Dell 2014 Gender-GEDI Research Shows More Support Needed to Enable Female Entrepreneurship Development Worldwide
Cross-posted from Dell.com. Press Release - 6/2/2014.
On June 2, 2014, Dell announced the results of the second annual Gender-Global Entrepreneurship and Development Index (GEDI), revealing that more than 75 percent of countries surveyed are not meeting the most fundamental conditions required for female entrepreneurs to prosper.
Commissioned by Dell, the Gender-GEDI is the world’s only diagnostic tool that comprehensively measures high potential female entrepreneurship by analyzing entrepreneurial ecosystems, business environments and individual aspirations across 30 developed and developing economies spanning multiple regions, providing a systematic approach that allows cross-country comparison, benchmarking, and identifies data gaps. The goal of the research is not to provide a headcount of female entrepreneurs worldwide, rather it is future-oriented and designed to be a tool to guide leaders, policymakers, and law-makers in identifying country-wide strengths and weaknesses and developing strategies to create more favorable conditions in their countries to enable businesses founded by women to thrive.
“At Dell, we are committed to empowering people everywhere with technology solutions to fulfill their ambitions and reach their full potential,” said Karen Quintos, senior vice president and chief marketing officer, Dell. “The Gender-GEDI Index provides key insights designed to help countries advance female entrepreneurship and ultimately bolster the global economy. We believe awareness of the current landscape for women entrepreneurship is the first step toward change.”
To inform and refine the research parameters of the Gender-GEDI, an expert panel was convened, comprised of leading change agents from the U.S. Department of State and global organizations such as the International Finance Corporation (IFC), World Bank, Development Alternatives Incorporated (DAI), Vital Voices, and WEConnect International, many of whom have already began using the research as a tool to inform policy and institute reform (examples available).
2014 Gender-GEDI Results
Among the 17 countries included in both the 2013 and 2014 Gender-GEDI reports, four increased their rankings (Japan, Brazil, India, and United Kingdom), four showed a decline (Malaysia, Egypt, Mexico, and Morocco), and the others ranked comparatively both years.
The highest performing countries in the 2014 Gender-GEDI rankings are all OECD member countries with highly developed economies, and for the second year in a row, the U.S. (83) and Australia (80) came out on top, followed by Sweden (73), France and Germany (tied at 67), Chile (55), the United Kingdom (54) and Poland (51). The remaining 23 of the 30 countries studied received an overall index score of less than 50 out of 100, indicating that many of the fundamental conditions for high potential female entrepreneurship development are generally lacking in the majority of countries.
“To harness the full potential of the low performing countries, the Gender-GEDI results demonstrate that basic improvements are required in terms of access to equal legal rights and education as well as acceptance of women’s social and economic empowerment,” said Ruta Aidis, project director for the Gender-GEDI. “For countries with moderate scores, to improve their rankings, they should focus both on current women’s enterprise development interventions and support as well as basic improvements in the business-enabling environment.”
The 2014 Gender-GEDI demonstrates that top-performing countries are not necessarily the ones with the highest GDP levels; rather they are those who have committed to improving the conditions for female entrepreneurship on several fronts simultaneously, and even those with the highest scores still have room for improvement. While these countries tend to have good business-enabling environments overall, they could benefit from supporting programs designed to activate and accelerate the growth of high-potential female entrepreneurs.
To provide tangible examples on how women entrepreneurs can overcome challenges and maximize the opportunities flagged in the study, Dell commissioned an e-book, Forget the Glass Ceiling: Build Your Business Without One, featuring case studies of 10 women entrepreneurs, which is available for download starting today on Dell.com/women.
The Gender-GEDI is focused on the ways in which governments, institutions and corporations can support the effort of improving conditions for high-potential female entrepreneurship worldwide, and the 2014 results indicate that, across all nations, there is still much to be done, but by increasing access to education, technology, capital and networks, significant progress can be made.
- Access to capital continues to be crucial. Access to a formal bank account is critical for entrepreneurs, especially since it is a necessary precursor to the financing (bank loans, credit lines, etc.) that fuels business growth. However, in 14 of the 30 countries, 50 percent or more of the female population is unbanked, with the gender disparities being highest in Turkey, where there is close to a 50 percent difference between men and women with bank accounts. Worldwide, women also receive less outside funding for their businesses than men.
