This article is based on the research paper Female Entrepreneurship in Emerging Markets – Challenges and Opportunities in China and India written by the founder of The Asian Network
“When I dare to be powerful, to use my strength in the service of my vision, then it becomes less and less important whether I am afraid.” – Audre Lorde
India is a country with a population of 1,2 billion people but only 19.000 of them are self-employed women. In a country were one of the most powerful figures is a woman, Sonia Gandhi, the rate of female entrepreneurs is less than 10%. In the Gender Global Entrepreneurship and Development Index (GEDI), India was placed as second last of all countries and left only Uganda behind. What does that tell us? What is it, that holds Indian women back from becoming an entrepreneur?
In general there are three different types of female entrepreneurs in India:
- THE AIMLESS: These are women who set up their businesses as an alternative to unemployment. They often live in rural areas and most of them are illiterate women without strong financial background. These women are most likely to be involved in family businesses, such as agriculture, dairy and animal husbandry. As the rural population of India makes approximately 70% of the whole country, most of the entrepreneurs fall in this category. There are various studies about grass-root entrepreneurs, yet there is still no reliable data on the full extant of self-employed women in rural areas.
- THE RETURN WORKER: They have quit their jobs in the past in order to fulfill family needs. Now these women are seeking for self-fulfillment outside the family sphere. They are frequently located in cities or towns. Due to their sufficient education, they like working in services such as kindergarden, beauty parlors or clinics. Most likely these entrepreneurs are in the age range of 40-50 years, when the kids left the house due to studies.
- THE STRONGLY SUCCESS-ORIENTED: These women view entrepreneurship as an opportunity for greater professional fulfillment or to overcome obstacles against career advancement. They most likely live in big cities and received a higher level of technical and professional qualifications during study terms or first experiences on the labor market. The most fortunate of them have a sound financial position, which enables them to start their businesses with more independence according to funding.
Yet, this still doesn’t answer the question why there is only such a diminutive number of female entrepreneurs and what unsurmountable barriers they are facing. According to a study of 45 entrepreneurs in India, 34% would say that the social hierarchy is the most significant hurdle to overcome. The Indian society is coined by a profound male-dominated social hierarchy which appoints men a life of success outside the household and allocates a low-profile appearance to women within the household. This leads to the next issue.
30% argue that the household duties in general and an early marriage are still one of the top-rated barriers for women to become entrepreneurs. Especially in rural areas where the society’s pressure and the financial situation of the family determines the housewife-being.
The last, and most compelling problem is the lack of education. 100% of the survey participants say that education is highly significant for a successful business. Due to family needs an immense number of girls drop-out of school after primary school. In India there is still more than 26% of the population illiterate – most of them are girls.
This combination leads to a lack of confidence and raising doubts over the personal entrepreneurial credibility. That is how the general stereotype was born: women entrepreneurs are less qualified, less capable and therefore less entrepreneurial – which again makes it virtually impossible for them to receive financial funding.
Women are one of the fastest rising populations of entrepreneurs, and contribute significantly to innovation, job creation and economics around the world. Still, according to the WorldBank data, there is a decline in female labour participation and a incredibly small number of self-employed women in India. If NGO’s and the government find a solution for erasing the gender discrimination and can manage do diminish the barriers for women to get access to financial resources, than the new created ventures will create new jobs, new labor opportunities and this can result in a significant boost of the country’s GDP. Isn’t that worth a try?
Check out the video to this topic: HPAIR 2014 – Female Entrepreneurship India – Melanie Schweiger
and The Harvard Project for Asian and International Relations