August 18, 2016
The issue of women being marginalized and not afforded equal opportunities in the entrepreneurial sphere has long been publicized and reviewed. More recently, research focus has been increasingly pointing towards the need for greater economic inclusion of women as a lever to alleviating poverty and economic betterment, especially in developing markets. The International Labor Organization ’s revelation that there are 812 million women in these markets whose potential to contribute towards their economies as both employers and employees is yet to be unleashed is startling. As noted by author Jackie VanderBrug, women in emerging markets are reinvesting an astounding 90 cents of every additional dollar of income earned into the wellbeing of their family – education, health and nutrition1, a forceful message that when equipped with the right resources and opportunities, women’s contribution will contribute immensely to the socioeconomic betterment of their local and global communities and economies. However, there is no denial that the road to reducing gender equality in women entrepreneurship is long, harsh, uneven and gradual, riddled with challenges and hurdles some of which are already deeply ingrained into the modus operandi of societies, cultures and practices.
As part of our continuous journey to better understand women’s progress and achievement in society, Mastercard has created the Mastercard Women’s Entrepreneurial Index 2016 to gauge female entrepreneurs’ ability to capitalize on opportunities granted through various supporting conditions within their local environments. The index also looks at how markets in the Asia Pacific region differ in terms of the level of women’s advancement and supporting entrepreneurial factors. Based on these observations, we are better able to identify which conditions are most conducive to women’s capabilities and performance as entrepreneurs.
Spanning 16 key markets in the Asia Pacific region – Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Nepal, New Zealand, Pakistan, Philippines, Singapore, Taiwan, Thailand and Vietnam – the index is the weighted sum of two components: “Level of Women’s Advancement and Entrepreneurial Factors” and “Supporting Conditions”. These are in turn comprised of 10 indicators, all of which formulated to range from 0 (worst) to 100 (best). The Index, ranging from 0-1002 (worst to best), is created based on data from Mastercard’s in-house research and external sources such as FINDEX, ILO, UNESCO and Inter Parliamentary Union, among others.
The “Level of Women’s Advancement and Entrepreneurial Factors” component has a 60 percent weighting and includes five indicators that are geared towards measuring the degree of bias against women as workforce participants, political and business leaders, as well as the financial strength and entrepreneurial inclination of women. These indicators reflect how much or little progress women have achieved from various perspectives: economical, financial, social, political and entrepreneurial. The “Supporting Conditions” component has a 40 percent weighting and includes five indicators that gauge the degree of access women have to basic and advanced knowledge assets, access to basic financial services, women’s perception of safety levels and cultural perception of women’s household financial influence. These conditions provide the necessary underlying framework to foster and enhance women’s potential to advance as entrepreneurs.
|Overall Index||Component (weight)||Indicator (weight)||Description (Source, Year of Data)|
|Mastercard Women's Entre-preneurial Index||Level of Women’s Advancement and Entre-preneurial Factors (60%)||Female Workforce Participation Rate (12%)||Measures the bias against women in the workforce (ILO, 2015)|
|Women in Parliament as percent of all Parliament Members (12%)||Measures the bias against women as political leaders (Inter Parliamentary union, 2015)|
|Women Business Leaders as a percent of all Business Leaders (12%)||Measures the bias against women as business leaders (ILO, 2015)|
|percent of Females who Obtained Funds by Saving or Borrowing to Start, Operate, or Expand Business, Female Aged 15+ (12%)||Measures the ability of women to raise money to fund their business (FINDEX, 2014)|
|percent of Females Inclined to Start Own Business Within The Next 5 Years (12%)||Measures the entrepreneurial inclination of women (Mastercard, 2015)|
|Supporting Conditions (40%)||Gross Enrollment Rate of Females in Tertiary Education (12%)||Access to advanced knowledge assets for women (UNESCO, 2015)|
|Gross Enrollment Rate of Females in Secondary Education (12%)||Access to basic knowledge assets for women (UNESCO, 2015)|
|percent of Females with a Debit Card Aged 15+ (12%)||Proxy for the access to basic financial services for women (FINDEX, 2014)|
|Financial Influence of Women at Home (12%)||Cultural perception of women’s financial influence in the household in terms of day to day budgeting, savings and investment, and the purchase of large ticket items (Mastercard, 2015)|
|Perceived Safety from Threat of Violent and Financial Crime to females (12%)||How women perceive the level of safety within their local environment (Mastercard, 2015)|
The findings from the Mastercard Women’s Entrepreneurial Index underscore that women entrepreneurship is progressing at different rates and in different ways across the 16 markets in Asia Pacific. In markets such as New Zealand, Australia, Singapore and Taiwan which are ranked 1st, 2nd, 5th and 6th, respectively, women entrepreneurship is largely driven by strong enabling conditions such as high opportunity to attain advanced knowledge assets and access to mainstream financial services. On the other hand, in Thailand and the Philippines which are ranked 3rd and 4th respectively, women’s progress as entrepreneurs is driven by higher levels of women’s advancement and entrepreneurship factors such as business leadership and politician representation as opposed to enabling conditions.
Interpretation of the Index scores reveal that in relation to the other markets in Asia Pacific, the supporting conditions and level of advancement in women’s entrepreneurship in New Zealand (score of 53.9 points) are nearly two times more favorable/higher than those in Bangladesh (score of 27.0 points). Given that the scores may theoretically never reach the maximum of the 0–100 point scale (100 being the highest), the index scores effectively suggest that on a regional basis, the underlying enabling conditions for women entrepreneurship are the most nurturing in the markets of New Zealand, Australia, Thailand, Philippines and Singapore where the overall Index scores are all above 50 points. At the lower end of the scale, the findings show that relative to their peers, the conditions that foster female entrepreneurship are the least favorable or conducive in the lowest ranked markets of Bangladesh (27.0), Sri Lanka (32.7) and India (33.3).
The Index also reveals that while markets with scores of between 40 to 50 points are closely ranked, they differ at the component level. While markets such as New Zealand and Australia have stronger supporting conditions than their ASEAN peers such as Thailand and Philippines, they are weaker in terms of the level of women’s advancement and entrepreneurial factors.
