Asia is referred to as the powerhouse of growth in the modern-day global economy. In the last few years, the continent has witnessed a robust economic growth, driven by market-focused economic reforms favoring entrepreneurship. With an increasingly significant role of women in the current political and socio-economic scenario and higher regard for and legitimacy of them pursuing business activities, there has been an exponential growth in the number of female entrepreneurs.
Female entrepreneurship is progressively being regarded as one of the key drivers of economic growth and sustainable development, along with women’s economic empowerment.
The Growth Story
Over the past few years, Asia Pacific has been witnessing a rapid bridging of the gap in gender disparities amid economic opportunities, with a contribution amount of $4.5 trillion projected to supplement its gross domestic growth by 2025. This signifies the phenomenal growth that has recently been observed in female entrepreneurship, with more and more women pursuing their careers in this direction. For instance, small and medium enterprises (SMEs) hold a high significance in Asia. More than 95 percent of all firms in all sectors belong to SMEs on average per country, providing livelihood to over 90 percent of each country’s workforce.
With such rapid growth, the continent is gradually paving its way towards achieving one of the cornerstones of the 2030 Agenda for Sustainable Development—that is, women’s economic empowerment. Furthermore, women have been breaking the myth about being good only in the verticals of designing, fashion, handicraft, and kitchen industries by creating ripples in almost all industries. For example in India, there are approximately 8 million women who have ventured on their own entrepreneurial journey, establishing a sturdy ground for themselves amid the massive count of 126 million worldwide.
While a phenomenal growth has been witnessed over the past few years, there are some key challenges constraining female entrepreneurship from sustenance and further expansion in Asia. By effectively addressing the need-gaps and all the demographic, social, economic, political, and legal constraints along with leveraging all the opportunities, the prospects for growth and prosperity amid female entrepreneurship in Asia are endless.
Women in Asia can still not completely exercise their rights to decent work and productive employment, with as much as 23 percent gender gap in labor-force participation in certain regions. Moreover, they have limited or no access to quality education and skill development, financial resources or social capital, when compared to their male contemporaries. These barriers are further supplemented by persistent and discriminatory social and cultural norms.
In developing countries, where economic growth is still at its initial stages, women are more likely to remain underrepresented in the manufacturing sector and are pushed more towards agriculture and services. There is limited access to markets and segments, depending upon not just a female’s education but also her family situation and state of the economy. While a rise in the establishment and operating of MSMEs has been observed of late, women face issues such as limited access to technology, finance, formal credit and networks, lesser options for mobility and physical access, insufficient business know-how, and subsequently a lower confidence level, when compared with their male counterparts. Women tend to not have traditional forms of collateral like land, house, cash, and other such assets to their name in most of these countries, and this leads to disadvantages when seeking a loan or a lack of formal credit and thereby, limited financial avenues to venture into entrepreneurship.
Furthermore, there are several legal and regulatory barriers across the continent that impede a woman’s ability to start businesses. Even where laws guarantee equal rights, conventional social norms that are discriminatory in nature may prevent women from enjoying their entrepreneurial rights. World Bank’s research, “The World Development Report 2015: Mind, Society, and Behaviour”, which emphasized on how an “unconscious bias” may also affect people’s decisions regarding female entrepreneurship.
These key challenges need to be addressed in order to bring about a transformative change in the significance and development of female entrepreneurship.
Opportunities for Future Entrepreneurial Endeavours
In order to combat the challenges faced and leverage opportunities in the female entrepreneurial segment, businesses, governments, and civil societies in Asia need to ensure better education and technical know-how, and support and influence a comprehensive development of women. There have been several key developments across the continent in this regard, which have reflected in development indices. For instance, according to Mastercard Index of Women Entrepreneurs, Singapore, and the Philippines are among the top 10 markets with the strongest supporting conditions and the best opportunities for women to thrive as entrepreneurs. Moreover, Vietnam is among the top 10 markets, with the highest percentage of women business owners. Korea has also been observed to have the biggest improvement in the index score, driven by a surge in entrepreneurial practices and a positive growth of the female business landscape. Even in India, it has been observed that about 58 percent of women entrepreneurs have started their business between the ages of 20 to 30, with about 25 percent of them starting a business even before they turned 25.
While a lot of these developing countries deem women in the market as necessity-driven entrepreneurs impelled by a need for survival, how women across Asia have progressively been marking their strong presence amid the pool of entrepreneurs cannot be denied. Therefore, fostering female entrepreneurship will therefore not just empower women, but will also impact all lives around by making the continent politically cohesive, socially responsible, and economically integrated on a holistic level.
Asia has a vast, dynamic, and highly impactful potential driver of development that remains largely untapped—the women. Therefore, by effectively addressing all the challenges through deeper government involvement, strengthening of regional cooperation, easier access to advanced connectivity and resources, financial cooperation, and better market integration, the continent can effectively deliver on the 2030 Agenda for Sustainable Development. And subsequently, these solutions will progressively help shape the prosperous future of female entrepreneurship in Asia.