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Follow up chapter on analysis of the women entrepreneurs in india

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  • 1. MRIDULA VELAGAPUDI Assessment Of WomenEntrepreneurship In India Follow-up chapter to the Book“WOMEN ENTREPRENEURSHIP: Role Of Women Entrepreneurship Towards More Inclusive Economic Growth” Mridula Velagapudi http://mridulavelagapudi.blogspot.com 4/30/2011This paper is a follow-up chapter to my book “WOMEN ENTREPRENEURSHIP: Roleof Women Entrepreneurship Towards more Inclusive Economic Growth”. It is anessence and shows the data analysis done around the factors that drive or inhibitWomen Entrepreneurship in India.© Mridula Velagapudi
  • 2. SOME REVIEWS FOR THE BOOK “Mridula, Template for the interview is good. It covers a broad range of subtopics involved in entrepreneurship without losing focus on the real issues. Domainselection is also well balanced. As presented, starting from "home services", selling homemade products, offering financial advice, consumerism to waste management, the materialprovides, for a new comer to entrepreneurship or just to study the field, a good beginning. One of the important things that it brings out vividly, in almost all the interviews isthat, a solid (backstage at home) support is required to keep the focus on the work; in thiscase running the business. As one author puts it (in one of the last interviews), there is nobalance, one has to sacrifice a lot in one place to get success in other places. Of course, infew cases luck has played its role too. If only you could have collected more details, I mean data points in terms of hoursput in; number of employees, approx. investment etc. this study could be publishedacademically as well.There were some grammatical errors in quite a few places. No one is perfect. Pleaseminimize them. All in all a good work.” - Dr. Rengarajan Seshadri, Ph.D, Head Core Development, SemanticInsights "Mridula, your book inspires current entrepreneurs and budding entrepreneursalike. Especially liked the Preview of each segment which gently drew me into the followingchapter hungry to read and learn about the next story. The business models and segmentschosen are very interesting and are sure to inspire a lot of women sitting on the fence. Themaverick women in me had always thought about taking the entrepreneurial plunge;reading your book has most certainly reassured my belief." - Shilpi Sharma, Budding Entrepreneur, ex-Relationship Manager, Mahindra Satyam “Initially I was a bit hesitant to read the book, given the lack of perceived relevancefor me and the title reminiscent of a doctoral thesis. And as I started reading through it, thehesitance gave away - bit by bit (Bullet points, and shorter paragraphs would haveaccelerated the de-hesitancy bit; but then one cant have it all). The prologue could have been a trimmed more than a bit, as well as intros into eachof the 19 cases. The set up was good, drawing the reader into each of the cases in ameaningful manner, than they appear to be on a cursory glance. The questions are to thepoint, charming the protagonists into laying out their experience and wisdom out there forthe reader to profit from. The fields chosen are diverse and interesting; most apt for a singleindividual with possibly fewer resources (time, money, capital inputs) but with a sound ideaand unbridled passion to bring it life and make it succeed. It may not be completely educative in terms of how to go about setting up businessfrom scratch to success - but is inspiring enough to make a hesitant entrepreneur to takethat first step. As Anjana Vivek mentions in her interview - "The main challenge for me ismy mind-set, to go ask for work and then ask for money". Practical aspects like these -sprinkled across pages are what make it worthwhile to read through. I hope, though therewill be a 2nd edition, one which is more engrossing as this one is educating and earnest inits attempt. Pictures of the entrepreneurs (if permitted) or their company logos (or just plainbusiness card - to ignite the passion in one) will definitely add to the interest quotient andmake the reading easier.
