Index reveals countries’ progress in empowering women entrepreneurs
SAN JUAN – Women entrepreneurs appear to thrive better in more developed economies, findings from the second edition of the Mastercard Index of Women Entrepreneurs (MIWE) revealed. Compared with their peers in emerging markets, women business owners in developed ones are able to draw from a greater pool of enabling resources and opportunities, including access to capital, financial services and academic programs.
Overall, the index indicates that budding and established women entrepreneurs around the world continue to progress despite gender-related cultural biases “that can create significant roadblocks hindering them from advancing their businesses,” a release announcing the study reads.
The Index tracks the progress and achievement of women entrepreneurs and business owners across 57 markets spanning five geographic regions – Asia Pacific, Europe, Latin America, the Middle East and Africa, and North America.
“Women entrepreneurs have made remarkable strides as business owners around the world, even as they work to achieve their full potential. We believe that by drawing attention to their efforts, we can further support and empower women in their drive to run successful businesses and lead richer, more fulfilling lives,” Mastercard Chief Financial Officer Martina Hund-Mejean is quoted saying in the release.
Top 10 markets with the ‘strongest supporting conditions and opportunities for women to thrive as entrepreneurs’
- New Zealand – 74.2
- Sweden – 71.3
- Canada – 70.9
- United States – 70.8
- Singapore – 69.2
- Portugal – 69.1
- Australia – 68.9
- Belgium – 68.7
- Philippines – 68.0
- United Kingdom – 67.9
The index indicates developed markets with strong enabling conditions are not immune to cultural bias against female entrepreneurship. In New Zealand, results revealed that the society is less receptive toward female entrepreneurs. Despite these circumstances, women business owners in New Zealand have risen above the challenge, pulling their market to the top – and for the second year running.
The index also suggests that the opportunity for entrepreneurship is not necessarily aligned to the pace of a market’s economic development. Emerging economies such as Ghana (46.4 percent) – one of the index’s three newly added markets along with Malawi and Nigeria – Uganda (33.8 percent) and Vietnam (31.3 percent) were found to have higher women business ownership rates, compared with more developed ones. Women in these markets are deemed as necessity-driven entrepreneurs, spurred by a need for survival despite their lack of financial capital and access to enabling services.
Women business owners as a percentage of all business owners – Top 10 markets
- Ghana – 46.4%
- Russia – 34.6%
- Uganda – 33.8%
- New Zealand – 33.0%
- Australia – 32.1%
- Vietnam – 31.3%
- Poland – 30.3%
- Spain – 29.4%
- Romania -28.9%
- Portugal – 28.7%
“Ahead of International Women’s Day, we hope the study’s findings can serve as a timely reminder for governments and organizations to bolster support provided to budding and working women business owners across all areas, from greater financial inclusion and wider access to education,” Ann Cairns, Mastercard’s International Markets president, adds in the release.
Brazil, Colombia, Costa Rica and Mexico stand out in Latin America
A group of nine Latin American countries were the focus of this index. Although Costa Rica was one of the best performing markets in the global ranking by jumping from the 30th spot in 2017 to 20 in 2018, the results show that in Brazil, women are in a unique position, with the highest numbers in female participation in businesses (Women Business Ownership 27.2, 15th). This placed Brazil well above the trend line in the MIWE-Benchmark.
Even though their ranking in the index is average (61.1, 35th), Brazilian women take part in the entrepreneurship activity as much as their male counterparts, becoming one of the eight markets in which there is no gender gap in terms of entrepreneurship activity rate. The share of women corporate leaders is also high (39.6%, 8th), while working / technically prepared women are high up in the ranking at 53.8, 17th.
Colombia, meanwhile, reported a high improvement level in female participation numbers, improving their participation in the development of new businesses and within corporate structures. The country occupies a privileged second spot in women’s progress levels. With a score of 53.5, it is only second to the Philippines (65.9), surpassing leading markets like New Zealand, Australia, Sweden, Canada and the United States. This suggests that over half of managers and business leaders in Colombia are women.
Data from the International Labor Organization (ILO) reveal that Colombia is one of the three countries worldwide where there are more women than men in management positions (the others are Jamaica and Santa Lucia).
