YourStory (YS) recently published a survey of women in tech entrepreneurship. The survey MakersIndiaWomeninTechReport-1603954154238.pdf (yourstory.com)) (is based on investments consummated between January 2018 and June 2020 and startups that have at least one woman co-founder.
The findings of the survey are not heartwarming to anyone who cares about women in entrepreneurship. About 5.8% or $ 1.69 billion of a total of $ US $ 29.4 billion of capital that was invested during the period was invested in 378 enterprises that had at least one woman co-founder. That tells us that women entrepreneurship in India has a long way to go.
For the incurable optimist, looking for favourable signs there are a few encouraging trends though in the story. Women entrepreneurship in technology appears to be going deeper into Tier II and Tier III towns in India. The numbers of women founded enterprises have increased from 26 during the 1990-2010 period to 75 in 2014 and 285 in 2020. Women seem to be active across high growth sectors such as fintech, ecommerce, edtech and healthtech.
Looking beyond technology startups led by women
One wishes the YS survey had looked beyond the usual, routinely cited factors impacting women entrepreneurship in India such as access to funding, networks and so on. The reason for the low activity level in women entrepreneurship must also lie in the low rate of women starting up. To address that problem one needs to look beyond the story of those who have already started up, as the YS survey does.
In research parlance one would say that the YS sample is biased in favour of those women who have already started up. It does not help us understand the challenges of those who might have aspired to startup, but not prevailed. Worse there would be an even larger number of women who did not even dare to dream, but who may well have, given more propitious circumstances.
For women to realise their full potential as entrepreneurs, the narrative in India has to go beyond that of unicorns, soonicorns and such other mythology inspired metaphors. As a Bain & Co report published in 2019 (https://www.bain.com/contentassets/dd3604b612d84aa48a0b120f0b589532/report_powering_the_economy_with_her_-_women_entrepreneurship_in-india.pdf) points out it is important to keep in mind that at around 15 million enterprises, women probably account for around 20% of all enterprises.
Heterogeneity in women entrepreneurship
The impressive sounding number above however masks many unflattering details that the report notes, such as how many of them are truly managed or controlled by women and the fact that a large number of them are single employee organisations. It also hides the wide variety of enterprises that make up these women led enterprises which Bain & Co categorise on the basis of whether they are rural or urban and their potential for scaling up.
Policy planners and those who are engaged with the entrepreneurial ecosystem need to be mindful of this huge heterogeneity in the women entrepreneurship phenomenon if they wish to harness the power of close to 400 million who are expected to join the work force by 2030. Further, it is this diversity among women led enterprises that also leads to the many socially beneficial outcomes of women entrepreneurship. Benefits such as the reduction in high fertility rates, better health and education outcomes for women that the International Monetary Fund points out to are a result of the smaller urban and rural enterprises, to draw on the Bain & Co classification, that form a part of the 15 million women led enterprises.
Entrepreneurship Policy: The need for different strokes
That brings me to a more general point about what I see as our current national thinking on entrepreneurship. We do not seem to realise that entrepreneurship is as much a social process as much it is an economic activity. Our approach to developing entrepreneurship has to be relevant to the social, economic and cultural context in which we are trying to grow and develop entrepreneurship.
Viewed in that manner, there are nearly as many such contexts in India as there are states and union territories, if not more. Entrepreneurship in the North East requires a different approach from the industrial policy that will stimulate growth in Uttar Pradesh, Punjab or Andhra Pradesh. The thrust on entrepreneurship in a state like Kerala has to take into account the fact that land is scarce, the environment is crying for protection and that literacy and education levels are higher than elsewhere in the country.
In much the same way women entrepreneurship is a collection of many heterogenous categories of entrepreneurs. The Bain report identifies six categories. It suggests different approaches to nurture each of them. The ‘one size fits all’ approach to growing unicorns as the unidimensional goal of entrepreneurial policy that is currently considered fashionable has to give way to a more pluralistic and inclusive set of policies for nurturing entrepreneurship among women in India. The women entrepreneurship page on the Startupindia website is probably a good place to start acknowledging this need for diversity in our approach.
Dr. G. Sabarinathan is Associate Professor, IIMB.