There is a positive correlation between women business ownership and the Index scores as depicted by the upward curving line in the chart below. This ‘line of best fit’ or ‘index trend line’ represents each market’s respective Index score plotted against the percentage of women business owners. The upward slope suggests that in general, markets that had higher Index scores tend to have a higher percentage of business owners.
The chart shows that markets residing above the trend line such as Australia, Singapore, Vietnam, China and Bangladesh are performing better than expected given the degree of supporting conditions and level of advancement in their respective environments. This implies that compared to their regional peers below the trend line such as Taiwan, Malaysia and India, female entrepreneurs in Australia and Singapore are relatively more capable of rising above the restrictions and challenges in their local environments through other means and avenues such as better networks, social support, and funding alternatives. They may also possess more superior or refined social and interpersonal skills (e.g. negotiation, business presentation), or are able to garner greater support from family and social circles. Compared to their peers, female entrepreneurs in these markets may be able to source for more business opportunities that are not localized.
For instance, women in China may be better placed than women in India in terms of their ability to access and utilize e-commerce as a platform for sourcing and conducting business – a trend that has been realized through the influence of the government and private sector in working towards connecting the nation through the Internet and other information and communications technologies. This has brought about the emergence of more Chinese women entrepreneurs (29.0 percent) than what the expected level of conditions would have brought. Similarly in Australia, we find the percentage of female business owners (33.6 percent) to be not only the highest in the region, but above and beyond the conditions and level of advancement represented by the trend line.
In contrast, women in markets that are below the trend line such as Taiwan, Hong Kong, Malaysia and India are less able to utilize the existing opportunities and enabling conditions available in their local environments to pursue business ownership. For example, in Taiwan, in spite of the relatively high percentage of female in parliament (25.3 percent, 4th), high access to basic (99.7 percent, 5th) and advanced education (88.0 percent, 3rd), the percentage of female business ownership is low at the regional level (19.3 percent, 12th). It is possible that women in these markets are restricted by other challenges and constraints such as cultural bias against women assuming business risks, lack of family support and flexibility to run their own business, lack of management skills, or fear of losing the financial security of fixed salaries. It is also possible that there is simply a lack of optimism among women of their capabilities to successfully manage their work-life balance and the financial risks associated with business ownership. This suggests that the full potential of women as entrepreneurs is not fully harnessed.
Case Study: Bangladesh
The case of women in Bangladesh warrants special mentioning. In spite of the considerably less favorable supporting conditions, the percentage of female business owners in Bangladesh at 25.8 percent (6th) actually surpasses that of most of its regional peers including the developed markets of Hong Kong (19.8 percent), Japan (17.6 percent) and Korea (23.2 percent). In fact, a recent article published by the International Labour Organization (ILO) reveals women in Bangladeshi to be at the “forefront among the least-developed countries in addressing gender parity”3. Apart from making major strides in entrepreneurship, Bangladeshi women have achieved tremendous progress in their participation in parliament (doubling from 10 percent in 1990 to 20 percent in 2015). In terms of workforce participation, they are playing an increasingly vital role in contributing to the economy (58.1 percent, ranked 6th), especially in the ready-made garment (RMG) sector whereby nearly 80 to 85 percent are female workers. Such commendable progress is partly attributed to the positive impact of microfinance programs initiated in the rural areas allowing women to borrow (92 percent of borrowers are females) – a move that has increased women’s sense of empowerment, financial capacity and influence, social acceptance and political involvement, and general welfare. It should be noted that while Bangladeshi women business owners as a percentage of all business owners more than doubled from 10 percent in 2005 to 25 percent in 2010, almost all of this increase was achieved in the rural sectors and understandably so since much of the effort to support female entrepreneurship has been focused at rural Bangladesh.
The Index scores highlight that women’s inclination to be or ability to thrive as entrepreneurs appear to vary depending on the strength or weakness of their respective country’s “Supporting Conditions”. These include considerations such as women’s access to basic and advanced knowledge assets (human capital), access to financial capital, and safety from threats of financial crimes. For instance, in countries such as New Zealand, Australia and Taiwan where the accommodating conditions shaping women’s entrepreneurship are the highest, their overall Index scores are also higher (within top 6 rankings).
|Markets||Index Score & APAC Ranking||Supporting Conditions Component Score (Rank)|
|New Zealand||53.9 (1st)||31.9 (1st)|
|Australia||51.7 (2nd)||31.3 (2nd)|
|Taiwan||48.6 (6th)||29.8 (3rd)|
|Singapore||50.1 (5th)||29.4 (4th)|
|Korea||46.2 (9th)||28.1 (5th)|
Since the differentiation between two different types of entrepreneurship by the Global Entrepreneurship Monitor (GEM) in 2001: Necessity and Opportunity Entrepreneurship, various studies have been undertaken to further explore the different implications and impact of the two. These included the difference in their characteristics and earning differentials (profitability)4, how they perform through the business cycle5, and their duration in self-employment6.
In this report, Necessity Entrepreneurs among women are described as those who are driven by the overriding need to survive and support oneself and/or family due to the lack of employment opportunities. This is usually due to various factors such as: (i) the lack of access to higher levels of education and hence the lack of capacity or qualification to take on roles such as business owners, business leaders and politicians, (ii) inability to secure start-up funds/loans and capital, (iii) the need to earn supplementary income to alleviate existing economic stresses, and (iv) overpowering cultural bias against women working or taking up risks. These circumstantial factors are external ‘push’ conditions that are usually not controllable and in turn, drive women to take on business ventures that are less productive or to operate in markets that are already saturated due to the limited entry barriers or limited startup capital.
In contrast, Opportunity Entrepreneurs are those who are driven by the intrinsic desire to progress up the social, economic or political ladder. These women are typically motivated by ‘pull’ factors such as the possession of higher levels of financial and knowledge assets that allow them to assume positions of leadership, business ownership and politicians. They are usually driven by an attractive or opportunistic venture that usually encompasses innovation, new ideas or concepts or the development of products or services that will fulfill unmet/underserved market needs or trends. In these situations, women are unlikely to be held back or suppressed by social bias (cultural and traditional beliefs).
