Women’s Leadership for Enterprise: Differences in Productivity and Earnings Presented By: Salma Khan Chairperson, NGO Coalition for Beijing PFA Also Former Chairperson, UN CEDAW Committee Division Chief, Planning Commission, GOB Director General, Bangladesh Institute of Management
Dramatic Improvement in Women’s Lives During Last 25 Years Unprecedented gains in rights, education, health and employment. Women have become agents of change in many societies. More countries than ever guarantee women equal rights to property, marriage and in other domain. Political participation of women have increased
Shift in Development Approach Ratification of CEDAW (186 countries) and adoptation of Beijing Platform for Action (nearly by all countries) helped establishing critical link between gender equality and development. Demand for empowering women as economic, political and social actors to change policy choices and make institutions more gender responsive.
Advances in Female Labor Force Participation Labor force participation significantly increased among young women. Rate of growth of female labor participation in most countries higher then men. Gender gap in labor force participation rate is declining (Global Gender Gap Repot-2010) Women now makeup 40% of global labor force and 43% of farmers. Between 1980-2009 global rate of female labor force participation rose to 51.8%. Due to tradition of unpaid female labor engaged in informal works, male labor force participation in South Asia is comparatively low.
Role of Women-owned MSMEs in Economic Development MSMEs play critical role in poverty alleviation and job creation in developing countries. Goldman Sach research finds that- as one woman’s business prosper, so does her family and community. African women-owned/run MSMEs show great prosperity in food security of the world. SMEs are recognized as engine of growth generating employment and job opportunities both in developing and developed countries .
Continue…. Proportion of SMEs in ASEAN Economies Country Proportion Indonesia 99.8% Thailand 99.7% China 99.2% Vietnam 96.8% Proportion of MSMEs in SAARC Economies Country Proportion India 90% Pakistan 90% Bangladesh N/A
Average Annual Growth Rate of Male/Female SMEs in Selected Countries Country Female Male Indonesia (2007) 8.1% 0.27% Malaysia (2008) 9.7% 7.43% Philippines (2009) 4.2% N/A Singapore (2009) 4.2% N/A Thailand (2008) 2.3% 0.31% Vietnam (2008) 42.5% 40.33% Source: Access to Finance for women-owned SMEs in Developing Countries 2011, IFC, World Bank
Feminization of SMEs in Agricultural Sector Globally 43% farmers are women. Women are producing even more food. In agricultural sector- which is largely informal, women face more discrimination. Women mostly do not own land, have little access to agricultural credit and technology.
Enterprise Leadership, Productivity and Income Differentials on the Basis of Gender Women’s organizations productivity and income is lower compared to men-run organizations. Leadership implies being control of one’s life and activities- This independence is often denied to women. Productivity and income is a function of size and choosing better options where role of leadership is critical. Women are reluctant to choose option for increasing productivity as they have an attitude of risk aversion.
Less Presence of Women in Boardroom of Enterprises Though women have gained ground in the SME sector, only a few women are in the leadership. Except in micro enterprises, women have limited role in leadership. Few women on Board of Directors or CEOs. Higher representation of women in Country Ratio countries where women’s presence Norway 40% Required is mandatory leading to higher by law Sweden 21% productivity and growth. Japan 2% Not In Bangladesh out of 43 Banks, 44 required Korea 2% women on board compared to by law 471 male.
Major Barriers to Women’s Leadership for Enterprise a) Cultural Practice Leadership involves a process of social influence which is often based on patriarchal power model. Typical masculine behaviour of management is expected by workers. Burden of traditional gender roles- women bear the brunt of housework, men do market work b) Access to Finance Women mostly do not own lands or other family assets. Can not offer collateral against loan. High risk and operational cost for Bank.
Continue…. c ) Legal and Regulatory Constraints Women prefer to operate in a more transparent business environment. Ease of doing business matter more to women entrepreneur. Lacks information on legal and financial regulations and market incentives. d) Lack of Market Interaction and Networking Lack of mobility- social and occupational segregation. Due to motherhood and domestic burden women are reluctant to join trade unions and professionals bodies. Employees prefer engaged male workers compared to unengaged female workers. e) Lower Education and Technical skill Increase in brain requirement and decrease in brawn requirement over past two decades .
Recommendations a) National income account system must be changed to reflect women’s unremunerated works. b) Adding value to women’s unpaid work will make women’s contribution to GDP visible, which will help to change social perception on women’s contribution in the economy and role in leadership. c) Attention should be paid to law enforcement and improve business environment and ease of doing business. d) Affirmative policy should be introduced to create more access to women to training and skill development. e) Discriminatory laws of inheritance and women’s access to land and family assets must be reformed.
Continue… Special entrepreneurship programmes to transform women’s f) lives should be developed Examples of Latin America, through IFC developed Belcorp Project- provided loan, training and management skill to 1 million women beauty consultant to start business) Examples of Grameen Bank and BRAC ultra poor projects in Bangladesh g) More opportunities for women entrepreneur should be created in SMEs in Service sector which have the greatest potential in job creation and growth.
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