What is preventing Indian women from being entrepreneurs?

Introduction

Over the last decade, the Indian economy has expanded steadily, and the number of startups and new companies in the country has risen in lockstep. The vast majority of them were founded by men. While many Indian women aspire to be entrepreneurs, they also find it more difficult to succeed. In reality, India has been identified as one of a group of countries where female entrepreneurs (as well as female leaders and professionals) face less favorable conditions, pronounced cultural biases, and a lack of business resources such as finances, capital, training, and growth.

The aim of this issue brief is to provide a concise overview of the situation of Indian women entrepreneurs. To that end, it collects data on the percentage of Indian women who start companies, as well as the sectors and states in which they operate. It investigates the root causes of Indian women's failure to achieve and makes recommendations for promoting women's entrepreneurial empowerment.

A look at the statistics for women entrepreneurs in India

Some women have high entrepreneurial aspirations on a personal level. Interestingly, many interview participants said that male role models such as Bill Gates or Steve Jobs motivated them, or that their male friends who are entrepreneurs introduced them to the "startup world." On a more systemic level, the government has initiated a number of initiatives to boost women's entrepreneurial motivations, and there is a stronger political will to encourage them.

However, looking beyond lofty personal and political ambitions to the figures on how many women currently own companies reveals a sobering balance. The data from the Sixth Economic Census, which was conducted between January 2013 and April 2014, is frequently cited in the literature on the subject. Women owned 8.05 million of the 58.5 million companies counted by the census, or 13.76 percent of the total number of entrepreneurs in India. Meanwhile, according to the World Bank Enterprise Survey, the number of companies with female involvement in ownership was 10.7% in 2014.

The low rates of female entrepreneurship are expressed in India's poor ranking of 52nd out of 57 countries surveyed in the Index of Women Entrepreneurs. The fact that few women own businesses is part of a broader trend of women's under-engagement in the workplace. This is linked to a low female labor force participation rate and less resources for women to become business owners, technicians, and skilled employees. Despite high economic growth rates and a rise in the proportion of working-age women in the population, female labor force participation has declined from 35% in 2005 to 26% in 2018.

It's no surprise, then, that India's gender gap is especially pronounced in the indicator category "economic participation and opportunity," where the country is ranked 142nd out of 149 countries in the World Economic Forum's Gender Gap Study. India is ranked 108th overall, taking into account three additional indicator categories. Women are held back by unequal schooling, and it is no surprise that states with higher literacy rates often have more female entrepreneurs. Tamil Nadu, Kerala, Andhra Pradesh, West Bengal, and Maharashtra are the top five states with the highest number of female entrepreneurs.

To be sure, India is a diverse country, and the types of entrepreneurship that women participate in are equally diverse. Microfinance has aided women's empowerment and entrepreneurship, with 98 percent of women-owned companies being micro-enterprises, and nearly 90% of them operating in the informal sector. Women entrepreneurs are often involved in social areas and sectors such as wellness, clean energy and zero waste, education, women's grooming, apparel, cosmetics, food and nutrition, garments and textiles, and services, according to interview partners (such as management and human resources).

Low female entrepreneurship rates have a variety of causes:

Starting a company is a daunting task for everyone, regardless of gender. The lack of understanding of consumers, entering the market, recruiting trained staff, and the dynamic regulatory climate are all major challenges for startups in India. However, there are additional obstacles for women entrepreneurs, which are part of a larger and more pronounced gender disparity in the male-dominated Indian society.

Unconscious gender bias

Some of the female founders interviewed by this author, who were in their early stages of their careers, said they had not faced gender discrimination. Although they faced a variety of business challenges, they do not believe it was due to their gender. They viewed themselves as hardworking individuals who believed that the best ideas would win out, and that the brightest and most committed entrepreneurs would succeed. Senior women entrepreneurs, on the other hand, who had a lot more experience, were disillusioned and characterized becoming a woman founder as difficult. While it's likely that the younger entrepreneurs had not (yet) faced prejudice because of their gender, the disparity in attitudes may also reflect a lack of knowledge of subtle bias, which is often more harmful than outright discrimination. Unconscious gender bias is characterized as "unintentional and automatic mental associations based on gender, arising from traditions, norms, beliefs, history, and/or experience," and it has been identified as a major impediment to women's advancement.