  • 3. As of now, break a sweat and buy the book. Dont wait for the bells and whistles togoad you. For, if you are waiting for inspiration beyond an honest portrayal of every personlike you who has taken that definitive step towards pursuing their goal - no book or wisdomwill be good enough!” - Arun Vemuri, Partner-Business Planning, Mindshare "This book is an idea whose time has come. Never before in human civilization havewomen been equal partners not just in raising family, but in powering economicdevelopment. In the past, if women took to entrepreneurship, it was simply to supplementfamily income. But today, even women can have game changing ideas and can be as muchof trail-blazers in building highly successful enterprises. Even Mompreneurs are not just„livelihood‟ entrepreneurs any more, content with just starting at home something to „keepthemselves occupied‟ but are serious surplus creators. This book captures and glorifies thewealth- creating spirit of women entrepreneurs." - Prof. Nandini Vaidyanathan Alumnus, The London School of Economics & Delhi School of Economics Co-founder & Mentor, CARMa Venture Services “….What Mridula has managed to do is bring out consistent threads of information viaher questions from each entrepreneur she spoke with. One can see some patterns emergingthrough the book……..Books like these play an important part in highlighting streaks ofinnovation and change, which typically get little attention in mainstream writing. Overall aneasy and simple read especially for anyone interested in the subject.” Read the full review. - Pluggd.In, India’s Leading online directory on Start-ups
  • 4. ASSESSMENT OF WOMEN ENTREPRENEURSHIP IN INDIA I decided to publish this follow-up chapter based on suggestions fromreaders and on my own keenness to bring out the critical analysis of the womenentrepreneurship situation in urban India vis-à-vis the international arena. If youread my book with this chapter in the backdrop, you will appreciate why I havewritten the book and understand that there is more than just a ray of hope for„women entrepreneurship‟ to advance in India. I have tried to give comparativeanalysis supported by data. But before I start to present the comparative analysis, Iwould like to specify the substance of my book. My book brings out the importance of some key facts after reading theinterviews of the 19 women entrepreneurs. I want readers to understand and learnfrom the stories of these 19 women – adopt the positives (advantages) and explorehow to improve upon the negatives (obstacles). There are four points which standout in my book: 1) It is not necessary that a woman should have a career as defined and as streamlined as their men counterparts, mainly due to the fact that women have to balance motherhood also with their professional career. It is important that women understand that they can start their entrepreneurial journeys based on their comfort level with the stages of their family lives and the support system that they have. Some women may have their parents or in-laws living close-by or with them. For such women, it may be much easier to pursue their dreams. On the other hand there maybe women who do not have a good support system and may have to start their career after the kids grow up. My book covers stories of 19 women who have started their entrepreneurial dreams at very different stages of their lives. 2) There are many opportunities to start small businesses which can usually be started as bootstrapped businesses. It is important to look for such opportunities. Small and medium sized businesses are getting more importance in the wake of the recent recession. Clusters of growing SMEs/SMBs can hold the economy to the ground by generating many different types of jobs and not create a job monopoly as is done by behemoth organizations. A fall of such few big organizations can lead to severe job erosion, which can further lead to recession - a fact witnessed by many in the recent global financial meltdown. 3) It is true that entrepreneurship is needed for robust economic growth. It is also true that women are the economic force which has still not been tapped to its full potential. So it is important to induct them also into entrepreneurial culture, with focus on their specific needs. This book will help women in understanding how to spot opportunity gaps. It has industry snippets followed by a story of a women entrepreneur. It is interesting to read these stories in the backdrop of short industry analysis of diverse segments
  • 5. and understand the possibility of creating a business viz-a-viz such segments where opportunities exist. 4) My effort here is to encourage entrepreneurship as an opportunity to create a value-added business; and not as a necessity, which is typical in case of rural entrepreneurship or street entrepreneurship – self-employment chosen by women out of poverty or other necessity. My focus is to encourage entrepreneurship in the urban highly educated women; to encourage opportunity women entrepreneurship; to choose entrepreneurship when alternate lucrative employment options exist. The industry snippets in my book followed by relevant stories of women entrepreneurs encourage other women to take entrepreneurship in diverse segments as opportunities for creating wealth. It encourages them to think creatively and look for possibilities beyond the typecast self-employment of opening a garment boutique or conducting subject-wise home tuitions in the traditional way. 5) Women as entrepreneurs add to the diversity when it comes to starting businesses as well as offering solutions. Importance of including this diversity is felt much strongly especially after the recent recessions and is being further explored across the globe. My book highlights technically “Why Women Entrepreneurship” and hence shows how women entrepreneurship is important for an inclusive economic growth. It is very clear from the 19 cases of the women entrepreneurs, that almost allof them have fabulous family support. By family support I mean the support thatthey receive either from their parents or their in-laws for managing the show backat home, managing the household and the kids. To be specific, women have a verygood system of “joint family” culture to bank upon in India; not to forget thesupport (moral and hands-on) extended by their spouses and the cheap labouravailable in the form of domestic help such as aayas, nannies and cooks. Thefollowing graph will give you a better picture of this fact: 12 Number of Women Entrepreneurs 10 8 6 4 2 0 Joint Family (In-laws or Nuclear Family No Kids in the family parents living together) Figure 1
  • 6. Out of the total cases 52% (Figure 1) of women have family support wherekids can be taken care of by grandparents. Regarding co-founding their start-ups, majority of the women have either co-founded with their husbands or they have started it alone. 9 8 7 6 5 4 Series1 3 2 1 0 Anyone from Spouse as Co- Friend as Co- No Co-founders immediate founders founders (Founded Alone) family Figure 2 Around 42% of these women entrepreneurs started their ventures alone and31.5% of women co-founded their start-ups with their husbands. If we combine thetwo categories – „spouse as co-founders‟ and „Anyone from immediate family‟, wefind that it also accounts to 42%. On the funding side, it was clear that out of the 19 women entrepreneurs, allof them have self-funded their businesses. Whereas it is good to start with ownfunds and bootstrap your venture, but not every woman might have enough fundsto go beyond kick-starting their ventures or businesses. Do we have enoughinvestors‟ interest in funding a company owned by a woman? This is an importantpoint to be probed further. In India women make up only approximately 15% of the entireentrepreneurial population. Out of this 15% a bigger proportion of womenentrepreneurship comprises of necessity-based entrepreneurship primarily fromrural India and of surrogate entrepreneurship where the businesses are registeredin the name of women but are run by men. In fact, India ranks quite high in overallnecessity-based entrepreneurship and ranks low in opportunity-basedentrepreneurship, according a GEM (Global Entrepreneurship Monitor) report. Remarkably a bigger percentage of women in the developed countries suchas USA, UK, Canada, Germany and Scandinavian (Nordic) countries take toopportunity-based entrepreneurship. In USA alone women entrepreneurs ownabout 40% of all the enterprises.
