Statement by the ITC Executive Director at the Norwegian Institute for International Affairs (NUPI)
29 January 2015, Oslo, Norway.
Ladies and Gentlemen,
It is a pleasure to be here today to deliver this lecture on “female entrepreneurs in trade and development”. I thank the Director of the Norwegian Institute for Foreign Affairs, Ulf Sverdrup, for inviting me, Mr Arne Melchiar for organising the seminar, and to you all for coming today.
It is great to see the recognition that the Institute is giving to the critical role that women play in all facets of society and the incredible potential which is there to increase the contribution that women and girls can have on the global and national economic of countries.
Just two weeks ago, the Institute held a lecture which highlighted the contributions that women can make to rebuilding worn-torn societies. Today I will focus on how women’s economic empowerment is crucial for ensuring global prosperity and stability. I look forward to a fruitful debate.
For those of you who are not too familiar with the work of my organisation, let me start with a few words of introduction. The International Trade Centre is a joint agency of the United Nations and the WTO. In essence, our mandate is to assist small and medium-sized enterprises (SMEs) in developing countries to internationalise and trade successfully across national borders. We do this by working with policy makers to improve the business environment; with institutions like trade and investment promotion agencies to improve the quality of support they offer to entrepreneurs; and with the private sector to boost their productivity and competitiveness. Last year, we celebrated our 50th anniversary of empowering developing country entrepreneurs through trade-related information and technical assistance.
I will begin my presentation by looking at ongoing developments that promise to change the discourse on women’s economic empowerment for the better. Next, I will discuss the empirical evidence on policies to foster gender equality. Finally, I will talk about how ITC works to empower women through entrepreneurship.
2015 is a momentous year for the global agenda on women’s economic empowerment. This year marks the 20th anniversary of the UN’s Beijing Declaration and Platform for Action (Beijing + 20) – the defining policy framework and blueprint for advancing gender equality and women’s rights. With the Millennium Development Goals (MDGs) set to be replaced in September by the UN General Assembly’s adoption of a post-2015 development agenda, the year offers us a once-in-a-generation opportunity to place gender equality and women’s economic empowerment at the forefront of global economic development policy.
Doing so would represent an important change: according to a recent UN Secretary General’s report, only 2% of global aid for economic development explicitly targets gender equality. This year, we can finally address this staggering imbalance.
The window of opportunity on the international policy front coincides with growing recognition of the untapped productive potential that women represent. The last few years have seen a sea change in the way that business view women’s participation in the world of work. Most of us have heard about how the billion-plus populations of both China and India are transforming the global economy. But how many of you have heard of ‘the third billion’ poised to make at least as great of an economic contribution as these two countries?
This third billion is, in a sense, the private sector equivalent of the Beijing Declaration. It refers to projections that over one billion women around the world could enter the economic mainstream as producers, consumers, employees and entrepreneurs during the next decade. It is helping to mobilise huge investments by leading corporations from Goldman Sachs to Coca Cola to Google into initiatives that promote women’s economic empowerment.
This is significant. These are women whose economic lives have previously been stunted and even suppressed. Now, they stand on the verge of breaking out of subsistence economic activities and moving into more productive work ranging from agro-processing and manufacturing to healthcare; from media and information and communication technology to hospitality.
Even more exciting is that in just five years – by 2020 – around 870 million of these women could already be making more meaningful contributions to global economic prosperity. And the vast majority of these women – 822 million – will come from emerging and developing countries. This represents an enormous, transformative force in regions such as Africa, Asia, Latin America and the Middle East.
But if this still sounds a little bit aspirational, it is because it is. According to the International Labour Organisation, virtually all of these 822 million women are neither “prepared” nor “enabled” – or both – to realise their full potential as economic players. A sobering 80% of them fall into the category of “both”.
So what does it mean to be “prepared” or “enabled”? Broadly speaking, being prepared means having sufficient education, i.e., up to secondary level. Being enabled means the ability to mobilise families, communities, governments – and even global actors –to support women’s economic empowerment. The specific factors that make up these two broad constraints vary widely across the world, and are by no means easy to overcome.
This is not to say that progress cannot be made. Women as a group have managed to achieve economic gains, often against the tide of strong societal forces. And as more constraints on workforce participation are removed – through increased migration to cities, the expansion of educational opportunities, changes in local laws, policies and cultural norms– the more women will gradually benefit.
However, to accelerate the integration of women into the economic mainstream, specific policies will be required. A growing body of empirical evidence shows that policies such as:
i. equal education opportunities for girls;
ii. access-to-work laws; and
iii. Entrepreneurial support (such as access to finance and training),
are clearly correlated with indicators of enhanced women’s economic empowerment such as:
i. greater inclusion of women in the labour force;
ii. the number of women among professional workers, business leaders, and company owners; and
iii. equal pay for equal jobs.
Let us take a step back for a moment to remind ourselves why investing in opportunities for women and girls are so important. Beyond the moral imperative of gender equality, there is a strong economic and business case to be made for empowering women. Many of you may already be familiar with World Bank research findings which show that women reinvest up to 90% of their earned income in their families and communities. Because women are more likely than men to invest in their families particularly in their children’s education and health, paid work for them means a multi-generational boost to economic growth, as those children grow up and contribute to a strong and more skilled workforce.