Business skills

Stereotypes such as "business is not a woman's world" and "men are more competent in financial matters" are perpetuated by often repeated stereotypes. As a result of these views, women entrepreneurs are often viewed with less regard and experience doubt when dealing with business partners. One interview partner (19.03.2019, Mumbai), who co-founded a startup with her husband, shared how people always referred to them as a "founding" couple, saying things like "he is earning, you are supporting." It's more difficult for women to cultivate a business attitude when they have to deal with such negative reviews.As a result, it's not shocking that women are sometimes less confident in their own business abilities. In reality, highly successful women often experience self-doubt and underestimate their abilities and results, while men experience the opposite. Furthermore, it has been discovered that men almost universally believe they are far smarter than women, despite the fact that arrogance and overconfidence are inversely linked to leadership ability.

Women’s access to finance

Though entrepreneurship is inherently risky, women are often stereotyped as being less willing to take chances. For example, one of India's most successful women entrepreneurs, Kiran Mazumdar-Shaw, encountered a high level of scepticism against women entrepreneurs and was regarded as a "high-risk" investment candidate by potential funders for her biotechnology business, Biocon. As one interview partner noted, stereotypes tend to manifest in behaviour, as less women aggressively approach investors and are more hesitant to divest stakes (22.03.2019, Bangalore).When women do approach investors, however, they are treated differently than men, and investors have been found to favour pitches delivered by men over pitches delivered by women, despite the fact that the content is similar. The fact that Indian women rarely own land that can be used as collateral for loans adds to the difficulties in obtaining financing. Furthermore, although 79 percent of women-owned businesses are self-funded, families are often reluctant to financially support their daughters' entrepreneurial endeavours.

Family support for Women

The other side of the “business is a man's domain” coin is that societal expectations require women to take care of their homes first and foremost. In reality, many Indian women take on more responsibilities at home and spend five times as much time on housework, household care, and other unpaid activities as men. Family help is considered a key success factor for Indian female entrepreneurs because balancing both home and business can be difficult. The women interviewed said that their families "had a modern perspective" or that they "understood her passion" and that "I was fortunate" – implying that supportive families are not the standard.

Child responsibilities

Although some people think of entrepreneurship as a challenging occupation to balance with family obligations, as one interview partner (22.03.2019, Bangalore) pointed out, it may be a good opportunity for women, enabling them to work with more flexible hours and space. When women entrepreneurs become mothers, however, they also face additional challenges that hold them back. They are not eligible for maternity benefits, on the one hand. On the other hand, when women return to work, they need assistance, and some female entrepreneurs live with or near their grandparents, who can care for their children. Many that are less fortunate, on the other hand, face a shortage of child-care choices.

Workplace and public space protection

Finally, in India, workplace safety, as well as safety during commutes between the office and home, is a concern. Delhi, in particular — one of India's four global startup cities — continues to be famously bad at ensuring women's safety, with high rates of sexual crimes. Women should quit the workplace early, according to interview partners, since public spaces are considered dangerous after a certain time in the evening. Furthermore, women's perceptions of danger perpetuate social expectations that limit their mobility and, as a result, their economic participation and rights.

Conclusion

Women's entrepreneurial potential can be fully realized, resulting in increased creativity, economic growth, and job creation. This brief has outlined the current situation in India and identified the factors that contribute to the country's low female entrepreneurship rate. Overcoming these obstacles requires individual women's grit and enthusiasm, as well as addressing systemic influences in the external world over which they have little influence. As a result, this article offers five sets of suggestions to assist women in seizing entrepreneurial resources and increasing their chances of success.

To begin with, the low rates of female entrepreneurship are part of a larger gender disparity in economic participation and opportunity. As a result, fair access to education is critical, as is encouraging women to use their newly learned skills by entering the workforce. More women in senior and leadership roles are required, and policies that encourage them to do so will help them gain expertise and skills, allowing them to start their own businesses.

Second, there needs to be a greater understanding of implicit prejudices and how they damage women entrepreneurs. However, since changing people's minds takes time, women entrepreneurs must cope with negative views by being aware of their own prejudices and seeking ways to mitigate it, as one interview partner (29.03.2019, Bangalore) put it. Furthermore, new role models have emerged, demonstrating that “cracking via conformity” is possible. Sharing their success stories on social and conventional media gives younger female