Although women’s participation in the work force in Colombia is higher than half (58% of all women in working age), a little more than 50% are hired as professionals and technical workers (54.3%, 14th). Compared to men, there are more women who invest in higher education (the gross enrollment ratio in female post-secondary education reaches 60.7% compared to 52.1% for men). Over the past 12 months, the corporate activity index for women increased from 18.5% to 24.7% (4th in 54 markets, Global Entrepreneurship Monitor 2016/17).
Finally, the index results show a decrease in the percentage of Mexico’s women business owners, which dropped from 20.6% in 2017 to 19.3% in 2018.
The total MIWE score continues to be similar, going from 59.1 to 60.2 points, which represents a global ranking improvement from 40 to 38, driven by the increase in the rate of female entrepreneurship activity: female/male ratio of 83.4 to 100.0.
Some findings revealed that if a gender parity was to be achieved between men and women in the economic activity, the gross domestic product in Mexico would increase 43% ($810 billion) in 2025. The results of the study conducted by the Cherie Blair Foundation, on Value for Women (VFW), showed that small and growing businesses (SGB) led by women in Mexico are more limited than those led by men, with lower economic potential. There are more informal female than male micro-businesses. In general: 29% of micro-businesses, 19% of small business, 6% of medium businesses and just 7% of large businesses are owned by women.
Key insights published:
- What do successful businesses survive on? A powerful combination of access to financial services and products; ease of doing business; strong support for SMEs and quality governance, as seen in New Zealand (74.2 points, 1st), Sweden (71.3, 2nd), Canada (70.9, 3rd), the United States (70.8, 4th) and Singapore (69.2, 5th), which took the top five spots on the Index.
- Entrepreneurship is seen as a ticket to opportunity for women, as shown in markets like Philippines (68.0, 9th), Botswana (66.5, 14th), Thailand (65.8, 15th), Poland (65.4, 19th) and Costa Rica (65.0, 20th). Although supporting conditions for entrepreneurs in these markets are not as conducive, they have a strong representation of female business leaders, professionals and technical workers, a vibrant local entrepreneurship landscape, and high regard for the status of successful entrepreneurs.
- Korea (53.2 to 57.2, 44th) tracked the biggest improvement in Index score, driven by a surge in entrepreneurial activities. The growth of the Korean female business landscape may have been fueled by positive perceptions of successful women executives and the set-up of a task force for gender parity.
- The progress of women entrepreneurs was held back by one or more obstacles in nearly all of the 57 economies covered. These obstacles are largely caused by perceptions of gender bias, which contribute to poor social and cultural acceptance, lack of self-belief and access to financial funding or venture capital.
- In fact, a lack of self-belief can be especially potent in deterring women from starting their own businesses. In markets like Belgium (25.5%, 22nd), Germany (25.3, 24th), and the United Kingdom (25.0, 27th) the percentage of female business ownership in the market is lower than expected, despite having efficient regulatory systems and high access to resources.
- However, a will always forges a way. In necessity-driven markets such as Indonesia (62.4, 30th), Ghana (61.5, 33rd), Brazil (61.1, 35th), Mexico (60.2, 38th), Uganda (57.6, 43rd) and Nigeria (56.4, 45th), women are as likely as men to engage in entrepreneurship. Such enterprises are likely to be in the informal sector, are less-technologically intensive, small in scale and assume the form of self-employment.
- Although markets in the Middle East and Africa region such as United Arab Emirates (49.5, 49th), Tunisia (45.2, 51st) and Saudi Arabia (39.3, 54th) may have tracked some of the lowest scores in the Index, they also report the highest average growth expectations among women at 37%. More than half of women entrepreneurs in the UAE and Tunisia expect to hire six or more employees in the next five years. Women in Saudi Arabia are more likely than men to have these ambitions to grow their businesses.
The full report is available here.
The index weighed the sum of three components: 1) Women’s Advancement Outcomes (degree of bias against women as workforce participants, political and business leaders, as well as the financial strength and entrepreneurial inclination of women), 2) Knowledge Assets and Financial Access (degree of access women have to basic financial services, advanced knowledge assets, and support for small and medium enterprises), and 3) Supporting Entrepreneurial Conditions (overall perceptions on the ease on conducting business locally, quality of local governance, women’s perception of safety levels and cultural perception of women’s household financial influence).
The index uses 12 indicators and 25 sub-indicators to look at how 57 economies across Asia Pacific, Middle East & Africa, North America, Latin America and Europe – representing 78.6 percent of the world’s female labor force – differ in terms of the level of the three components.