It’s 2015 and you would expect men and women all around the world to have equal rights and opportunities. But, sadly, the reality isn’t even close. While certain countries seemed to be doing slightly better than others, the situation overall is discouraging and has a lot of potential to improve.
Adding to this, is a newly released study by Dell, which reveals that the location and gender of an entrepreneur have a huge role to play when it comes to starting a business. Countries like the U.S., Canada and Australia acquired the top positions for best countries for female entrepreneurs in the survey, while the lower ranks were reserved by Bangladesh, Pakistan and India. I had myself had a first hand experience of the issue while researching for my Top 10 women entrepreneurs of India article last year.
Dell’s Global Women Entrepreneur Leaders Scorecard report also showed that how challenging it could be for a women to succeed in launching her own venture, even in some of the top-rated nations in the survey. All of the 31 countries evaluated in the survey were given an overall score, based on their access to resources, business environment, the pipeline for female entrepreneurship, and several other parameters. The United States emerged with the best grade with a mere 71 out of 100 possible points. While, more than 70% of the countries evaluated scored below than 50.
Let’s have a look at some of the reasons for such horrific scores.
1) Aspirations – They say when you aim, aim for the stars because only then would you reach closer to the sky. But, the situation with women entrepreneurs is not the same. The study revealed that only 21% of entrepreneurs included in the study had aspirations to grow their ventures by 50%. Undercapitalisation is the root of the cause of such modest aspirations of the female entrepreneurs. Even in the best of the best countries, with best of the best business environments, there is a huge gap to access to capital for women who want to scale their companies. It is sad to note that Women-owned companies are 50% less capitalized than their male-owned counterparts.
2) Emerging Economies – Emerging economies with their lack of basic business resources also pose as a big hurdle for female entrepreneurs. In some cases, these lack of business resources is joined by cultural restrictions. For example, Nigeria, has the highest percentage of women who think they have good business acumen and skills to run a successful venture, but the business environment offered to them in their country along with the high corruption level, discourages them to pursue their dreams of owning their own business.
While, in countries like India and Pakistan, women can be seen owning micro businesses. This is possibly because of the social norms that diktat and limit the number of large businesses run by women. The cultural restrictions imposed on women in these cultures further adds to the worsening condition of women entrepreneurs. According to Dell, only 10% of Pakistan women have access to the Internet and only 3% of them have a bank account.
3) Role Models – Lack of role models, people to whom they can look up to, is also one of the reasons for such discouraging figures of females entrepreneurs all around the world. Lack of female role models has a direct impact on the entrepreneurial pipeline. That is, the less people you see in top positions, the more you are convinced that even you can’t achieve that amount of success or reach that position.
4) Government’s Role – One of the important role in entrepreneurship of any country is play by its government. Notably, only 1% of the public procurement contracts that account for 30% to 40% of GDP in developing countries and 10% to 15% of GDP in developed nations, go to women owned companies. Of the 31 countries studied by Dell in the survey, only South Africa and the U.S. had public procurement programs actively promoting female entrepreneurs. Further, only four countries tracked the growth of women-owned companies through an annual census, and only one country—Chile—had both a general census and did a specific tracking of gendered data of all government-funded entrepreneurship programs.
Data collection is important, as it provides a strategic roadmap for the governments to handle the situation at hand.