The motivations that drive women to pursue entrepreneurial aspirations vary as widely as the businesses they operate.
For Rina Akter, after her husband left her, the struggle to balance her care responsibilities for her family with her work and the instability of her income as a domestic labourer pushed her to start her own small tailoring business on the outskirts of Dhaka, Bangladesh.
“I came to the decision that if I start my own business, I’ll be able to take care of my two girls,” she explains.
Also, the primary breadwinner for her family, for Ou Sokphanna, who lost her leg to a mining explosion in 2003, her decision to start her homegrown handicraft business was motivated by widespread discrimination and limited employment opportunities in her home of Siem Reap province, Cambodia. “Starting my own business was a good option for me. I no longer face discrimination, I’m able to support my family and I’ve grown in confidence,” she says.
Business owners like Rina and Sokphanna, who are driven to initiate business ventures in the absence of decent employment opportunities and to support the welfare and survival of themselves and their families, initiate their businesses largely from a place of necessity.
Meanwhile, hailing from across the border in neighbouring Viet Nam, Tran Khanh Dung, founder and CEO of tech start-up, Rayo, was in a position to identify an opportunity for innovation at scale and to seize it, motivated to start her business to make web browsing more accessible for persons with disabilities.
“There are no existing solutions that effectively tackle the issue of web accessibility at scale, so our team decided to step up and solve the problem,” she explains.
Similarly identifying an opportunity to fill a market gap while tackling a social issue, Shristi Shrestha founded eco-friendly sanitary pad company, Abu Dhakka, inspired by a vision of supporting women and protecting the environment while promoting localised production in her home country.
According to Shristi, “making sanitary pads in Nepal is something new. Our main objective is for everyone to use biodegradable sanitary pads.”
Acknowledging the heterogeneity of entrepreneurship, there is growing recognition of the distinction between opportunity-driven and necessity-driven entrepreneurs, and the complex push and pull factors that drive individuals to start a business.
Necessity entrepreneurs are more likely to remain at the micro level and are predominantly concentrated in low value-added retail and services businesses within the informal sector.
When successful, they are more likely to invest income in livelihood diversification, as opposed to growing their business. In contrast, opportunity entrepreneurs tend to prioritize expansion and scalability in more growth-oriented sectors.
Evidence shows that in most countries, women entrepreneurs are more likely to start businesses out of necessity compared with their male counterparts.
In Asia, most women-led businesses are initiated out of necessity, which continues to be the main driver of women’s entrepreneurship in India, Bangladesh, and Nepal, although changes in this dynamic are emerging in rapidly developing economies in the region such as Malaysia, Viet Nam, Thailand, and China.
Opportunity-driven women start-up founders are likely to encounter challenges such as limited access to start-up capital and networks, market entry barriers and regulatory obstacles, which are compounded by the entrenched societal norms that drive the gender disparity in entrepreneurship as a whole.
The challenges faced by women in necessity entrepreneurship are more likely to be related to deficits in decent employment opportunities, lack of access to social protection, indebtedness and low levels of financial inclusion and resilience.
As such, a one-size-fits-all approach to entrepreneurial support is unlikely to be effective. Necessity entrepreneurs often require support mechanisms that address immediate income needs and financial exclusion, with engagement from community leaders and grassroots organizations.
Meanwhile opportunity entrepreneurs benefit more from resources that foster business growth, innovation and market expansion, alongside efforts to connect investors with women founders, tackle gender bias and address the negligible proportion of venture capital invested in women-founded start-ups.
Barriers to accessing finance, however, are prevalent for women-led business of all sizes. Globally, women-led micro, small and medium enterprises face a finance gap, estimated at US $1.7 trillion, and an estimated 70 per cent of women-owned MSMEs are either financially underserved or unserved.
Across the board, increased investment in women-led enterprises holds immense (and largely untapped) potential to drive inclusive economic growth throughout the region, while contributing to advancements in women’s rights.
From the case of a tech start up founder driving innovation for an inclusive online world, to a tailoring proprietor working towards a brighter future for her children, a champion of eco-friendly sanitary solutions, or a homebased artisan defying discrimination to support her family, the value of promoting women’s full and equal participation in the economy is clear.
Through ESCAP’s work on entrepreneurship, in partnership with Global Affairs Canada, since 2018, 111 million in capital has been unlocked for women led and women owned businesses, and 226,383 women entrepreneurs, including Rina, Sokphana, Dung and Shristi, have been supported with access to finance and skills to grow their businesses.
Christina Margaret Morrison is a Consultant, Trade, Investment and Innovation Division (Catalyzing Women’s Entrepreneurship Project) and Elena Mayer-Besting is a Programme Management Officer, Trade, Investment and Innovation.
(Courtesy: ESCAP)
