Who benefits from women’s economic empowerment? Everyone, it turns out. Expanding work and education opportunities for women and girls spurs economic progress, expands markets, and improves health, well-being, and financial outcomes for women as well as their families, communities, and entire countries.
Worldwide, women represent the largest emerging market. For example:
- If women reached parity with men in labor markets, as much as $28 trillion could be added to the global GDP by 2025.
- Among Fortune 500 companies, those with the greatest representation of women in management positions delivered a total return to shareholders that was 34% higher than for companies with the lowest female representation.
- In the U.S., startup companies founded and cofounded by women generate 78 cents for every dollar invested, while male-founded startups generate only 31 cents.
Despite this potential, women are underutilized in the global workforce, underpaid for their work, and underrepresented as business owners, executives, entrepreneurs, employees, business partners, and even as customers.
These factors contribute to the link between women and poverty: worldwide, women are more likely than men to live in poverty.
At Miller Center for Social Entrepreneurship, we have accelerated more than 1,000 social enterprises in more than 100 countries. Based on this wealth of experience, we believe that social entrepreneurship is a potent tool for boosting women’s economic empowerment and thus helping to eliminate poverty in our lifetime.
Too often, however, the focus is on women as founders or leaders of social enterprises. While this aspect of social entrepreneurship is important, it overlooks the multidimensional possibilities that social enterprises offer for women.
Four Dimensions of Women’s Economic Empowerment
We see four ways that social entrepreneurship can help empower women economically: as leaders, as employees, as value chain participants, and as customers.
Let’s take a look at some challenges women face in each of these dimensions and how social enterprises can help address them.
Lacking sufficient data about women social entrepreneurs, we refer to the broader venture capital ecosystem to examine the obstacles facing women leaders. Although female-founded startups have a consistent history of higher returns and faster exits than male-led startups, women-led companies average less than half the investment of male entrepreneurs.
Many questions arise around this discrepancy. What are the causes of the investment glass ceiling for women? Why do venture capitalists make 2.6 times greater equity investments in male-led startups—even post-acceleration? And how to explain that while women-led enterprises lag in equity investments, they are equally likely to raise debt investments?
Of course, some notable exceptions hint at what’s possible. In India, Kinara Capital, under the leadership of founder and CEO Hardika Shah, has achieved impressive results. The company provides loans to small- to mid-size manufacturing companies that lack the collateral and land needed to secure traditional loans—but which need capital to sustain and grow their businesses, so they can create more jobs. Kinara provides quickly dispersed, flexible loans that help build local economies.
Kinara Capital’s success has earned accolades. The company was ranked 64 out of 500 top high-growth companies in Asia-Pacific by The Financial Times and received the 2019 Gold award as Bank of the Year-Asia from the IFC, World Bank, and SME Finance Forum. And Kinara Capital’s female leadership doesn’t stop with the CEO, either: CIO Jijy Oomme was named an Analytics Icon in the CIO Power List 2019.
High-quality jobs offer the best pathway out of poverty. But put simply, women are more likely than men to hold low-quality jobs—doing low-paid work in the informal sector, often working in unhealthy conditions, and performing unpaid tasks ranging from fetching firewood and water in developing countries to providing uncompensated care for children, the elderly, and the sick.
On the other hand, women consistently spend more of their incremental income on their households than men do, which means providing women with good-paying jobs can help elevate whole communities. Social enterprises create high-quality jobs in general and are more likely to offer employment opportunities for women, especially in developing regions.
In Nicaragua, more than 80% of the full-time staff of Vega Coffee are women—and women are also well represented in associated aspects of the company’s business. For example, women farmers are responsible for up to 70% of the labor in coffee production.
Value Chain Suppliers
The supply chain typically refers to the source of parts, components, raw materials, and associated services needed to make or manufacture goods. In social enterprises, we refer to the broader value chain, which includes both suppliers and distributors of goods and services.
In many cases, especially for last-mile distribution of products and services to end users, social enterprises train and use non-employee sales agents, often women who live in the communities they serve.
One of the most well-known social enterprises using this business model is Solar Sister, which provides women with economic opportunity, training, technology, and support to distribute clean energy products to underserved communities in Tanzania and northern Nigeria. Solar Sister uses a network of Solar Sister Entrepreneurs (SSEs) to sell solar-powered lanterns to end customers in their communities. Solar Sister not only enables women to earn income as product distributors, the social enterprise also provides the women SSEs with management support, career development resources, and enhanced autonomy.
Hundreds of millions of women worldwide live in poverty and lack access to basic services, including healthcare. Larger societal and environmental trends—from patriarchal laws that prevent women from owning land or handling money, to climate change and the COVID-19 pandemic—disproportionately affect women.
For social enterprises, however, these challenges present a huge opportunity to create new business models. For instance, a number of social enterprises—including Lwala Community Alliance in Kenya, KoeKoe Tech in Myanmar, and CareNX and AYZH in India—are enabling local women to gain access to healthcare, including during pregnancy and as new mothers. By providing pre- and post-natal information and support to women and their children, these enterprises are working to reduce maternal and child mortality rates, which remain unacceptably high—and largely preventable—in many low-resource settings worldwide.
Given that the ultimate goal of our work is to end global poverty, we believe that the best way to achieve that goal is to bolster women’s economic empowerment. Further, we strongly advocate using social entrepreneurship to empower women not only as business leaders and board members, but also as employees, as key links in the value chain, and as customers.
Paying attention to these four ways to empower women economically can create a rising tide that lifts all boats, moving toward a future where poverty is a distant memory.