DARE - Because Entrepreneurs Do

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As more Indian women become aware that starting a company is a viable alternative to housework, part-time work and dead-end jobs, India’s entrepreneurial boom is set to gain momentum

More and more women are forming and starting businesses, and the impact on women in developing countries such as India will be even greater than in supposedly advanced Western economies.

That’s one of the insights emerging from a global Women’s Forum held in Deauville, France in September, which brought together high-powered women from around the world to discuss business, policy, and entrepreneurship. Said Samuel DiPiazza, global head of PricewaterhouseCoopers, “In some countries such as Germany and Switzerland, there are cultural and social perceptions of women that make advancement much more challenging. Whereas in the developing world, where there is a huge cry for talent, where there is enormous growth, you must be able to adjust to these norms faster.”

Philip Anderson

As more and more women appear in the ranks of high-growth entrepreneurs, what will this imply for India? Why is this happening? How will it affect men as well as women?

Indians start off with a cultural advantage: most Indians outside the rural heartland know from experience that women can be very powerful. In some cultures, one encounters very few strong, respected women, but in India, they have long been found not only at the head of state but elsewhere in politics, business, entertainment, and even sport. Even though few people have close friends or school batch-mates of the opposite sex, most would accept that women can be successful leaders because India has plenty of role models, such as Kiran Mazumdar Shaw of Biocon or Shobhana Bhartia of HT Media Limited.

While men might think that entrepreneurship among women doesn’t concern them, understanding how and why women succeed in building businesses can give a man a competitive advantage. Men who go to the trouble to learn how and why women perform well in entrepreneurial settings have a big edge over those who don’t. They can spot up-and-coming women whom others have ignored and become an early partner, investor, board member, or key hire. They also can bring into the top management teams of male-owned ventures those women who can make a difference. By mentoring such women, men can build solid relationships of loyalty and trust, because people who are often overlooked develop special bonds of fidelity with those who helped them when no one else would.

They can also gain entrée into a growing network of powerful women entrepreneurs that extends around the world. Organizations such as the Women’s Forum have for decades worked to build networks for high-powered businesswomen. Men who work closely with such women are treated with respect and regard and are able to get help, connections, and favors that would otherwise be unavailable.

The economic impact of women entrepreneurs is staggering. According to the Organisation of Economic Co-operation and Development (OECD), in Canada, 8,21,000 women entrepreneurs contribute CAD 18,109 billion to the economy. In Germany, 1.03 million women owned-businesses provide jobs for 2 million employees. In South Korea, 36% of all firms are owned by women. Women own a minority of American companies, but women- owned companies enterprises grow at twice the rate of other firms.

What explains these statistics is opportunity, not gender. Exceptionally able men can rise swiftly in the ranks of well-established corporations. So can exceptionally able women, but it’s more difficult, and many women eventually encounter a “glass ceiling,” a level within the corporate hierarchy beyond which few women ascend. Consequently, high-powered women are likelier than their male counterparts to start their own companies. There is no glass ceiling for an owner-manager, the pool of women who found new ventures typically has more experience, education, wealth, and social connections than the pool of men. Even so, a greater number of men start companies because so many more have the assets and experience needed to get an enterprise off the ground.

In some countries, the number of women who have the potential to start businesses is small because many women are not in the work force. For example, fewer than 16% of German women with children below six work full-time according to Elisabeth Kelan, of the London Business School. In contrast, many Indian women who have children are able to work full time because of the excellent support network that exists around them in the form of extended families or household help. And for many Indian women, working isn’t a choice; they must work to support their families or to sustain a middle-class lifestyle.

Says Bhairavi Jani, Director at the SCA Group of Companies (www.scagroup.in), which offers value-added services for supply chain activities, “In India, today, consumer needs are changing from basic to aspirational. Lifestyles are changing and one person’s income cannot sustain these. Along with this, women are demanding more flexibility in the work environment. Since they are becoming more self aware, with the rise in education levels, most of these women are also seeking self reliance. More and more women as a result of this are turning to entrepreneurship as a career choice. Since women are now choosing to give up regular 9-5 jobs for a more challenging work environment, the numbers of successful women entrepreneurs is also steadily increasing.”

The promise of female entrepreneurs from India is exemplified by Nandini Pandhi co-founder of GreenMango (www.mygreenmango.org). She and her partner, Yasmina McCarty of the Philippines, were among a select group of women who won the first annual Cartier Women’s Initiative Awards, sponsored by the world-renowned luxury goods maker Cartier in association with INSEAD and McKinsey. Cartier and its partners screened more than a hundred projects in the pre-launch or startup phase that had a woman as leader or part of the leading team. Fifteen entrepreneurial teams from five continents made the short list, from which one winner per continent was selected. Pandhi and McCarty were selected as Asia’s best for proposing a virtual mobile-phone-based marketplace for low-income entrepreneurs and their customers in developing countries.

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