The results from the Index suggest that Opportunity Entrepreneurship is more likely to exist in markets where the underlying supporting conditions for women’s entrepreneurship are more accessible, relevant and acceptable. Furthermore, because the level of advancement and entrepreneurial factors is more established and encouraged, the overall Index and component scores are higher and are considered to be ‘Very Healthy’ relative to their regional peers (e.g. higher percentage of women business leaders, more women politicians and higher female workforce participation). This is highlighted in the chart below where the top 5 markets (New Zealand, Australia, Thailand, Philippines and Singapore) scored not only highest in their overall Index rankings (above 50 points), but the scores of the two components (supporting conditions and level of women’s advancement and entrepreneurial factors) tend to be among the highest in the region. This is represented by the intensity of colors in the chart where the darkest intensity (deep orange) denotes the highest/best scores and lowest intensity (light yellow) indicates lowest/weakest scores.
Conversely, Necessity Entrepreneurship is more likely to exist in markets where the underlying supporting conditions for women’s entrepreneurship are less developed, established, and are thus considered to be ‘Quite Healthy’ or ‘Acceptable’ relative to their regional peers. The drive to escalate the level of women’s advancement and entrepreneurial factors in these environments may be less pronounced and encouraged amid higher prevalence of gender cultural bias, leading to the lower percentage of women business leaders, women politicians and female employees. These conditions are likely to be more acute in markets at the bottom of the chart below: Malaysia, Sri Lanka, India and Bangladesh whereby the overall Index and component scores are lower (shaded in light yellow or light orange).
NEW ZEALAND (1st) and AUSTRALIA (2nd)
A close-up of the underlying supportive conditions in the leading markets of New Zealand and Australia reveal that there are several core factors ‘pushing’ women entrepreneurs’ advancement forward more effectively than their regional peers. First, women in these markets tend to have higher opportunities and access to advanced education, granting them with the human capital and competitive edge needed when it comes to finding work in the labor force, starting their own business ventures, assuming business leadership roles and being represented on corporate boards and in parliament. They are also more able to break free from being locked down in the traditional service-oriented industries and are enrolling in much more challenging STEM courses (Science, Technology, Engineering & Mathematics). Various research studies indicate that companies with female board representation outperform those with no women on the board (Credit Suisse Research Institute, 2008) and women-led private technology companies are more capital-efficient and achieved 35 percent higher return on investment.
In the chart below, we note that women in New Zealand and Australia are leading the way in various metrics in Asia Pacific, including: (i) Female Business Ownership (International Labor Organization - ILO) as a percentage of all business owners (New Zealand: 31.5 percent and Australia: 33.6 percent); (ii) Percentage of Women Business Leaders (New Zealand: 39.9 percent, 2nd and Australia: 36.2 percent, 3rd); (iii) Percentage of Women in Parliament (New Zealand: 29.8 percent, 2nd and Australia: 30.1 percent, 1st) and (iv) Women Workforce Participation (New Zealand: 61.6 percent, 4th and Australia: 59 percent, 5th).
The opportunity to obtain advanced knowledge assets has also allowed women to leverage their managerial and interpersonal skills where mental skills are favored and valued higher than physical labor. A recent global study ‘The 2015 Global Women Entrepreneur Leaders Scorecard’ undertaken by Dell & ACG Inc. found Australia to be the top scorer for potential entrepreneur leaders with over half of Australian female entrepreneurs having a college background – an attribute and advantage that allows women to build networks for leverage and as a platform to grow their business. At the same time, the proliferation of information technology and the widespread usage of the internet have made it easier for women to achieve a more satisfying, effective and flexible work-life balance. Conversely, in developing markets such as India, Sri Lanka and Bangladesh where the access and opportunity to attain advanced education is less relative to the other markets, the Index scores are lower as well at 33.3, 32.7 and 27.0, respectively.
Second, using the percentage of females with debit cards as a proxy to measure women’s access to mainstream financial services, it is observed that women in New Zealand (94.4 percent, 1st) and Australia (86.7 percent, 3rd) are among the highest ranked in terms of ownership of debit cards in the region. This could be due to various reasons such as: (i) women in these markets are considered to be more bankable compared to their peers; (ii) the banking and financial infrastructure and frameworks in these markets are developed relative to the other markets; (iii) the penetration of financial products and privileges such as debit cards to females is high; and (iv) women are financially savvy.
(Source: Mastercard In-House research, ILO 2015, World Bank Group 2015, UNESCO 2015, WEF 2015, Inter Parliamentary Union 2015, FINDEX 2014)
Third, the growing and strengthening trend for networking among female entrepreneurs plays a vital role in fostering the right conditions to drive women’s ability to succeed in the corporate arena. It is not surprising to note that there is a strong presence, awareness and recognition of organizations such as “Co. of Women”7 in New Zealand and “Women as Entrepreneurs” (WE)8 in Australia that provide tremendous support, resources and access for women entrepreneurs. Through these organizations and public events, a strong culture of networking for women entrepreneurs is fostered and is powerfully augmented by the high internet penetration and widespread social media usage (e.g. Facebook, blogs, Twitter) that exist where current or aspiring women entrepreneurs are able to readily share their success stories and become mentors for other entrepreneurs. Such web presence and high-attendance public events render women with a greater voice, transparency and visibility and effectively serve as crucial platforms to showcase women’s ability to overcome cultural barriers such as bias against working women, women on board and women serving in parliament. According to the GEDI-Gender 20124 Executive Report, a large proportion of women are not leveraging their entrepreneurial potential/value via professional social media such as LinkedIn profiles. Australia, despite being ranked 2nd overall in the GEDI-Gender Index, the percentage of women who have LinkedIn profiles is only around 43 percent (similar to the U.S. and South Korea, and trailing Jamaica at 53 percent).
