Remarks by Ms. Ronnie L. Goldberg
Executive Vice President and Senior Policy Officer
United States Council for International Business
Jamaica Employers’ Federation Forum for Executive Women
I am honored and delighted to be with you this morning at the launch of the JEF Forum for Executive Women. I am speaking to you in a dual capacity: I am Executive Vice President of the United States Council for International Business. Like you, we are a membership organization, representing some 300 corporations, firms, and associations from all sectors of the U.S. economy. And like JEF, we represent our country’s employers in the International Organization of Employers (IOE), which has a membership of some 140 countries, and which represents the views of employers on international labor and employment policy issues at the International Labor Organization (ILO) in Geneva. And that is my second hat. I am also here in my capacity as the IOE Regional Vice President for North America and the Caribbean.
Jackie [Coke-Lloyd, JEF Executive Director] has asked me to speak on the subject of Women’s Entrepreneurship. I want to begin by setting the broader context. Women’s entrepreneurship is both about women’s position in society and about the role of entrepreneurship in the same society. Each of these is a vast topic, and the latter particularly is a front burner subject for employers and their organizations around the world. The International Organization of Employers (IOE) in Geneva has produced an extensive body of work in this area. In fact, last spring at the U.N. in New York, I heard Jackie Coke-Lloyd speak eloquently on behalf of the IOE on the actions that governments must take — through economic policy measures and promoting the reform of laws, regulations, and other barriers to growth — to unleash entrepreneurship and create an enabling environment for employment creation.
Our subject this morning is a subset of these issues.
The first thing one learns in beginning to explore the world of women’s entrepreneurship is the magnitude and diversity of the phenomenon. Worldwide, women-owned businesses comprise between ¼ and 1/3 of businesses in the formal economy, and probably even more in the informal economy. Women-owned enterprises exist in all sectors of the economy and are of all sizes. The Body Shop, a U.K.-based multinational, is the product of women’s entrepreneurship. However, women are most heavily represented in small businesses, perhaps largely due to legal, social, and/or cultural factors.
These estimates are likely to be low: First, because available data does not always distinguish by gender, and secondly, because women are more likely to run businesses in the informal economy and to operate through domestic service and homework. Such activities by their very nature are less likely to be counted in official statistics.
Here are two examples from opposite ends of the development spectrum that speak to both magnitude and diversity of the subject:
— In the U.S., there were at last government count approximately 6.2 million women owned firms, employing 9.2 million people, generating $1.15 trillion in sales.
— In Zimbabwe, 97% of all businesses are micro (employing fewer than 5) and of these, 67% are run by women.
In the U.S., we are told by the U.S. Department of Labor, the issues of most importance to women entrepreneurs are access to capital, trade, affordable health care, taxes, access to government procurement, gaining media exposure, work-life balance, trends in technology, and retirement security.
Of course the specifics on such a list will vary enormously among countries with different levels of development, but I would venture to guess that to the extent that these concerns are fundamentally about accessing the capital and markets needed to grow a profitable and sustainable business, and about securing essential social protections, women entrepreneurs in many countries face the same issues. At first glance, the striking thing about these issues is that they are small business issues, not particularly women’s issues.
Indeed, there is a certain “so what” to everything I have said so far. After all, women comprise approximately half the human race. That their enterprises should be numerous and diverse, that they should have an impact on their economies, and that they share the problems of all small business owners could be considered obvious.
So why does the subject of women’s entrepreneurship deserve separate consideration? Indeed, why does it, as I will argue this morning, deserve separate and specific policy responses, both from governments and from organizations such as our own? The answer may be obvious to those of us in this room, but it bears articulating.
The OECD has concluded that the concerns and needs of women entrepreneurs are distinct and need to be studied separately for two reasons:
— Women’s entrepreneurship constitutes an important untapped source of economic growth, and
— The topic has been largely neglected. Mainstream research, polices and programs often do not take into account the specific needs of women entrepreneurs and potential entrepreneurs.
These points are obviously interconnected and they are worth considering in turn.
The Secretary General of the OECD observed recently that “half the brainpower on earth is in the hands of women,” and it only makes economic sense to harness it. Let’s leave aside the question of whether the SG has wildly underestimated. The point is that countries that do not capitalize on the full potential of one-half of their society are grossly misallocating their human resources and compromising their ability to compete in the global economy.
A recent lead article in The Economist put it this way: “Forget China, India, and the Internet. Economic growth is driven by women.” The article goes on to observe that an increase in female employment, in both the developed and developing world, has arguably been the biggest engine of global growth in recent decades.
There is more. There is clear evidence that enabling women to develop their skills and qualifications and to join the labor market boosts incomes and well being throughout the society in question. In particular – as those in this room well know, given Jamaica’s enviable record in education – educating girls boosts prosperity. Not only are better-educated women more productive, they raise healthier, better-educated children. Putting more resources in the hands of women has a multiplier effect, raising the welfare of the entire family.
Yet, despite their gains and despite these demonstrable impacts, women remain perhaps the world’s most underutilized resource. In short, not only is equal opportunity in the area of economic empowerment not a reality. Its absence is a drag on growth, development and poverty alleviation.
