This is Paloma. Paloma is an 11-year-old Guatemalan girl. And she is my daughter. Honestly, I’m afraid for her future.
Michelle Obama told us, “No country can ever truly flourish if it stifles the potential of its women and deprives itself of the contributions of half of its citizens.”
Social and economic exclusion is something that women face every day, in every corner of the world. And it’s just not acceptable.
First, women business owners still lack access to finance. 73% of women-owned small businesses in emerging markets are underserved by the formal financial system.
Second, there are not enough women serial entrepreneurs—only 36% relative to 64% for men.
Third—and perhaps most important—women are vastly underrepresented in higher-value knowledge economy or STEM enterprises (STEM = science, technology, engineering, and math). Only 6% of women become STEMpreneurs, as opposed to 40% of men. This is critical because these are the kinds of enterprises that will most likely engender the breakthroughs necessary to truly address social and economic exclusion.
Now more than ever, we cannot afford to leave our girls behind. We simply must find solutions to social and economic exclusion.
For women to fulfill our destinies, we must be bold. We must be innovative. And we must pave the way for future generations. We cannot simply rely on existing institutions and corporations to solve our most intractable problems. We know that truly disruptive, transformational change comes not from incumbents, but rather from upstarts, newcomers. We need new players, we need new thinking. We need more women entrepreneurs.
Why do I think that women are particularly well suited to fix society’s problems? I can think of three reasons:
1. Women already invest in society. From 2000 to 2010, increases in women’s income led directly to a 30% decrease in extreme poverty in Latin America and the Caribbean. We know that women invest their income in their children’s education, better nutrition, and improvements in the home. We also know that women are more likely than men to invest in social and environmental enterprises.
2. Women are great customers. Women save more than men, are better borrowers, and are fiercely loyal. And they often control the purse strings of the household budget. So, initiatives that target women are likely to make a difference.
3. Women make businesses more profitable. McKinsey & Company studies show that companies with women in positions of leadership are 15% more profitable than those without. In Silicon Valley, startups with at least one woman founder enjoy 63% more returns on investment than startups led by all-male teams.
Despite the obvious benefits to society and the economy of women-led entrepreneurship, we still have a long way to go.
However, several promising initiatives are tackling the critical issue of including women in knowledge economy entrepreneurship:
- Nurturing the next generation labor force. In the United States, girlswhocode and blackgirlscode are aiming to close the huge gender gap in technology. In Latin America, Laboratoria has partnered with the Multilateral Investment Fund (MIF) to teach girls to code in Peru, Chile, and Mexico. Also in Chile, Jump is working to make the math curriculum more inclusive.
- Helping to build the ecosystem required for STEMpreneurship. Business incubators and accelerators like accelerators such as NXTP Labs and Wayra are laying the groundwork. NXTP Labs is an early-stage fund for tech companies in Latin America, with investments in more than 160 companies in 5 countries there. It is actively engaged in incorporating and fostering women entrepreneurs; 25% of its portfolio companies are led by women. Wayra is the digital start-up accelerator for Spain’s telecommunications giant Telefónica. Wayra selects 10 projects in each country where it operates, then provides mentoring and other resources to the projects at one of several Wayra spaces where entrepreneurs can work. Initially launched in seven Latin American countries, Wayra is expanding to Europe.
- Supporting startups. In Latin America and the Caribbean, the MIF is working with 15 banks to develop and deliver appropriate financial services for women entrepreneurs.
I feel the urgency of addressing social and economic exclusion now, and I hope you do as well. To quote another great woman, my mom: “This life is not a dress rehearsal. It’s the performance and it’s happening right now.” We need to take action immediately to ensure a better future for Paloma and for all our daughters and sons.
If not now, when?
And if not us, who?
From the Multilateral Investment Fund Trends blog