Fourth, there is a strong cultural awareness of and acceptance that women in these markets (and other developed and more open markets such as Singapore) are increasingly threading into and succeeding in the corporate and political arena. Alongside these social breakthroughs is the rising recognition of the importance of work-life balance and women’s ability to play an active and successful role in the economy and society. In fact, New Zealand and Australia have been heralded as the world’s most accommodative and nurturing countries for working women in an article released by The Economist in 2010. Called the “Glass-Ceiling Index”, the metrics draw on data from OECD, ILO, Catalyst and The Economist and revealed New Zealand as the top and Australia as the 5th most attractive market among a cohort of 26 global countries where women will have the best chance of getting equal treatment at the workplace9. According to the World Bank Group’s ‘Doing Business Ranking: 2015/16’, New Zealand and Australia are both ranked highly in 2nd and 13th place, respectively among 189 other countries globally.
Fifth, the Index indicates that having less influence than their regional counterparts when it comes to making household financial decisions did not appear to be jeopardize or advance women’s level of entrepreneurial advancement: New Zealand (47.6, 10th) and Australia (46.4, 13th). Lastly, women’s perception of safety from violent and financial crimes did not appear to have an impact on their inclination/decision to become an entrepreneur: New Zealand (60.5, 5th) and Australia (54.2, 11th).
Areas of Concern: Room for Improvement
It should be noted that although New Zealand and Australia are among the top ranking markets in the region, there are still many areas to be improved upon to further drive the progress and momentum of women entrepreneurship. For instance, despite the fact that the gross enrollment rate of New Zealander females in secondary education is 100 percent and that for tertiary education is very high at 98.6 percent, only six out of every 10 females are actively participating in the workforce and contributing to the economy. Statistics by the National Advisory Council on the Employment of Women (New Zealand) reveal that women are over-represented in the health sciences sector and under-represented in areas such as engineering and technology as well as in leadership roles within the research and academic sectors10. Although there are currently various programs to support women’s participation in innovation and leadership – skills that are fundamental and vital in business ventures - it will take the collective effort and interest of multiple stakeholders to put these measures into place and time for results to reflected.
The markets of Thailand, Philippines and Singapore have very close and healthy index scores of 50.9, 50.6 and 50.1 points, respectively. In Thailand and Singapore, women’s entrepreneurship is largely driven by favorable ‘Supporting Conditions’ such as high access to education and mainstream financial services. It should be noted that although these enabling conditions of women’s entrepreneurship are less favorable in the Philippines compared to the other markets (score of 20.3, rank 11th), the ‘Level of advancement and entrepreneurial factors’ component defined by proxies such as the percentage of female politicians and business leaders is scored the highest in the Philippines (30.3, 1st in region). In fact, women in the Philippines topped the region in 3 areas: (i) percentage of women business leaders – score of 47.5 percent; (ii) percentage of women who are able to fund their business through savings or borrowing – score of 45.3 percent, and (iii) women’s motivation to be business owners as proxied by the percentage of females inclined to start their own business in next 5 years – score of 81.8 percent. These indicators make them likely candidates to be ‘opportunity entrepreneurs’ displaying traits of being able to overcome traditional cultural bias against women playing an active role in the business world. They are also likely to be ambitious with desires to escalate up the socioeconomic ladder.
It is encouraging to note that the proportion of female business leaderships in all three markets is high: Philippines (47.5 percent, 1st), Thailand (33.8 percent, 4th) and Singapore (33.5 percent, 6th). Women’s ability to seek funding to start, operate or expand their businesses is particularly high in the Philippines (45.3 percent, 1st) and Thailand (41.1 percent, 3rd). The scorecard also shows female’s interest to become business owners in the next five years to be very high in the Philippines (81.8 percent, 1st) and Thailand (69.3 percent, 2nd) in spite of the difficulties in doing business in both markets: Ease of Doing Business Ranking is 103rd in Philippines and 49th in Thailand. In Singapore, the particularly high percentage of female business owners (29.6 percent, 3rd) in the region is likely to be supported by the high ease of doing business (ranked 1st among 189 countries by the World Bank Group).
Women’s access to mainstream financial products such as the ownership of a debit card vary significantly between the three markets with Singapore in 2nd place (90.2 percent ownership), Thailand in 8th place at 58.4 percent and Philippines in 15th place at 15.4 percent. Similarly, women’s participation in the labor force is also different among the three markets with Thai women being the 3rd most active in the region (63.7 percent) and Singaporean (55.8 percent, 7th) and Filipino (50.4 percent, 11th) women being comparatively less active.
(Source: Mastercard In-House research, ILO 2015, World Bank Group 2015, UNESCO 2015, WEF 2015, Inter Parliamentary Union 2015, FINDEX 2014)
In Singapore, the relatively high female enrollment rate in tertiary education (69.2 percent, 6th compared to 103.4 percent in Australia) may have been serving as an effective platform allowing women to gain prominence in the political and corporate spheres: one in four parliament members are female (25.3 percent, 5th) and one in three business leaders are women (33.5 percent, 5th). It is also likely society in Singapore is comparatively more liberal, open-minded, and supportive of women assuming high-ranking, visible and global roles outside of the house. The prevalence of networking among women entrepreneurs in Singapore plays a significant role in supporting and strengthening the entrepreneurial capabilities of women. This is manifested through the work of organizations such as CRIB Pte Ltd, the Singapore Council of Women’s Organizations, and The Athena Network Singapore. The effectiveness of this tight network of pro-women entrepreneur organizations is further augmented by the high ease of doing business in Singapore (ranked 1st by in the World Bank Group’s Doing Business Ranking for 2015/16).
Furthermore, according to the World Economic Forum (WEF) Global Competitiveness Index for 2015/16, Singapore is ranked number two globally as one of the most competitive and advanced economies in the world. It is not surprising that BNP Paribas’s Global Entrepreneurial Wealth Creation Index identified Singapore as the world’s 6th most conducive market in creating wealth.
Opportunities in Thailand & Philippines: Networks as Powerful Levers & Vital Pillars of Support
Recent research work undertaken by The Asian Foundation in partnership with the U.S. Department of State and APEC to assess areas that encourage or deter access to trade and progress in women-run or owned SMEs in 3 Southeast Asian countries – Malaysia, Thailand and Philippines - revealed that women business owners who interact with business associations are 24 percent more likely to report plans to increase their firm’s size over the next 3 years11. Other research work by the Boston Consulting Group found that networking encourages women entrepreneurs to “…increase their aspirations, envision long-term plans, and set more ambitious growth targets… and women with more social capital were able to gain greater access to more diverse credit options, including microfinancing and cooperative loans”12.