Norway, of course, has been a pioneer in the use of policy to promote full participation by women at every level of the economy. Policies like the ‘father’s share’ of parental leave, the 40% corporate board quota, and subsidised childcare have helped Norway achieve one of the highest women’s labour participation rates in the OECD. Norway’s oil gets lots of attention, but realising the potential of its women has been a big part of its economic success.
Some developing countries have also been reaping the economic dividends of increased gender equality. Rwanda, for example, has made great strides in promoting gender equality, backed by strong government commitment. It is the only country in the world where more women than men hold parliamentary seats; and one of the few countries where men and women have equal representation in the workforce. Last year, the country placed 7th place in the World Economic Forum’s Global Gender Gap report, ahead of countries such as Germany, France, the US and Australia. It is no coincidence that Rwanda has averaged economic growth of over 8% in the last decade.
Both Norway and Rwanda hold a very important message for a world economy still searching for growth: countries that succeed at harnessing the economic force of their women have a clear edge. In the US, achieving equal participation of men and women in employment could raise economic growth by 5%. In Egypt, the gains could be as high as 34%.
So where does ITC fit into this equation?
As we have seen, only a few years from now, more than 800 million women in developing countries will be in a position to make meaningful contributions to their own – and our collective – economic prosperity. To make these contributions, however, they will need decent, productive employment opportunities. The vast majority of these opportunities are likely to come from micro, small and medium-sized enterprises, which account for about 80% of jobs in developing as well as developed countries. Many of these opportunities will be generated by the women themselves.
At ITC, in addition to our SME focus, we specifically promote entrepreneurship among women as a means to achieving women’s economic empowerment. Women-owned SMEs in developing countries represent close to 40% of all SMEs, and thus make up a critical mass of development agents. Women-owned SMEs provide jobs for some of the most vulnerable groups in society, including young people and other women. In most sub-Saharan African countries, entrepreneurship rates among men and women are almost equal. Boosting female entrepreneurship rates will have a proportionately greater impact on the likely post-2015 development goal of eliminating extreme poverty by 2030.
Another reason why it is so important to support women entrepreneurs is because they create a virtuous cycle for female participation in business. The evidence shows that 9 out of 10 women who receive training in business skills ‘pay it forward’ by teaching and mentoring other women.
However, even when women are active business owners, they often do not reach their potential. This is not just a problem for women entrepreneurs in developing countries: in the US, for example, women own about 30% of all businesses, but these businesses account for just 4% of total business revenues. For developing countries, the overwhelming challenge is to help women entrepreneurs break out of their “micro” status. This is where ITC comes in. We have over 50 years of experience in supporting women-owned businesses in different ways, from tailored projects such as one working with women-owned SMEs in the cashmere sector in Mongolia; to mainstreaming gender in the design and implementation of partner governments’ national export strategies.
When governments are seeking to boost exports, the sectors they choose to prioritize have very different implications for women’s employment and empowerment. For example, a project we have on Empowering Women in Coffee in Africa – on which more in a moment – sprung from the gender dimension of Uganda’s National Export Strategy, which looked at four sectors with high female participation and export potential, of which coffee was one.
We launched our flagship Women and Trade Programme in 2010. This programme -- funded by Norway, the UK Department for International Development as well as other donor governments– seeks specifically to increase the economic benefits that women entrepreneurs derive from trade, and strengthen their competitiveness. It also seeks to tackle one of the major barriers to women entrepreneurship: lack of access to markets and to buyers.
In order to overcome these barriers, ITC has developed a dedicated platform to facilitate connections between buyers and women entrepreneurs in developing countries, called the Global Platform for Action on Sourcing from Women Vendors. One key element of this Platform is our annual Women Vendors Exhibition and Forum (WVEF), which brings together corporate and government buyers and women vendors for facilitated business-to-business. To date, ITC has organised three of these events, which have generated over USD 25 million worth of contracts and letters of intent to source from women-owned enterprises.
This year, we are taking WVEF to Brazil in August. Details of the event will soon appear on our website and I look forward to seeing you again in August. After all Norwegians are the second largest per capita consumers of coffee in the world, and we would be delighted to help you source your coffee from women vendors in Brazil.
A more recent venture under our Platform for Action on Sourcing from Women Vendors is an initiative to empower women through public procurement. This aims to improve women’s access to the multi-trillion dollar market in government contracts. Women-owned businesses currently account for only 1% of government procurement. This small share is due to a number of unique disadvantages they face when compared with their male counterparts, including lack of access to information on bids, unfamiliarity with tender procedures, and inability to meet the volumes required.
Last year, ITC launched our “Empowering women through public procurement” guide, to provide governments and other procuring agencies with concrete techniques to address the constraints that impede women’s access to public contracts in their procurement policies, thus encouraging them to expand their supplier base to include more women vendors. We work with governments – from Samoa in the Pacific, to Uganda in Africa – to help them level the playing field by giving priority to women-owned businesses for procurement contracts. Our goal is to increase women’s access to public procurement deals to 5% - still modest, but a huge improvement on the status quo. And this is an endeavour that both developed and developing countries can join in. After all we are building a “universal agenda”.
I encourage you all to share your thoughts and ideas on moving the global agenda on women’s economic empowerment forward in the Q&A session and I thank you for this opportunity.