Op-Ed: Female entrepreneurs: The key to sustained global economic growth
Investing in female entrepreneurs is not just about checking off a box on gender equality. It is about facilitating significant global economic gains by investing in an underserved and underrepresented talent pool.
Women’s participation in the global economy is fundamental to sustained economic growth, and men need to lend more support — and capital — to achieve this future. This is particularly apparent in many emerging markets, where the economic empowerment of women remains a concept, rather than a reality.
The only thing harder than being an entrepreneur is being a female entrepreneur. Despite all the blood, sweat and tears that founders pour into their start-ups, statistics indicate that female entrepreneurs still start their companies with 50% less capital than their male counterparts.
This needs to change, not only because gender parity is essential, but because what’s good for female entrepreneurs is good for the global economy.
A recent Boston Consulting Group report shows women control about $39.6 trillion (about 30%) of the world’s wealth, and by 2020, they have the potential to control over $72 trillion globally.
This trend depicts a clear picture: The appetite and justification is there for women to gain more financial and economic power. We just need to mirror that change within the small- and medium-enterprise sector by encouraging business leaders to capitalize on the potential of female entrepreneurs around the world.
For many women in business, the future remains grim. Although women continue to lead the way in launching start-ups, those in the United States receive only about 7% of venture capital funding, 5% of federal contracts and 5% of conventional loans. This pattern is indicative of a much larger global issue: Female entrepreneurs are marginalized.
If we deny women the opportunity to fulfill their economic potential — meaning we exclude half the world’s population — the global economy will continue to suffer. It is vital to foster supportive ecosystems that embrace and capitalize on the economic potential of women. Both men and women are essential to cultivating this environment.
Men for women entrepreneurs
Mara Foundation, a pan-African social enterprise set up to support young and ambitious entrepreneurs in Africa, was born out of my own experience of starting a business at age 15.
Over the years, we have made great strides in developing the next generation of entrepreneurs and business leaders.
Because I was fortunate enough to have strong female role models in my life (my mother and two sisters), I am acutely aware of the positive impact women can have on communities. Consequently, Mara Women, a subset of the Mara Foundation, aims to provide advocacy and mentorship to female entrepreneurs on the African continent.
Since 2014, the Mara Foundation has partnered with U.N. Women to support strong female role models, believing that when women hold leadership roles in organizations, they can make significant contributions to economic growth and pave a path for the next generation of female leaders and mentors.
The Mara Foundation also has launched a mentorship platform, Mara Mentor, that seeks to facilitate relationships between entrepreneurs and business leaders.
Integrating these two platforms assists entrepreneurs globally in connecting with leaders from many fields, including policymakers, investors and social change-makers. Female entrepreneurs now have a virtual home where they are able to convene and develop the tools to overcome the challenges of gender inequality.
Female leaders investing in female entrepreneurs
In addition to men’s support, female entrepreneurs need the guidance of other female leaders.
One of the major reasons female entrepreneurs receive significantly less funding from male-led ventures is because of bias. Most venture capitalists are men, and because of approachability and commonalities, they find it easier to invest in other men.
The simple way to rectify this issue is by encouraging women to position themselves on the funding side of the equation.
However, to increase the number of female investors, those women must mentor the next generation. By increasing the visibility of women in leadership positions, other women can be inspired to take bold steps toward sustaining meaningful change within the private and public sectors.
The advice and support that mentors provide budding entrepreneurs is invaluable.
For instance, Randi Zuckerberg, founder and CEO of Zuckerberg Media and editor-in-chief of Dot Complicated, is one of the original Mara Mentors and is acutely aware of the power of mentorship. “If you are a woman, help foster the talents of other women so that eventually those barriers will be so broken, they no longer exist,” she says.
Mobilizing strong female role models is critical to ensuring we establish a new generation of female entrepreneurs.
Future impact of female entrepreneurs
We all have a responsibility to support female entrepreneurs — whether it’s through advocating for gender equality in the workplace, or using our own purchasing power to support female-owned businesses. What is beneficial to female entrepreneurs is beneficial to the global economy.
As Margaret Thatcher once said, “If you want anything said, ask a man; if you want anything done, ask a woman.”
Ashish J. Thakkar is chairman of the U.N. Foundation Global Entrepreneurs Council and founder of Mara Group and Mara Foundation, a social enterprise set up to support young entrepreneurs in Africa. He is the author of “The Lion Awakes: Adventures in Africa’s Economic Miracle.”
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