The implication of these findings is significant. Thailand has one of the world’s most robust and biggest tourism sectors made up predominantly by food & beverage, retail, and beauty and personal care services that are usually SMEs requiring low setup capital and manpower. While these have vastly expanded women’s entrepreneurial opportunity, there is still a lack of support and enabling platforms for female entrepreneurs who are disadvantaged due to gender bias. At present, although there are some support stemming from the government and private sector to establish networking systems such as the “Thai Social Enterprise Office (TSEO)” and the “Women Counselor and Entrepreneur Thai Trade Association (WCETTA)”, other measures are needed to allow women to more effectively showcase their services and products and to expand their networks.
With overall Index scores of 48.6, 46.4 and 46.2, respectively Taiwan, Hong Kong and South Korea are ranked closely together in the region. The most striking similarity between the three markets is the strength of the ‘Supporting Conditions’ component for women’s entrepreneurship: Taiwan at 29.8 (3rd), South Korea at 28.1 (5th) and Hong Kong at 27.9 (6th). However, women in these markets are vulnerable to challenges posed by weaker ‘levels of women’s advancement and entrepreneurial factors’ compared to their regional peers: Taiwan at 18.8 (10th), Hong Kong at 18.5 (11th) and South Korea at 18.1 (12th). For instance, women’s participation in the labor force rank at the lower end of the spectrum with an average of five out of every 10 females of working age actually in the workforce: Taiwan at 52.3 percent (8th), Hong Kong at 51.1 percent (10th) and South Korea at 49.1 percent (12th). This is considered relative low compared to the other regional markets such as Vietnam (73.8 percent), China (66.4 percent) and Thailand (63.7 percent).
This laggard progress in women’s entrepreneurship is reflected in the World Bank’s Doing Business scores whereby despite being ranked among the top 12 in the world, women’s inclination to start their own business in the next five years is muted relative to their Asia Pacific peers such as Philippines and Thailand where the level of advancement and entrepreneurial factors is considerably healthier (refer to table below). The sub-component scores also show women’s roles as business owners to be low with only one out of every five owners being female: South Korea at 23.2 percent (10th), Hong Kong at 19.8 percent (11th) and Taiwan at 19.3 percent (12th). This is comparatively lower than that in Australia, New Zealand, Singapore and China where nearly one in three owners are women.
|Market||Component Score for ‘Level of Advancement & Entrepreneurial Factors’ (Rank)||World Bank Doing Business Ranking 2015/16||percent Females inclined to start own business in next 5 years (Rank)|
|Taiwan||18.8 (10th)||11th||43.5 percent (11th)|
|Hong Kong||18.5 (11th)||5th||44.4 (10th)|
|South Korea||18.1 (12th)||4th||46.9 (8th)|
|Philippines||30.3 (1st)||103rd||81.8 (1st)|
|Thailand||25.7 (2nd)||49th||69.3 (2nd)|
In recognition of the underutilized economic capacities and value of women, the governments in these markets have initiated various programs to empower women as entrepreneurs. For instance, in Taiwan, special incubator facilities and guidance programs have been organized by the government for female entrepreneurs to help them strengthen their entrepreneurial capabilities. In fact, according to a recent report “White Paper on SME in Taiwan 2012”, women entrepreneurs in Taiwan have made notable progress: (i) more than 30 percent of Taiwanese SMEs are owned by women; (ii) 45 percent of women-owned SMEs have remained in the business for more than a decade; and (iii) women-owned businesses account for around 20 percent of sale revenue of all SMEs. As highlighted by the Ministry of Economic Affairs (2014, Small and Medium Enterprise Administration, Taiwan), the government has launched the “Flying Geese Program for Empowering Women Entrepreneurs” that seeks to build social network resources, funding for start-ups, mentorship programs and counseling resources for female entrepreneurs. While the results and outcome of these programs will take time to come into effect, they represent a significant forward stance by the government and various stakeholders to work together to bolster women’s socioeconomic roles.
In Hong Kong, women are making positive inroads as corporate leaders with 33.7 percent of business leaders (ranked 5th) being female, effectively placing them nearly at par with women in the leading entrepreneurial markets of New Zealand (39.9 percent, 1st) and Australia (36.2 percent, 2nd). However, it remains a concern that in spite of their fairly high access to advanced education and financial services and the existence of prominent networking associations such as Female Entrepreneurs Worldwide (FEW) and Women Entrepreneurs Online Hong Kong (WE HK), female’s participation in the workforce and parliament remain low. The level of entrepreneurial enthusiasm as proxied by their inclination to start their own business in the next five years is low compared to their regional peers (44.4 percent compared to 68.0 percent in Indonesia, 62.2 percent in India and 81.8 percent in the Philippines. These observations are mirrored in a recent global survey by BNP Paribas “Global Entrepreneurialism Report” – whereby it was noted that although Hong Kong has the 2nd highest percentage of entrepreneurs (45 percent) trailing only India at 49 percent, their potential are not fully tapped due to a lack of confidence and belief.
(Source: Mastercard In-House research, ILO 2015, World Bank Group 2015, UNESCO 2015, WEF 2015, Inter Parliamentary Union 2015, FINDEX 2014)
With overall Index scores of 47.7, 44.7 and 43.9 respectively, China, Indonesia and Vietnam are ranked closely together. Their scores for the ‘Level of Advancement & Entrepreneurial Factors’ are very similar: Vietnam (24.7, 3rd), China (24.7, 4th) and Indonesia (24.2, 5th) and are considered to be quite healthy at the Asia Pacific regional level, trailing only the Philippines and Thailand at 30.2 and 25.7, respectively, and nearly double that of Japan (13.0). In China, women are making fairly commendable inroads as entrepreneurs in spite of the weak underlying supporting conditions such as poor access to advanced knowledge assets (tertiary enrollment rate is only 32.1 percent compared to 103.4 percent in Australia) and poor penetration of mainstream financial services (female ownership of a debit card is only 50.2 percent compared to 94.4 percent in New Zealand). This is evident through their high female workforce participation rate (66.4%, 2nd), fairly strong financial capacity to fund own business startup/operation/expansion through savings or borrowings (29.7 percent, 4th) and relatively high motivation levels to start their own business in the next 5 years (60.7 percent, 5th). The percentage of females who are active in politics is also quite high compared to their regional peers (23.4 percent versus 30.1 percent in Australia, 25.3 percent in Singapore, 5.8 percent in Sri Lanka and 6.1 percent in Thailand).
