The question is no longer ‘should we’ support female entrepreneurship but ‘what are the best ways’ in which to do this?
Recently, a seminar sponsored by IFC/USAID entitled: Mapping Opportunities: Ranking or Binding brought together 3 new innovative tools: 2 indices and a diagnostic tool for assessing where the barriers lie for female entrepreneurs.
The first index presented was the Gender Global Entrepreneurship and Development Index (Gender- GEDI) created by The Global Entrepreneurship and Development Institute and sponsored by Dell computers. This composite index incorporates a global reach and focuses on a specific sub-segment of ‘high potential’ female entrepreneurs defined as female entrepreneurs that are ‘innovative, export-oriented and market expanding’. For each country, the Gender-GEDI combines individual measures (such as attitudes and characteristics of female entrepreneurs) with institutional measures (such as equal legal rights for women, business risk, women’s equal access to SME training programs) to come up with a final rank and score. It answers the question as to which countries are the most favorable for high potential female entrepreneurship development. In its inaugural 17 country study, the USA ranked in first place followed by Australia (2nd), Germany (3rd), France (4th) and Mexico in 5th place. At the low end, Uganda ranked in 17th place, India in 16th, Egypt in 15th and Brazil in 14th. Japan was ranked in 12th place surprisingly low for a highly developed OECD country, while Russia’s rank in 10th place was surprisingly high.
The second index presented was the WEVenturescope, developed for the Inter-American Development Bank (IDB) by the Economist Intelligence Unit (EIU). This composite index was also launched this year and focuses on the Latin American and Caribbean region. It addresses female entrepreneurship in the most broadest sense assessing both formal and informal entrepreneurs in 20 countries. Countries are ranked according to 5 categories based on 49 indicators and subindicators. The five categories used included business operating risk, entrepreneurial business environment, access to finance, capacity and skills and social services. Chile ranks in first place followed by Peru (2nd), Colombia (3rd), Mexico (4th) and Uruguay in 5th place. The lowest ranking countries included Jamaica (20th), Paraguay in 19th place and Venezuela and El Salvador tied for 17th place. In addition to its final report, WEVenturescope provides an interactive web-based index tool that allows for category weightings to be altered to achieve different rankings and scores.
The third tool was the Women’s Entrepreneurship Diagnostic (WED) developed by Anastasia Santos at USAID. The WED is based on the Hausman, Rodrik and Velasco (HRV) decisional framework and is used at the country level to hone in on the most binding constraint to female SME entrepreneurship development. As such it helps programs target the specific issues (such as access to capital, knowledge of lending, managing loans, bias of bank lending officers, etc.)that are most relevant within an identified barrier category (such as access to finance) that are the most critical to address for the greatest impact. In the case of Liberia, the WED identified cultural norms and human capital as the two most fundamental factors underlying constrained women’s entrepreneurship in Liberia. Differing social norms around gender and marital status were found to be a barrier as well as sexual harassment especially for women engaged in cross border trade. Though neither the Gender-GEDI nor WEVenturescope contain Liberia in the countries analyzed, the WED could be a useful extension following an initial index-based analysis. Whereas an index is useful in providing country comparative analysis and identifying the main strengths and weaknesses in a given country or region, a diagnostic tool like the WED can provide a deeper level of analysis as to the underlying causes.
Though different, all three approaches allow for the possibility to benchmark progress and change over time. Thus providing a much needed increased systematic and rigorous approach to female entrepreneurship development. However, they also point out the glaring data gaps and need for high quality representative data on female entrepreneurship.
Reblogged from www.rutaaidis.com