The world of entrepreneurship puts forth many challenges in front of any individual in today’s competitive environment. Seed funding and cash flow management are the major hurdles that most entrepreneurs face. However, roadblocks for women entrepreneurs begin with discriminating socio-cultural beliefs and norms in India.
Despite some significant strides over the decades, India’s growth story has ignored women. According to a report by Bain & Company, India has 13.5-15.7 million women-owned enterprises, representing only 20% of all enterprises, most of which are single-person enterprises. The World Bank estimates that 75% of working-age women (35% of India’s working-age population) currently does not have paid work and only 35% of women actively use their bank accounts, further limiting their opportunities.
Although women represent 42% of the agricultural labour force in India, women own just 2% of farmland. Furthermore, the Covid-19 pandemic has risked losing decades of progress on women’s economic justice and rights. Post the pandemic, as routine jobs become automated, the pressure on women will intensify and they will experience higher unemployment rates. By 2030, India’s working-age population will surpass an unprecedented one billion, and up to 400 million women’s economic potential may be left unaddressed.
To foster inclusive economic growth in India, we must work towards increasing the number of women entrepreneurs. This has the potential to drive transformational gains for individuals, the economy and society. Bringing up an equal number of women in the labour force can enhance the Gross Domestic Product of a developing country like India by over 27% through direct, indirect and induced employment. Reports show that when women earn an income, they invest 90% in their families and community. Women also invest more towards children’s education and health, which can provide high development rates for a country like India.
It has been observed that men tend to lay the foundation of their enterprises with twice as much capital as accorded to women. However, research shows that when provided with equal access to resources, women-owned enterprises produce equally strong economic outcomes when compared with enterprises led by men. Under-representation of women in business is a big socio-economic setback for a growing economy.
Incubators and Accelerators are designed to support entrepreneurs navigate the obstacles in the business ecosystem. These programmes are designed to mentor, assist, fund and scale start-ups. They generally assist small firms, particularly those in their early phases, in growing and expanding by offering initial financing, appropriate workspaces and access to a large network of successful entrepreneurs. The participation rate of women in such programmes is relatively low.
The need of the hour is for incubators and accelerators to step up and target women exclusively for their programmes. There are numerous instances of nations, some incomparable stages of development to India as well as states within India, which structurally allows and encourages female entrepreneurship. Examples include industrialised nations such as the United States and Canada, which have nearly 40% of their businesses owned by women, and developing countries such as Indonesia, Vietnam and Russia, which have more than 30% of their businesses owned by women.
Several states in India including Meghalaya, Mizoram, Manipur, Tamil Nadu and Karnataka lead the way in female representation in the MSME sector. An acceleration in targeting women today will result in a complete transformation of India’s entrepreneurial landscape. This will bring India at par with several emerging and advanced economies, where nearly 40% of businesses are women-run. It will also create jobs that are required to absorb the working-age population by 2030. It is also critical to identify the various segments of women entrepreneurs. They have different ambitions, motivations and constraints depending on where they are coming from. A transformative and methodical strategy is required to overcome the difficulties faced by potential entrants and current women entrepreneurs.
Entrepreneurship has the potential to be one of the most important routes for women’s economic empowerment and equality, as well as to have multiplier effects on poverty reduction and long-term economic growth. Women need increased and creative access to capability development and mentorship. A profound understanding of the need, as well as a coordinated scaled effort across diverse ecosystem actors, will be required to accelerate prospective and present women entrepreneurs.
Some of the ecosystem actors include: governments at all levels, grass-roots organisations, the investment and banking industry, other private companies, educational institutions, and the media. Incubator and accelerator programmes need to onboard more female entrepreneurs, investors and leaders as members of their community to engage with the women-founded start-ups in their programmes. Women-only and sector-specific incubators will drive targeted networking and mentorship. Unlocking entrepreneurship among Indian women will offer an extraordinary potential to transform India’s economic and social trajectory for coming generations.