In fact, China - alongside Hong Kong and Turkey – have been recently identified as the most conducive countries for entrepreneurialism in BNP Paribas’s Global Entrepreneurism Report 2015 due to their particularly high number of successful high net worth and ultra-high net worth entrepreneurs. Specifically, the report underscored that the next wave of wealth creation will be ushered in by the following favorable characteristics that exist in these markets: strong community of entrepreneurs and high propensity to be entrepreneurial. This finding is reflected in Mastercard’s Women’s Entrepreneurial Index whereby Chinese women’s inclination to start their own business in the next five years is shown to be quite strong at 60.7 percent (5th). The potential for female entrepreneurship to gain more traction in China is also noted in Dell’s Global Women Entrepreneur Leadership Scorecard (GWEL) 2015 due to the booming e-commerce sector.
In Indonesia, the state of ‘Supporting conditions’ (20.5, 10th) and ‘Level of advancement and entrepreneurial factors’ (24.2, 5th) is quite healthy in relation to the other regional markets. Similar to China and Vietnam, women in Indonesia are neither privileged with the opportunity to pursue advanced knowledge assets (female tertiary enrollment rate is only 34.8 percent, 11th) nor are they able to benefit from mainstream financial products/privileges (female debit card ownership is only 25.4 percent , 13th). In spite of these hindrances, Indonesian women are succeeding as business owners and leaders whereby nearly one in every four owners/leaders is a female. They are also particularly apt in funding their own businesses (42.2 percent, 2nd, trailing only Philippines and are enthusiastic about starting their own business in the next five years (68.0 percent, 3rd, trailing only Philippines and Thailand). However, Indonesian women appear to be marginalized at the political sphere with only one out of every six parliament members being a female (16.8 percent, 10th), lagging behind the majority of their peers in Asia Pacific such as Australia (30.1 percent), China (23.4 percent) and the Philippines (27.2 percent). The participation of females in the workforce tends to be at the lower end as well (51.6 percent, 9th) alongside peers such as Hong Kong (51.1 percent) and Taiwan (52.3 percent). This could be due to deterrents such as cultural bias against women being socially, economically or politically active and the traditional belief that a woman’s place is more suited within the household as the primary caretakers. This appears to be consistent with the relatively high score of 55.3 (3rd) for Indonesian women’s role as the decision maker for household financial matters.
The case in Vietnam is quite similar to that in China whereby the lack of favorable supporting conditions (19.2, 14th) have not deterred Vietnamese women from being the most active economically in the region with the highest score of 73.8 points for ‘female workforce participation rate’. Their financial capacity as business owners as proxied by their ability to obtain funding through savings or by borrowing is quite high (28.5, 5th) compared to their regional peers (Philippines in top place with 45.3 and Japan at only 4.3 points). It is encouraging that Vietnamese women are making strong strides as politicians (24.3 percent members in parliament are females, 6th), effectively placing them relatively close to the top scoring markets of Australia and New Zealand at 30.1 and 29.8, respectively. What is most uplifting is that notwithstanding the poor ranking of 90th in terms Doing Business (World Bank Group 2015/16 Ranking), the lack of access to mainstream financial products and poor possession of human capital, Vietnamese women are making their presence felt in the entrepreneurial sphere, boasting a relatively high female business ownership percentage of 28.4 percent (5th in the region) and quite close to the top markets of Australia and New Zealand at 33.6 and 31.5, respectively.
In our earlier discussion on opportunity and necessity entrepreneurship, we segregated markets based on how they performed at the component levels and their overall Index ranking. We anticipate that the particularly high resilience of the female cohort and the potential for women’s entrepreneurship to progress further in these markets (as highlighted in various studies such as Dell and BNP Paribas) will serve as vital platforms for opportunity entrepreneurship to take off in the future. Given the choice, opportunity and right tools, women who are currently in the workforce or already in a business will be inclined to venture into their own business or consider expanding it.
With overall Index scores 40.6 and 38.8 respectively, Japan and Malaysia are ranked closely together but differ at the component level. While women in Japan are disadvantaged by the weak ‘level of advancement and entrepreneurial factors’ (13.0, 16th), they are enabled by rather healthy ‘supporting conditions’ (27.7, 7th and at part with their regional peers such as Singapore and Taiwan). In contrast, women in Malaysia are confronted with comparatively weaker ‘supporting conditions’ (19.6, 12th) such as low access to both secondary and tertiary education, but are enabled by a slightly higher ‘level of advancement and entrepreneurial factors’ (19.2, 9th).
There are also striking similarities between the two markets. For instance, we found women to be under-represented in the workforce (Malaysia at 43.7 percent and Japan at 48.8 percent) and in parliament (Malaysia at 14.2 percent and Japan at 10.8 percent). The low scores for employability suggest that there might be a lack of specialized or professional skill sets and formal work experience. They also generally perceive their safety from violence and financial crimes to be poor and exert little influence over household financial decisions.
In Japan, it is disheartening to observe that despite being fairly well educated at the tertiary level (63.2 percent, 7th), Japanese women ability to contribute at the social, economic and political levels is severely undermined. The findings also point to low levels of motivation/desire among women to become business owners despite the country earning a fairly acceptable ranking of 34th in World Bank’s Doing Business 2015/16 scorecard. The weakness observed in women’s advancement and entrepreneurial factors is likely due in large part to overpowering, deeply-rooted traditional beliefs and cultural bias.
