A new study underscores the importance of promoting female entrepreneurship as a means to enhance women’s participation in the workforce, which in turn can drive significant economic growth. Despite forming nearly half the global population, women own less than a fifth of businesses, according to a World Bank survey spanning 138 countries from 2006 to 2018. These female-owned businesses, however, offer substantial employment opportunities for other women compared to male-owned firms.
In India, female labour participation and entrepreneurship remain notably low. Although women account for about 14% of entrepreneurs, most operate microenterprises and single-person ventures. This contributes to women making up just 17% of India’s GDP—a figure significantly lower than the global average.
A government think tank reports that while some women-owned businesses employ large numbers of staff, the majority operate with very few. Studies recommend that promoting female entrepreneurship could significantly boost women’s workforce participation. Female-led businesses often create more opportunities for women, leading to economic gains through higher wages, profits, and more efficient female-owned firms replacing less productive male-owned ones.
Promoting female entrepreneurs
However, substantial barriers remain, such as limited access to childcare and safe, efficient transportation, which restrict women’s ability to work. Policies aimed at removing these barriers are crucial.
Promoting entrepreneurship and increasing labour demand can yield quicker results than attempting to change long-standing social norms, which are often resistant to change. Ashwini Deshpande of Ashoka University emphasizes the need to increase women’s participation in regular salaried work with job contracts and social security benefits for substantial economic empowerment. The research highlights that many women face resistance from families and communities when attempting to join the workforce or start businesses.
Additionally, if women join the workforce but job opportunities remain limited, it could lead to wage suppression rather than economic growth. Thus, addressing the barriers hindering female entrepreneurship is essential to translating increased female labour force participation into meaningful economic progress. In conclusion, fostering female entrepreneurship presents a viable pathway to boosting women’s participation in the workforce and driving economic growth.
Concerted policy efforts to remove existing barriers can help unlock the full potential of female entrepreneurs and, by extension, contribute substantially to the economy.
