science and technology, accelerated by the start-up culture. This is evident from the focus of government policy on skill development and entrepreneurship, with dedicated portfolios for pivoting plans and schemes in this direction. Even the Indian Government’s stimulus package in response to the pandemic is underlined by calls for self-reliance and innovation. Recognising the gender gap in this sector, visible steps have been taken to make entrepreneurship more inclusive. The NITI Aayog’s Women Entrepreneurship Platform is a prime example, which provides an ecosystem for existing and aspiring women entrepreneurs, by supporting in areas of skilling, funding assistance and compliance.
To boost the presence of women entrepreneurs in different sectors, targeted interventions by governments and policy makers are crucial. Firstly, a conscious de-coupling of female entrepreneurship and sectors traditionally seen as female is necessary. Perhaps as an unintended oversight, agencies have been predisposed to focus women and skill development on small scale industries such as beautician courses, tailoring and toy-making. This would explain the laudable efforts of self-help groups in producing masks at large scales during the pandemic (although laudable, these propagate our age old bias of having women pursue home science courses, while encouraging men to opt for the sciences and other avenues). While these sectors are empowering in their own right and have opened up opportunities for women, it has also led to an accumulation of skills in specific areas, leading to a lack of women representation in lucrative sectors such as technology, aerospace and defence equipment manufacturing and renewable energy.
Women business owners require support to scale up their enterprises, especially considering the dearth in credit and networks to leverage. Accelerators and incubators can play a massive role in bridging this gap, focusing on gender-inclusivity as well as encouraging investments in solutions that benefit marginalised communities.
On the point of gender inclusion, diversity in the supply chain is a necessary corollary to levelling the playing field. By assessing the extent of such diversity and taking action to increase engagement with and support women-owned businesses, organisations can build resilient and adaptive supply chains. For example, in India, government buyers are mandated to buy a minimum of 25 per cent of annual purchases from micro and small enterprises, of which 3 per cent should be from women entrepreneurs. As of February 2020, figures indicate that the share of women-owned enterprises in annual procurement central ministries, departments, and central public sector enterprises (CPSE) had grown from zero in FY18 to 0.25 per cent in FY20. Other studies indicate that globally women-owned businesses earn less than 1 per cent of the money spent on vendors by governments and large corporations. To address this gap, existing networks and technology can be leveraged to create an ecosystem to share best practices and knowledge on increasing diversity and sustainability in global supply chains. Initiatives led by agencies and collectives such as the World Bank and UN Global Compact in developing toolkits and encouraging alignment with the Sustainable Development Goals are good starting points.
Finally, there is a need to encourage and incentivise entrepreneurship that aligns with the green future of work. According to the ILO, the green transition towards a circular model of production in a low-to-zero-carbon economy could generate 24 million jobs globally by 2030, offsetting job loss by automation to a large extent. Therefore, in addition to mentoring women entrepreneurs for high-growth sectors, it is important to factor in sustainability and resource-efficiency for a comprehensive roadmap towards inclusive entrepreneurship.
On this Entrepreneur’s Day, here’s to an equitable future where women’s dreams are nurtured and accomplished and communities march towards building resilience out of adversity.
(Nishtha Satyam was appointed as the Deputy Country Representative for UN Women, the entity of the United Nations that is dedicated to working towards Gender Equality and Woman’s Empowerment, in India in January 2018. She formerly managed Strategic Partnerships, Policy Impact and Public Relations for the UN Women Multi Country Office for India, Bhutan, Maldives and Sri Lanka. Nishtha has also served as the Private Sector Partnerships Specialist with the Office of the Resident Coordinator of the United Nations and UNDP).