- Many industries remain male-dominated. Occupation crowding, or the existence of ‘male’ and ‘female’ jobs in a country’s economy, not only contributes to the gender wage gap but also results in the concentration of women’s entrepreneurial activity within specific sectors, which can be detrimental to fully utilizing a nation’s capacity for innovation. Out of the 30 countries, only eight received an overall balanced ratio across employment sectors, and in India and Pakistan, formal employment is so highly sex-segregated that no employment sectors are balanced. Some countries and industries are beginning to address these occupational inequalities through voluntary quotas and targeted initiatives in the sectors that tend to marginalize women as a result of their ‘macho lab coat, hard hat, and geek’ workplace cultures.
- Female start-up activity is on the rise in emerging markets. Despite being ranked as top performers and characterized by overall favorable business environments, opportunity perception is fairly low in the United States and Europe with less than one-third of the female population measured identifying business opportunities. In Africa, this number reaches 69 percent. Even with challenges around access to education and capital, female startup activity in the region is high at 86 female to every 100 male startups. Ghana has more female startups than male at a rate of 121 to 100. The Latin American and Caribbean countries included in the Index also exhibit high rates, with a regional average of 84 female to every 100 male startups.
- More women are needed at the top. Even when the business environment is right, social norms can affect general societal support for women as entrepreneurs and their access to experiences as decision-makers and leaders. Local attitudes towards women in executive positions can also affect whether women choose to take on these higher roles and responsibilities. Only five countries have 40 percent or more female managers (Jamaica, Ghana, Panama, United States and Nigeria), and in four countries the percentage of women is 10 percent or less: South Korea (10 percent), Turkey (10 percent), Japan (9 percent) and Pakistan (3 percent). While education forms the foundation for high potential entrepreneurship, management experience provides women with additional skills, experience, and networks that facilitate female entrepreneurship success.
- Women’s rights must be addressed first. In 22 of the 30 countries included in the Index, married women have fewer rights than married men, in 21 countries women lack the same access to employment as men, and in eight countries women do not enjoy the same legal access to property as men. A number of countries also limit women’s access to public spaces through legal restrictions and discriminatory practices. In order to foster female entrepreneurship, these countries must first address these fundamental weaknesses and take steps towards ensuring women equal rights.
About Dell Gender-GEDI Index
The 2014 Gender GEDI Index is sponsored by Dell and includes 30 countries: Australia, Bangladesh, Brazil, Chile, China, Egypt, France, Germany, Ghana, India, Jamaica, Japan, South Korea, Malaysia, Mexico, Morocco, Nigeria, Panama, Pakistan, Peru, Poland, Russia, South Africa, Spain, Sweden, Thailand, Turkey, Uganda, United Kingdom and the United States.
The Index focuses on high potential female entrepreneurs who are defined as ‘innovative, market-expanding and export-oriented.’ The Index combines variables that measure agency and institutions in a composite index in order to capture the multi-dimensional aspects of female entrepreneurship development. Data comes from existing internationally recognized sources such as the Global Entrepreneurship Monitor (GEM), World Economic Forum (WEF), World Bank, United Nations Educational, Scientific and Cultural Organization (UNESCO), International Labour Organization (ILO), etc. The GEDI Institute is a non-profit research and consulting firm based in Washington, D.C. that assists governments, donor agencies, foundations, international assistance providers, and global companies expand economic opportunities for individuals, build future markets for societies, and propel economic development for nations. It uses an innovative methodology to advance entrepreneurship, thereby accelerating economic growth.
The Gender GEDI Index's unique methodology brings together variables that measure individuals and institutions in a composite index that highlights issues relevant for high potential female entrepreneurship development and growth. Thirty individual-level and institutional-level dimensions are paired together into fifteen pillars that are further divided into three main sub-indices: Entrepreneurial Environment, Entrepreneurial Eco-System and Entrepreneurial Aspirations. The novel Penalty for Bottleneck methodology is applied to the pillar scores so that the ‘bottleneck’ (i.e. pillar with the lowest score) penalizes the final country ranking. This approach encourages countries to address their weakest areas first since it will have the greatest effect on their final score.
Dell Inc. listens to customers and delivers innovative technology and services that give them the power to do more. As the visionary outcome of a true entrepreneur, Dell is committed to help power the success of entrepreneurs by developing technology solutions that help their businesses increase productivity and grow. Through the Dell Women’s Entrepreneur Network, Dell supports and nurtures a community of female entrepreneurs by providing access to knowledge, networks, and capital. Learn more at www.dell.com/women.