Watch Out for The Third Billion

Watch Out for The Third Billion

Zooming into Female Entrepreneurship

 

“The most notable fact our culture imprints on women is the sense of our limits. The most important thing one woman can do for another is to illuminate and expand her sense of actual possibilities.” Adrienne Rich

 

“The third billion” is an expression you might have not heard of until today, but that you should be aware of, as it will give plenty to talk about in the coming period. The third billion is a term used to describe the billion women, mostly from developing countries, who are planned to join the global economy as employees, employers or entrepreneurs throughout the next ten years.

 

Let’s talk numbers. According to the Global Entrepreneurship Monitor, there are 126 million women managing new businesses worldwide and another 98 million running established ones. Although this may sound impressive, women still face an enormous equality gap. In only seven countries around the globe Panama, Thailand, Ghana, Ecuador, Nigeria, Mexico and Uganda women participate in business at percentages equal to men’s. And in many other countries, women barely participate or do not participate at all. Besides that, even when women are business owners, they still lag far behind men. In the US, women own almost three in ten companies. Sadly, these companies employ just 6% of the country’s workforce and account for a mere 4% of business revenues.

 

In the case of Egypt and according to Egyptian Labor Force Survey statistics, in 2007 there were approximately 630,000 woman-owned micro and small enterprises (MSEs). Although this number is expected to have grown in the past years, it still shows the degree of gender inequality when it comes to business and entrepreneurship at a national level. If we compare the number of female-owned MSEs to that of male-owned MSEs the result is worrying. Of the total MSE in Egypt, women make up less than 17 percent. This means that men outnumber women by a ratio of over 5 to 1. For every 5 male-owned companies, there is only 1 female-owned. The average ratio in the majority of countries around the world is more or less to 2 to 1.

 

In theory and in practice, Egyptian women are not seeing their potential fulfilled. And there are several reasons for this clear disadvantage. If we look at a survey on the MSE sector carried out in 2003 by the Economic Research Forum we can see that, compared to male-owned MSEs in Egypt, women’s businesses are launched with a significantly lower capital. As well, female-owned businesses in Egypt are more likely to have just one worker, less likely to export to other countries and more likely to be located in the informal sector. Moreover, female-owned businesses in Egypt have less access to resources; whether it is technical training, entrepreneurial education or business development services.  In addition to this, as long as Egyptian women have a lower average level of education than men and as a result a higher illiteracy rate, things will hardly change.

I am an entrepreneur myself. From my own experience, I can see that entrepreneurs generally start businesses to ride the wave of an opportunity given to them. Entrepreneurs rarely start businesses out of necessity. And here, self-confidence and support play an essential role. In general, in Egypt and worldwide, men are more positive about their own capabilities. In the US, where there is available data, nearly two-thirds of men think they have the ability to start a business, but less than half of women think they do. 

 

These numbers belong to a country where women have similar levels of education than men. So I assume that in Egypt, the gap is much more significant, starting from the fact that many Egyptian women still don’t have access to banking systems. And many times, they cannot obtain loans without permission from a male relative such as their father, husband or brother. In order to take the step of starting their own business, women feel encouraged if they are independent and supported by their family and environment. 

 

One of the most telling pieces of information on this regard is that in emerging markets, women reinvest 90 cents of every dollar of their income in “human resources”. That means their families’ education, health, nutrition. This compared to 30 cents of every dollar for men. Investing in female-owned enterprises is an actual investment in our future as a society.

 

Furthermore, women who decide to take the step and found their businesses, clearly inspire other women to pursue their own dreams. The more women take this step, the easier it will be to create an environment where women can balance work and family; a taboo in the traditional corporate world. And the more women in the workforce, the better the global economy, and so on.

 

Egyptian women should have equal access to markets, same access to capital and an equal level of legal protection. We cannot deny these are big challenges ahead for women to overcome.

 

Women entrepreneurship is a real force that is reshaping the world as we know it. We cannot disregard “the third billion” yet to come, which could significantly improve global and local economy. Egyptian women cannot miss the chance to join this trend. Let’s all be active participants of this incorporation.

 

 

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