Bridging the Gaps to Accelerate Women’s Entrepreneurship

- Parnika Jhunjhunwala is Entrepreneurship & Acceleration Associate at UNDP India

June 21, 2023

Inclusive innovation and entrepreneurship with the active participation of women are crucial to achieving the Sustainable Development Goals (SDGs) and the 2030 Agenda. Women entrepreneurs are critical in creating employment opportunities, enhancing human capital investments, fostering development outcomes for entire communities, and strengthening local entrepreneurship ecosystems

However, despite the growth of women's entrepreneurship worldwide, women-led businesses have been severely affected by the COVID-19 pandemic, and post-pandemic recovery has been slow. Even in India, the world's third-largest entrepreneurial ecosystem, which has witnessed increased government support and initiatives, only 20% of enterprises are women-owned. 

To address this gender gap and bring more women entrepreneurs to the forefront, specific actions are needed.

Firstly, adopting a gendered lens in understanding and strengthening entrepreneurial ecosystems is crucial. It is important to recognize that women entrepreneurs face challenges beyond individual-level factors, such as limited access to education, mobility, and technical and soft skills. 

Entrepreneurial ecosystems consist of various components: access to finance, human capital, markets, enabling policies, institutional and infrastructural support, and a conducive culture. Each of these components requires the participation of different actors, including government, academic and research institutions, the private sector, investors, incubators and accelerators, development agencies, and civil society organizations.[1]

Owing to the social, cultural, and ideological barriers for women, the conditions that support men and women entrepreneurs might not be the same, and women are affected by a higher number of ecosystem components, such as barriers to entry, government policy, the culture of entrepreneurship, legal infrastructure, etc. in contrast to men. 

Therefore, it is necessary to have a gendered perspective in addressing the structural and cultural factors that affect women entrepreneurs at both the institutional and individual levels. For example, this includes adopting a gender lens to investing and policy-making or building safe physical and institutional infrastructure that improves women's economic participation, essentially mainstreaming gender across each ecosystem component to ensure it addresses the unique needs of women entrepreneurs. 

Another persistent barrier for women entrepreneurs is unequal access to finance, exacerbated by the underrepresentation of women in senior investment roles. In India, less than 1% of active angel investors are women and only 7% of investing partners at the top 100 venture firms are women. This imbalance, coupled with stereotypes that women-founded start-ups are riskier investments, hinders women entrepreneurs' ability to raise funds. In 2021-22, less than 1% of all institutional investments in India went to women-run businesses. 

To bridge this funding gap, increased engagement from investors is crucial. Establishing networks and platforms facilitating interactions between women entrepreneurs and investors can be a starting point. Initiatives such as the "Investor Consortium" by UNDP, UN Women, and the Women Entrepreneurship Platform of NITI Aayog have enabled women entrepreneurs to pitch their ventures and establish lasting networks with investors, with 77% of the women entrepreneurs engaging in follow-up conversations with investors for funding and mentoring opportunities. Additionally, as post-programme support, mentors continued to facilitate connections and follow-ups with investors for the entrepreneurs, tapping into investor networks beyond the consortium. Eighty one percent entrepreneurs strongly agreed that the pitching sessions were extremely useful. 

UNDP has also partnered with the private sector and academic organizations – ReNew and the Foundation for Innovation Technology and Transfer (IIT-D) for accelerator programs like "Women Climate Champions" to pitch their climate solutions and receive investments.

Despite a rise in women entrepreneurs, the stereotypical image of an entrepreneur is ordinarily male. Many women often internalize the notion of not being suitable for entrepreneurial roles, mainly fuelled by societal expectations, lower levels of self-confidence, and fear of failure. While shifting cultural mindsets is a long battle, showcasing successful women entrepreneurs as role models and providing training on soft entrepreneurial skills and leadership can boost women's confidence and create a supportive space for them.

UNDP has worked in this direction through initiatives like projects like Code Unnati and PRAGATI. The former offers mentoring programmes, leadership coaching, and psychological and emotional support through mentors called “Unnati Sakhis," who help women entrepreneurs overcome stereotypes and start their businesses. A total of 8,300 women were reached through this programme, including 300 women entrepreneurs who could initiate their businesses. In an internal assessment conducted by UNDP, 50% of the women surveyed indicated that the psycho-social support provided by Unnati Sakhis was instrumental in sustaining their enterprises, and 47% felt improved agency in business-related decision-making.  

Women are the present and future, and to help them lead from the front, India's G20 Presidency offers an opportunity for the country to spearhead a collaborative global effort focused on women's entrepreneurship. The country can shape the global discourse on women's entrepreneurship and address common challenges entrepreneurs face worldwide. We can achieve women-led development through partnerships and collaborations, generating sustainable and impactful solutions at scale.

[1] Refer to the Isenberg Model of Entrepreneurial Ecosystems in “The Big Idea: How to Start an Entrepreneurial Revolution” (2010); or the eight critical components that make up an entrepreneurial ecosystem as modeled by the World Economic Forum in “Entrepreneurial Ecosystems Around the Globe and Company Growth Dynamics," (2013).