APEC 2011: Unleashing Women Entrepreneurship in Asia
September 14, 2011
At the Asia-Pacific Economic Cooperation (APEC) forum taking place in San Francisco this week, the powerful role women entrepreneurs play across the globe in driving economic growth and job creation is high on the agenda. Recognizing this growing role, particularly for micro, small, and medium enterprises (MSMEs), I joined leading economists, experts, government officials, and women entrepreneurs from around the world today for a dedicated all-day discussion on specific constraints women face when starting or developing a business. The stakes are high as these businesses are a major driver of economic growth and jobs – topics on everyone’s mind.
This high-profile international event has brought together participants from very different cultural, social, and economic backgrounds as diverse as Japan, Vietnam, China, Indonesia, Malaysia, Thailand, and Singapore, to Peru, Chile, Australia, and the United States to share what they all have in common: the determination to reach their full potential as SME owners or managers and the feeling that this potential is still too often restricted by social, cultural, financial, legal, or administrative constraints across APEC economies.
In Asia, MSMEs are widely recognized as the engine of economic growth, generating employment and job opportunities in both rural and urban areas, and helping to alleviate poverty. In his paper on women entrepreneurship in Asia’s developing countries, Tulus Tambunan uses figures from the Secretariat of the Association of Southeast Asian Nations (ASEAN) to evaluate the proportion of small and medium enterprises (SMEs) with regard to the overall population of enterprises in selected Asian developing countries. The percentages range between 90 percent in Pakistan and India, to more than 99 percent in the APEC economies of Indonesia (99.9%), Thailand (99.8%), China (99.7%), and Malaysia (99.2%). Vietnam is a bit “behind,” with 96.8 percent of its enterprises being considered as SMEs. Whether they are entrepreneurs forced to work in an SME due to lack of other options, or entrepreneurs by choice, driven by the desire to succeed and to develop their businesses, women represent a growing portion of these SME owners.
All MSMEs owners (formal and informal, men and women) face a myriad of constraints, both internal (low technical, management, accounting knowledge) and external constraints linked to their environments (restricted access to credit, lack of market information, burdensome regulations, administrative procedures), but research and anecdotal evidence indicate that women are comparatively more often affected by these constraints than men and with higher intensity. Last year, the 2010 APEC Women’s Entrepreneurship Summit (WES) in Japan recognized that women-owned SMEs are often impacted differently by domestic barriers to doing business and face gender-specific obstacles that prevent them from capitalizing on the growth opportunities that should otherwise be available from increased trade in the region.
Apart from sociological and cultural barriers that often deny women the right to start their own businesses, women are often affected by unfriendly business environments. Even when the legal and administrative environment is not openly unequal, and policies not “officially” gender biased, informal constraints – such as how rules and regulations are implemented, difficulty accessing information, or the way women are considered, or not considered, by potential partners, buyers, officials, or bankers can be real impediments to their development and thus to the development of the whole economy. These challenges often work as a glass ceiling that affect women’s ability to start and grow their businesses.
Although such constraints vary from country to country, on top of social, cultural, and religious obstacles, women business owners typically suffer from low levels of education and limited access to training, which implies less understanding of technology and lower capacity to adapt to changing markets needed to be competitive. Women that we’ve met in various meetings facilitated by The Asia Foundation or by our partners often complain about the difficulty they encounter in accessing basic information on their legal, fiscal, and business environments, leaving them in a situation of uncertainty and increased vulnerability. Women-owned businesses also regularly lack access to land and property, restricting their capacity to access capital and credit and thus their capacity to seize business opportunities. As many women generally lack exposure to national and international markets, exacerbated in some countries by limited mobility, low personal security, and high risk of sexual harassment, they are too often unable to develop marketing opportunities for their products or to engage in valuable business partnerships.
Improved, more gender-balanced business environments are essential for economies to benefit from the full potential of women as entrepreneurs. The World Bank’s 2010 report, “Economic Opportunities for Women in East Asia and the Pacific,” shows that in economies where it is easier to do business, there are more women entrepreneurs and higher levels of women in the workforce. Constraints that hurt women’s economic potential need to be addressed by governments, civil society, and by the business women themselves. To play this role, women entrepreneurs need the chance to raise their voice in order to fully engage in the policy-making process that shapes business environments.
For both men and women, access to information is one pillar to achieving such free entrepreneurship. Women, as well as men, will be more apt to seize business opportunities and become more competitive if they operate in a more transparent business environment and have more open access to information regarding their regulatory, legal, financial, market, or technological environment. Moreover, additional research is needed to better understand women entrepreneurs’ business environments and how a gender-sensitive approach in business environments can improve the efficiency of structural and regulatory reforms. Increased knowledge of the factors affecting access to trade and growth of women-owned SMEs in APEC developing economies would help governments take actions and tap into this reservoir of growth.
Yet, access to information is often more difficult for women because they are generally less involved in social interaction and less likely than men to be members of business associations, Chamber of Commerce, or other types of networks. Most business associations in Asia have few women members, and rarely have women represented at the leadership level. By increasing their participation in such places where business issues are discussed, women entrepreneurs could increase their knowledge of the business environment, connect with potential clients or partners, develop their bargaining power, and raise their visibility as full economic actors.
Lack of participation of business women in professional associations and social networks also means that their specific needs and demands are rarely taken into account in the lobbying and policy-making process. Most business women have no access to policymakers, executive bodies, or the bureaucracy. If they want to have a chance to raise their concerns and help shape a business environment that will be more responsive to their needs, women entrepreneurs have to be more engaged in policy advocacy, through women business associations but also by becoming more influential in the mainstream policy process. Through a series of Public-Private Dialogues, where local entrepreneurs discuss business constraints with local and national authorities, The Asia Foundation has expanded opportunities for women entrepreneurs to raise their concerns. In Bangladesh, for example, a group of business women participating in a meeting with other business men and high-level public officials, took this opportunity to bring their difficulties in accessing credit to the attention of the mayor. Strengthened with this political support, they were then able to negotiate simplified procedures, lower interest rates, and improved access to credit with banks. A few months later, more than 14 women had received loans to develop their business.
The focus on women entrepreneurs at APEC this week is a much welcomed recognition by the member economies of the key role women play in promoting APEC’s own objectives of raising living standards through increased trade and sustainable economic growth and fostering a sense of community among Asia-Pacific countries.
Véronique Salze-Lozac’h is The Asia Foundation’s director for Economic Development Programs. She can be reached at VSalze-Lozach@asiafound.org. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation.
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