The lack of advancement in entrepreneurial factors among Japanese and Malaysian women is highlighted in the Gender-GEDI 2014 Executive Report whereby it was noted that despite the availability of ‘Favorable business environment’, women in these markets have weak ‘Startup skills’ and lack the ability to identify business opportunities. Of the 30 countries analyzed in the GEDI index, Malaysia’s overall ranking declined the most by four places from 2013 to 21st place in 2014 on the decrease in growth-oriented female startups and lower levels of female leadership13. Women in Malaysia are also marginalized by restricted access to public spaces due to discriminatory practices. The trend for networking and the usage of social media is also low with only around 40 percent of women having LinkedIn profiles, suggesting that there is much more that can be done to expand the visibility, connectivity and access to resources for women in these markets.
With overall Index scores of 33.3, 32.7 and 27.0 respectively, India, Sri Lanka and Bangladesh are the three lowest ranked markets sharing similarities at the component level. Specifically, we note ‘Supporting Conditions’ such as access to advanced education and basic financial products to be weak in these markets relative to their peers in Asia Pacific. The ‘Level of Advancement & Entrepreneurial Factors’ is also weak with women being largely under-represented in the workforce, parliament, business leadership, and university enrollment. The figures show that on average, only one in 10 business leaders is female. Similarly, the scores for the percentage of females in parliament are low (ranging from five percent to 20 percent) - a stark contrast to their peers such as Australia, New Zealand and Philippines where there are usually 30 percent females politicians.
The scores also indicate that females’ employability in India (28.8%, 16th) and Sri Lanka (35.4%, 15th) to be severely undermined and low at the regional level, while that for Bangladesh is slightly better at 58.1 percent (6th). Women’s advancement as entrepreneurs is further aggravated by the lack of favorable conditions in doing business – the World Bank Group’s Ease of Doing Business index shows India, Sri Lanka and Bangladesh’s ranking to be particularly low at 107th, 130th and 172nd respectively.
Of the 10 indicators, Bangladesh women are lagging behind their regional peers in five aspects: women business leadership (5.5% percent), enrollment in tertiary education (14.4 percent), enrollment in secondary (57.6 percent), females debit card ownership (7.8 percent), and perception of safety from violence and financial crimes (27.7 percent). The lack of opportunity for both basic and advanced education is reflected in the low female workforce participation rate (58.1 percent). Bangladeshi women also have minimal means to finance their own businesses (6.1 percent, 15th) – this is likely due to the lack of work opportunities and source of income. Given these conditions, it is unsurprising that their inclination to start their own business is very weak (37.6 percent, 12th) compared to their peers. The lack of motivation to engage in entrepreneurial activities is also reflected in the Global Entrepreneurship Monitor report (2011) whereby the ‘fear of failure’ among Bangladeshi women is very high (72 percent compared to 38 percent in India), the perceived capabilities to do so acutely subdued (24 percent) and the entrepreneurial intention highly lacking (25 percent). Studies by the Asia Foundation revealed that male-operated SMEs in Bangladesh outnumber those led by female SME entrepreneurs significantly with less than two percent of the 3,800 firms in the sample having at least one female owner.
Despite their lowest overall ranking in the Mastercard Women’s Entrepreneurial Index, Bangladeshi women are making laudable progress in the political arena with 19.8 percent (8th) of parliament members being female. This is considered to be healthy given the highest percentage is 30.1 percent in Australia and 29.8 percent in New Zealand, and the lowest is 5.8 percent in Sri Lanka and 6.1 percent in Thailand. Such achievement is remarkable given that the proportion of female politicians was only 10 percent in 1990 (ILO, 2010). As mentioned earlier in Section 2.1 (page 6), the percentage of female business owners in Bangladesh (25.8 percent, 6th) actually surpasses that of most of its regional peers including the developed markets of Hong Kong (19.8 percent), Japan (17.6%) and Korea (23.2 percent). This figure is also quite comparable to the top percentage scores in Australia (33.6 percent female owners) and New Zealand (31.5 percent, 2nd). Such progress is largely underpinned by the positive effects of microfinance programs initiated in the rural areas that have allowed Bangladeshi women to borrow.
Unleashing the Potential of Female Entrepreneurs in Developing Nations
The economic sense of investing in women and their entrepreneurial capabilities as a crucial means of achieving sustainable economic development, especially in developing nations like India, Sri Lanka and Bangladesh is acknowledged widely. Suffice to say, improving the enabling conditions for women’s progress and capabilities as entrepreneurs is likely to contribute positively towards the growth of the economy and welfare of the people, especially in terms of poverty reduction and job creation. Using the case of Sri Lanka as an example where the female literacy rate in secondary schools is 100 percent (highest in the Asia Pacific region and surpassing the UK), the potential for Sri Lankan women to play an economically more active role is tremendous. According to a recent report in the Technology Innovation Management Review, 80 percent of Sri Lanka’s GDP is contributed by SMEs of which only 10 percent are driven by women.
In India, the lack of progress among local women is also evident. However, recent research undertaken by the United Nation Economic and Social Commission for Asia and the Pacific revealed encouraging trends whereby the lack of opportunities and gender bias against women in India are driving women to embrace other opportunities and exploit avenues presented by information and technologies (ICTs) to create marketing channels, gather customer information, create their own support networks, and improve the efficiencies of their business process through better means of collaboration and engagement. Specifically, the usage of ICT technologies in India has allowed 81 percent of women to communicate, collaborate and network with others. Recent data from the Global Entrepreneurship Monitor (GEM, 2014) shows adults in India to be generally positive about entrepreneurship: 58 percent consider entrepreneurship to be a desirable career choice while 66 percent believe that being an entrepreneur commands a high level of status and respect (66 percent). More importantly, the report reveal that an impressive one-third (34 percent) of early-stage entrepreneurs in India are women.
In acknowledgement of the myriad of obstacles faced by Bangladeshi women, The Asia Foundation is embarking on a new initiative with Banglalink (the nation’s second largest mobile carrier) to increase women entrepreneurs’ access to business opportunities through associations, informal peer groups, and business hotlines. This will effectively enable women to seek advice from knowledgeable business counselors on how to obtain business licenses and bank loans, gain better access to the booming ICT sector and receive specialized training, among others. More importantly, this initiative will allow women entrepreneurs to sell their products online via a dedicated platform (bdwomensme.org).
