Women entrepreneurship: India has moderate startup activity

Written by FE Online | New Delhi | Updated: Jun 12 2014, 22:44pm hrs
Australia has been named one of three best places for female entrepreneurship, together with the United States and Sweden, while India increased its ranking in 2014, compared to last year.

Announcing the results of the second annual Gender-Global Entrepreneurship and Development Index (GEDI), Dell revealed that more than 75 per cent of the countries surveyed were not meeting the most fundamental conditions required for female entrepreneurs to prosper.

Among the 17 countries included in both the 2013 and 2014 Gender-GEDI reports, four increased their rankings, including India and Japan in APJ, while four showed a decline (Malaysia, Egypt, Mexico and Morocco), and the others ranked comparatively both years.

According to the study, India has moderate female entrepreneurship environment in terms of women identifying opportunities to start businesses (60%), feeling they have the skills (52%) and do not fear failure in starting a business (57%).

The highest performing country from APJ in the 2014 Gender-GEDI rankings was Australia. For the second year in a row, Australia (80) came out on top in the 2014 Gender-GEDI rankings, with the remaining high-performing countries all OECD member countries with highly developed economies. Australia is recognized for providing a good environment to start a business as well as having a high percentage of female business owners who were highly educated. The country also had the most female technology startups out of the 30 countries studied.

However, 23 out of 30 countries studied received an overall index score of less than 50 out of 100, indicating that many of the fundamental conditions for high potential female entrepreneurship development are generally lacking in the majority of countries.

Occupation crowding, or the existence of male and female jobs in a countrys economy, not only contributes to the gender wage gap but also results in the concentration of womens entrepreneurial activity within specific sectors, which can be detrimental to fully utilizing a nations innovative capacities. Out of the 30 countries, only eight received an overall balanced ratio across employment sectors, and in India and Pakistan, formal employment is so highly sex segregated that no employment sectors are balanced.

Despite being ranked as top performers and characterized by overall favorable business environments, opportunity perception is fairly low in the United States and Europe with less than one third of the female population measured identifying business opportunities. In Africa, this number reaches 69 percent. Even with challenges around access to education and capital, female startup activity in the region is high at 86 female to every 100 male startups. Ghana has more female startups than male at a rate of 121 to 100. The Latin American and Caribbean countries included in the Index also exhibit high rates, with a regional average of 84 female to every 100 male startups. Asia also showed potential with more female startups than male startups in Thailand (115 to 100) and high opportunity perception for businesses by women in India.

Even when the business environment is right, social norms can affect general societal support for women as entrepreneurs and their access to experiences as decision makers and leaders. Local attitudes towards women in executive positions can also effect whether women choose to take on these higher roles and responsibilities. For the vast majority of countries in APJ, women are not strongly represented in management positions. Four countries (China, India, Malaysia and Thailand) recorded less than 30 percent female managers, while in two countries in APJ, the percentage of women is 10 percent or less: South Korea (10 percent) and Japan (9 percent).

The Gender-GEDI Index provides key insights designed to help countries advance female entrepreneurship and ultimately bolster the global economy. We believe awareness of the current landscape for women entrepreneurship is the first step toward change, said said Karen Quintos, senior vice president and chief marketing officer, Dell.

The index is a diagnostic tool that comprehensively measures high potential female entrepreneurship by analysing entrepreneurial ecosystems, business environments and individual aspirations across 30 developed and developing economies spanning multiple regions, providing a systematic approach that allows cross-country comparison, benchmarking, and identifies data gaps. The goal of the research is not to provide a headcount of female entrepreneurs worldwide, rather it is future-oriented and designed to be a tool to guide leaders, policymakers and law-makers in identifying country-wide strengths and weaknesses and developing strategies to create more favorable conditions in their countries to enable businesses founded by women to thrive.