Why the world needs more women entrepreneurs

By Professor Henrietta Moore, UCL Institute for Global Prosperity

In preparation for Women’s Entrepreneurship Day on November 19th, a glitzy summit is being held at the UN’s New York headquarters today and tomorrow (November 16-17).

Among the panoply of delegates will be some of the biggest names in business today who happen to be female, including the fashion designer Anna Sui, wine magnate and One Mind founder Shari Staglin, who has donated more than $1bn to mental health causes, and cookie queen Kathleen King, founder of Tate’s Bake Shop which was acquired earlier this year by Mondelez for $500 million.

But the event doesn’t just celebrate the achievements of global high-fliers. Its organisers are keen to stress the event’s importance of business in empowering women around the world. They highlight the startling paradox that while women account for 85% of consumer purchases and control $20 trillion in worldwide spending, they also perform 66% of the world’s work and only earn 10% of the world’s income.

That’s undoubtedly because, in most parts of the world, women’s work remains either unpaid or undervalued. It’s also why embracing entrepreneurship and the prospect of financial independence is so critical for women.

According to the 2016/17 GEM Women’s Entrepreneurship Report, overall female entrepreneurship rates have increased by 10%, while the gender gap between women and men starting and running their own businesses has narrowed by 5% in just two years. Another striking fact is where female entrepreneurs are to be found. It turns out the Global South is a hotbed of female enterprise, with African women having the highest rates of entrepreneurship of any continent at 18%.

Historically, this has been explained by the higher barriers to entry that women face in the formal labour market, which may lead them to resort to entrepreneurship, sometimes as a simple act of survival in subsistence economies. But what’s clear is that, when they do take the plunge, women often become innovators, perhaps spurred on by a desire to overcome that very discrimination.

I was in Kenya last week interviewing farmers, some of the most resourceful of all entrepreneurs. They were all worried about declining crop yields, depleted soils and environmental degradation. But their observations were telling. ‘Women are getting ahead, they are organising themselves, while we men are doing nothing’, one young farmer noted. His was not a complaint, but a comment. As another said: ‘It is women who see the future of the family, and they come with ideas’.

Those ideas often involve a social conscience that leads to a prospesity 'multiplier effect' for their communities. In lower-income countries, women reinvest as much as 90% of their money back into their families and communities, compared with around 30-40% for men. When women participate in the economy through business ownership, we witness faster development, an increased ability to overcome poverty, reduced gender inequality, and improvements in children's nutrition, health, and education. When women prosper, their entire communities prosper.  

With the recent Intergovernmental Panel on Climate Change (IPCC) report underscoring the urgency for business and societies worldwide to dramatically reduce carbon emissions to keep climate change within manageable limits, the role of women entrepreneurs - especially in the Global South - remains a relatively untapped driver of change. And yet it’s in the so-called ‘developing world’ where we see some of the best examples of innovation for tackling climate change and environmental pollution head-on.

For example, Lorna Rutto is a Kenyan ‘ecopreneur’ and the inspiring founder of EcoPost, a social enterprise created in response to the need to find alternative waste management solutions to Kenya's huge plastic waste problem. In 2009 she founded her company, which collects plastic waste and manufactures commercially viable, highly durable, and environmentally-friendly fencing posts, used widely across Kenya. So far, her firm has created 500 jobs, saved over 250 acres of forests from being cleared and removed more than 1,000 tonnes of plastic waste from the environment. It’s a win-win for people and planet.

Meanwhile the Energia network, a female-led initiative with programmes in 22 Asian and African countries, is working to get women to embrace their “inner businesswoman”, supporting over 4,000 to start businesses selling improved cooking-stoves, solar lamps and other green energy solutions. In so doing, it’s helping to limit some of the most harmful of all pollutants entering the atmosphere.

These relatively small-scale initiatives may not make global headlines, but they’re just as deserving of attention. Because it’s only by learning from and scaling these incredible local achievements that we’ll effect the scale of change needed worldwide so that profit is no longer in competition with sustainability.

This Women’s Entrepreneurship Day, let’s move the conversation on from the millionaires and celebrate the millions of ordinary women on the ground striving to empower themselves and their communities, and showing us the way to a more responsible business culture.