The Mastercard Women’s Entrepreneurial Index 2016 highlights how markets in Asia Pacific share similarities and differences in terms of the supporting conditions and level of advancement of women’s entrepreneurship. The results underscore the difference in the pace of progress across the markets with New Zealand, Australia and Thailand leading the region in 1st, 2nd and 3rd places and India, Sri Lanka and Bangladesh being the regional laggards in 14th, 15th and 16th place, respectively.
Exploration of the correlation between women business ownership and the overall Index scores revealed that markets residing above the expected index trend line such as Australia, Singapore, Vietnam and Bangladesh are capable of not only making use of the opportunities and resources available to them, but are thriving better than their other regional peers in their progress as female business owners. In contrast, women in India, Taiwan and Malaysia are comparably less able to capitalize on the resources available to pursue business ownership.
We demonstrated that women’s inclination to be or ability to thrive as entrepreneurs tends to vary depending on the strength or weakness of the “Supporting Conditions” component in their local environments and related this to New Zealand, Australia, Singapore and Taiwan (markets among the top six) where the most favorable and accommodating conditions shaping women’s entrepreneurship are found. It is also observed that the two components in each market are not always positively correlated. This was especially evident in the markets of Taiwan and Japan where supporting conditions are strong but the level of advancement and entrepreneurial factors are markedly weaker.
We drew upon research findings from various sources such as the Global Entrepreneurial Monitor (GEM), GEDI-Gender Index 2014 Reports and BNP Paribas and noted the implications for policy makers, private institutions and stakeholders with vested interests to advance women entrepreneurship. For those women who have succeeded, they should be recognized and their success stories shared. For those who aspire to be entrepreneurs or play a more active and visible role in the society and economy as business leaders or politicians, a more concerted effort geared work towards developing and strengthening the enabling conditions of women’s entrepreneurship such as labor factors and economic drivers must occur. We concur with various research reports that unleashing the greater potential of women entrepreneurs will require time, targeted effort by various stakeholders, resources and most importantly, confidence and inner drive within women themselves in their ability to take on the roles, challenges and risks entailed in entrepreneurship.
It is also clear from the findings that while the degree of effort and support from governments, not-for-profit organizations, communities and private sectors will vary, the one thing that is common is the tremendous leverage that may be gained by expanding and reinforcing the ability for women to be attached to strong and relevant networks as one of the most enabling condition to drive women’s entrepreneurship.
 VanderBrug, J. (2013) “The Global Rise of Female Entrepreneurs”, Harvard Business Review, September 4, 2013. [Available Online]: https://hbr.org/2013/09/global-rise-of-female-entrepreneurs
 Theoretically a score of 100 is only possible if all of the 10 indicators reach 100. While this is possible for some of the indicators like women’s workforce participation, or percent of females with a debit card; it is only theoretically possible for other indicators like percent of women in parliament (and very improbable)
 International Labour Organization (2014) “A quiet revolution: Women in Bangladesh”, 29 Jan 2014, [Available Online] www.ilo.org/global/about-the-ilo/newsroom/comment-analysis/WCMS_234670/lang--en/index.htm
 Block, J.H. & Wagner, M.(2010) “Necessity and opportunity entrepreneurs in Germany: Characteristics and earning differentials”, Schmalenbach Business Review, April 2010, pp.154-174, [Available Online]:http://www.sbr-online.de/pdfarchive/einzelne_pdf/sbr_2010_apr_154-174.pdf
 Thompson, P. (2011) “Necessity and Opportunity Entrepreneurs through the Business Cycle”, Florida International University, April 2011, [Available Online]:www.peterthompson.gatech.edu/uploads/images/Papers/nec-opp.pdf
 Block, J. & Sandner, P. (2009) “Necessity and Opportunity Entrepreneurs and their duration in self-employment: Evidence from German micro data”, The German Socio-Economic Panel Study, SOEP Papers on Multidisciplinary Panel Data Research, Berlin, May 2009. [Available Online]:https://www.diw.de/documents/publikationen/73/diw_01.c.98689.de/diw_sp0191.pdf
 The “Co. of Women” is a community, support and learning organization for women entrepreneurs that focuses on success and how to achieve more of it. It was founded to connect and champion women entrepreneurs. Website: www.coofwomen.biz
 The “Women as Entrepreneurs” (WE) is the leading organization in Australia for female entrepreneurs created with the vision to build, support and promote the Australian national community of like-minded aspiring and accomplished female entrepreneurs. Website: www.womenasentrepreneurs.com.au
 The Glass-Ceiling Index is a compilation by The Economist to show which markets provide the most conducive workplaces where women are able to obtain equal treatment. The top 5 markets out of the total 26 include, by order, New Zealand, Norway, Sweden, Canada and Australia.
 Kiwi Connect, Global Entrepreneurship Week: Celebrating our women entrepreneurs, “So what can we do to help”, Nov 16, 2014, [Available Online]http://www.kiwiconnect.nz/blog/2015/1/22/its-global-entrepreneurship-week-lets-celebrate-our-women-entrepreneurs
 “Access to Trade and Growth of Women’s SMEs in APEC Developing Economies”, The Asian Foundation, U.S. Department of State and Asia-Pacific Economic Cooperation (APEC), 2013, Published by Policy Partnership on Women and the Economy (PPWE), [Available Online]: http://publications.apec.org/publication-detail.php?pub_id=1388
 “Bridging the Entrepreneurship Gender Gap: The Power of Networks”, Boston Consulting Group, 2014, Available Online:https://www.bcgperspectives.com/content/articles/business_social_sector_investing_impact_bridging_
Tagswomen entrepreneurs, Asia Pacific, Women
2. OVERVIEW OF KEY FINDINGS
2.1. Expectations of Women’s Progress as Entrepreneurs
2.2. Supporting Conditions Vital in Driving Women’s Entrepreneurial Progress
2.3. Necessity and Opportunity Entrepreneurs
3. COUNTRY OVERVIEW
THAILAND (3rd), PHILIPPINES (4th) & SINGAPORE (5th)
TAIWAN (6th), HONG KONG (8th) & SOUTH KOREA (9th)
CHINA (7th), INDONESIA (10th) & VIETNAM (11th)
JAPAN (12th) and MALAYSIA (13th)
INDIA (14th), SRI LANKA (15th) & BANGLADESH (16th)