The Gender GEDI Index: An Invitation for Further Discussion

On January 24, 2014, Vital Voices Global Partnership hosted Dr. Ruta Aidis, Assistant Director of the Center for Entrepreneurship and Public Policy (CEPP) and Senior Fellow at the School of Public Policy at George Mason University, for a presentation on and discussion of GEDI’s women’s entrepreneurship index—the Gender GEDI Index. Representatives from several organizations involved in women’s finance and women’s entrepreneurship were present for the event.

Although we know that no two countries have the same situation when it comes to development, it’s always useful to have some sort of visualization of where countries rank in relation to one another. It’s a great way to dive deeper in to the factors behind these rankings. The Gender GEDI Index is a tool to both help visualize and spur further study of nations that have favorable environments for high-potential female entrepreneurs.

The Gender GEDI Index uses data sourced from institutions including the World Bank, the International Labor Organization, and others, in an attempt to capture the convergence of factors that provide the environment for “high-potential female entrepreneurial development” on a global scale. The existing data sets were used to rank 17 countries against 3 sub-indices of 15 indicators each. The 17 countries that had adequate data for analysis in the study were: Australia, Brazil, China, Egypt, France, Germany, India, Japan, Malaysia, Morocco, Russia, South Africa, Turkey, Uganda, United Kingdom and the United States.

The analysis points to the factors that hinder female entrepreneurship, focusing on three sub-indices: Entrepreneurial Environment, Entrepreneurial Eco-System, and Entrepreneurial Aspirations. Although the United States ranks first on the Gender GEDI Index, it received a score of 76 out of 100—or a C+ grade. At the opposite end of the spectrum, Uganda had the lowest rank, with a score of 32. The Index shows that even highest-scoring countries are still far from “ideal.” The three sub-indices are all interconnected, and no country has been successful across the board.

Dr. Aidis noted that the Index is an evolving tool. Currently, the creators have used an interesting definition of a “productive” enterprise. Whether or not a business is “lucrative” is an important omission, since many illegal/exploitative businesses are “lucrative.” Rather, “productive” refers to those start-ups that create jobs and increase wealth. An additional layer in the Index is the focus specifically on high-potential female entrepreneurs, as opposed to those women who own informal businesses. Businesses with high potential, according to the definition used in the Index, include those that are innovative, export-oriented, and market-expanding. In other words, these businesses have the potential to spur job growth and have a positive impact on the national economy.

The key findings of the study are as follows:

• There is no single determinant for an environment conducive to high-potential female entrepreneurship. The top ranking countries blend together factors of the three sub-indices (entrepreneurial environment, entrepreneurial ecosystem, and entrepreneurial aspirations) in varying amounts.
• Addressing the female start-up education gap should be a priority for many countries. Higher education provides the necessary skills to grow businesses and broaden networks.
• The process for moving a business from the informal to the formal sector—a precondition for successful, scalable enterprises—is weak in many countries. Access to formal financing is critical.
• Social norms are a frequently hidden barrier. In many countries, it’s not seen as an asset to be a woman in business, let alone a business owner.
• Better data is needed.

As Dr. Aidis put it, the Index is not exhaustive and is meant to be a starting point, an invitation for discussion and further in-depth analysis. It is intended to be a catalyst for improving conditions for and changing mindsets towards high-potential female entrepreneurs.

With that in mind, here are some important questions we should further explore in order to move the discussion forward:

• How do we use and build-upon this tool to strengthen the case for high-potential female entrepreneurship development goals?
• How do we equate female entrepreneurship with a country’s economic success as a whole, thereby making the case that improving the environment for high-potential female entrepreneurs is worthwhile?
• Can we use this Index to target country-specific (and region-specific) initiatives to foster the conditions for high-potential female entrepreneurship in developing nations?
• Can we find reliable data sets to rank all developing nations in order to better inform our programming?