Which brings us to the second point: what are the gender specific entrepreneurship issues and what are appropriate policy responses? And here I beg your indulgence once again as I state what may be obvious to us, but what often needs to be better reflected in our programs and policies.
Many differences occur because women’s life experiences contrast with those of men in terms of the education they receive, their involvement with their families, the social spaces they occupy and the circles in which they mix. As a result of these differences, women may lack the confidence, skills and resources to successfully start and run a business. There are a variety of reasons for this. Perhaps the most important is societal or cultural resistance to women in business. Others include women’s traditionally more significant role relative to men in balancing work and home responsibilities and also women’s overlapping productive and reproductive roles. Let me say a word about each of these
— Socio-cultural resistance to women in business
Such resistance may be well engrained in societies and the effects may begin from childhood. Limited or inadequate access to education may limit a women’s business potential, as may the notion that certain fields of endeavor are inappropriate or off-limits.
These negative attitudes towards women in business may have a number of potential consequences. Firstly, women may not consider business as a career option or lack the confidence to start up and run a business. Secondly, if a woman does start up a business these attitudes may impact on her choice of sector and her investment behavior. The evidence indicates women’s enterprises tend to be smaller both in terms of workers employed and in terms of the presence and value of fixed assets. Women’s enterprises also tend to be concentrated in low investment, less remunerative sub-sectors which build on traditional skills, while men tend to be concentrated in more dynamic sub-sectors. Lastly, women engaged in economic activities may not perceive themselves as “business women” and therefore not register their business, restricting access to business development services.
— Balancing home and work responsibilities
Women’s potential in business is often limited by their traditionally more significant role relative to men in balancing work and home responsibilities. The division of labor between men and women members of the household may reduce the amount of time, energy and concentration women have to expend on their business.
— Overlapping productive and reproductive roles of women
The overlapping of productive and reproductive roles influences women’s entrepreneurial behavior. This may have implications as to women’s choice of economic activity and investment behavior. Women may prefer businesses that maintain close links between the personal and business. Women may invest less in their business and more in their family than men.
These gender-specific constraints to entrepreneurship require specific policy responses. Frequently, however, business laws, policies and services do not adequately consider the needs of women entrepreneurs and sometimes further exacerbate gender-specific constraints to entrepreneurship.
Here is where we – JEF, USCIB, and IOE – come in. Our organizations exist to inform and advise governments and international bodies such as the ILO on appropriate policies, and to provide useful services to our business members.
Let’s take policies first. Laws that discriminate on the basis of sex – directly or indirectly – can be constraints to entrepreneurship. For example, in some countries women lack the legal status to establish a contract, represent themselves in legal cases and/or hold property in their own name. [I understand that here in Jamaica recent legislation on Property Rights of Spouses and on Maintenance has addressed such concerns] On the other hand, a legal framework that does not provide for the overlapping productive and reproductive roles of women may indirectly discriminate against women. Thus, we need to lobby for laws that increase the ability of women to participate in the labor force by ensuring equal treatment (and safety) in the workplace, but also those that address concerns such as the availability of affordable day care.
We need to encourage our governments to listen to the voices of women entrepreneurs, and to incorporate a women’s entrepreneurial dimension in the formation of all SME-related policies. And to do this effectively, they and the international organizations they support (such as OECD and ILO) need to improve the factual and analytic underpinnings of our understanding of the role of women entrepreneurs in the economy. The ILO, for example, has a program on Women’s Entrepreneurship Development and Gender Equality (WEDGE) within its Small Enterprise Development program. WEDGE seeks to develop a knowledge base on, innovative support services and products, and an advocacy voice for women entrepreneurs. This area deserves more engagement and support from both governments and the private sector.
Equally, it is important that the services that we employers’ organizations provide to our members consider the needs of both women and men entrepreneurs. For example, women entrepreneurs may require specific services to increase their business confidence and/or specific mechanisms for increasing their access to credit. Women’s entrepreneur networks (such as the one you are launching today) are major sources of knowledge and valuable tools for the development and promotion of women-owned businesses. Clearly, I am preaching to the converted here in Kingston.
Valuable networks can also be established internationally. I referred earlier to the extensive work done by IOE in Geneva on enabling environments for entrepreneurship. In preparing my remarks this morning I relied on an excellent IOE draft paper on “Promoting Women Entrepreneurs and Women-Owned Businesses Through Employers’ Organizations.” This compendium of case studies and practices from around the world is a rich resource of best practices and ideas, and I look forward to working with Jackie and our IOE colleagues to complete this work and ensure that it is widely disseminated.
Let me conclude with another quotation from the Economist:
“Despite the increased economic importance of women, they could become more important still. More of them could join the labor market and more could make full use of their skills and qualifications. This would provide a sounder base for long-term growth. It would help to finance rich countries’ welfare states as populations age and it would boost incomes in the developing world… There is a saying that women must do twice as well as men to be thought half as good. Luckily that is not so difficult.“
Thank you very much for your attention. I look forward to working with you both at home and in Geneva.