In brief
By increasing support for female-led businesses, India could significantly improve its GDP growth while promoting gender equality in the workplace, as research suggests that empowering women entrepreneurs creates more opportunities for women overall.
In a male-dominated economic scenario, women entrepreneurs could be the key to unlocking India's full economic potential. A recent analysis has revealed that the power of female-led businesses can not only uplift women’s workforce participation but also boost the country’s GDP. Despite representing half of the population, women in India own less than 17% of businesses, which is alarming compared to the global average.A comprehensive study carried out across 138 countries indicates that female business ownership plays a vital role in empowering other women. Research shows that females employed in female-owned firms are significantly higher compared to their male-owned counterparts. For example, only 23% of workers in male-led enterprises are women, while over 50% of those in female-led businesses are women, showcasing the potential of women entrepreneurs to create supportive work environments.In the Indian context, the disheartening truth is that female labour participation operates under significant limitations. According to the State of India's Livelihoods Report 2023, women comprise about 14% of entrepreneurs, mainly engaged in micro, small, and medium enterprises (MSMEs). A majority of these ventures are microenterprises or single-person businesses, which results in lower overall economic contributions, as women's share of the GDP hovers around 17%.Gaurav Chiplunkar from the University of Virginia, along with his co-author Pinelopi Goldberg from Yale University, has developed a framework to identify the obstacles faced by women in both the workforce and entrepreneurial endeavors. Their findings reveal that dismantling these barriers can lead to increased female-owned businesses, enhanced workforce participation, and overall economic growth through elevated wages and productivity.Key barriers include inadequate access to childcare and limited transportation options, which severely limit women's ability to engage in formal work environments. Even as women show a slight increase in labor participation, the progress is often misleading – it often reflects self-employment rather than formal, sustainable job opportunities.Experts argue that it is crucial to champion policies aimed at supporting female entrepreneurship. By focusing on creating conducive conditions for women to thrive in business and thus expanding the demand for female labor, a dual benefit emerges – enhancing social equity and fostering economic resilience. Research indicates that as women engage in entrepreneurial activities when opportunities are available, a lack of such openings results in a decline in participation. Barclays Research forecasts that achieving 8% GDP growth by 2030 is feasible if women constitute over half of the new workforce. In conclusion, focusing on boosting female entrepreneurship could be a transformative strategy for India. Acknowledging and addressing the fundamental barriers that women face in the workplace can directly lead towards a more equitable, prosperous future for all.