  • 7. According to Center for Women‟s Business Research, McLean Virginia, theoverall scenario by 2008-2009 shows that around 10.1 million firms are owned bywomen in the United States. These women-owned businesses constitute 40% of allthe privately held businesses. Out of these about 75% are majority women-ownedfirms. Moreover 3% of all women-owned businesses have revenues of $1 million ormore as compared to 6% of all men-owned businesses. The United States CensusBureau predicts that by the year 2025, the percentage of women entrepreneurshipwill increase to over 55%. It was reported in Canada‟s Labour Force Survey that in 2008 womenaccounted for about one-third of all the self-employed people. This means about33% of all the entrepreneurs were women as of 2008. Though self-employed herecould include people like franchise owners too, but for broader discussion I amincluding the data for self-employed people. As of 2007-2008, women accounted for about 27% of all the self-employedpopulation in UK. Similarly the Nordic countries have an average of 33% of womenas entrepreneurs out of total entrepreneur population. Women Entrepreneurs as Percentage of Total Self- employed Population between 2006-2008 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% France Germany US UK Canada Nordic India (Denmark, Finland, Iceland, Norway and Sweden) Figure 3 Many studies have been carried out in these countries to understand themotivation factors behind women taking up entrepreneurship. Most of such studiesreveal one of the following reasons to start their own ventures: 1. Self-actualisation 2. The need to be their own boss 3. Dissatisfaction with working for others 4. Increase in desire to control 5. Flexibility in work hours to balance work and family
  • 8. 6. Philanthropic commitment towards their communities and economy. Unlike India, much of the western world does not have the culture of livingin joint families. Nor do they have access to such cheap labour as aayaas, nanniesor cooks. So how is it that more women in countries like USA, Canada and UK areable to contribute by taking up opportunity-based entrepreneurship? Althoughmuch of the businesses owned by women fall under small businesses category,that is still commendable and encouraged as the small businesses definitely formthe backbone of an economy. The 19 cases presented in my book are actually carefully selected tohighlight that women entrepreneurship is possible in India in diverse industrieswhile making use of the „positives‟ of our society and economy. So, it brings me tocontemplate, if women can enjoy some benefits like that of family support in India,why is it that women (especially in urban India) constitute a very weak percentageas opportunity-based entrepreneurs when compared to those in the Western world?India, being a developing nation with economic growth rate hovering in the range of7.5%-9%, poses many entrepreneurial opportunities in almost all segments. Isthere some serious issues which should be sorted out so that more women inurban India take up entrepreneurship as a career? Some of the prominent issues which I think of are subjective in nature.These are either inherent as personality traits or prevalent as attitude problems inour societal set-up. The observations below are based on my personal reflectionalso of many women who I have come across in last ten years of my life when I havetravelled and lived at many different places. Inherent Issues (Personality traits): 1. Lack of confidence and aggressiveness to pursue big business. 2. Lack of motivation and complacency post marriage. Although many women gain professional education and pursue a job career before they get married, many do not get back to work life simply because they lack the drive (even if they have family support). As far as entrepreneurship as career is concerned, it also takes a back seat especially when combined with point number 1 here. There is a severe lack of motivation as is evident from the fact that the contribution of professionally educated women towards entrepreneurship is lesser than that contributed by self-employed women, driven towards entrepreneurship out of necessity. 3. Content with small turnover businesses which can be run from home such as selling ethnic wears and other household décor materials. Many women just stick to the age old formula of selling ladies and children‟s wear and household décor stuff and as a result you will see a plethora of such home-businesses with no value add. In fact, even professionally qualified women forget to understand their own potential. They fail to ascertain other business opportunities that exist and which can also be pursued from home especially in today‟s
  • 9. era of enhanced broadband connectivity and social networking avenues. Acquired Issues (Societal bars): 1. Less encouragement from close family and friends and a mark of guilt that the kids will get ignored. Though the 19 cases published in my book “WOMEN ENTREPRENEURSHIP: Role of Women Entrepreneurship Towards More Inclusive Economic Growth”, have not hinted at any family conflicts as far as work-life balance is concerned, there are still many such households which may not have elders in the families with such modernistic attitudes that the women should be career-oriented. Entrepreneurship certainly is out of question as running a business is perceived as more time-consuming, though doing a job may still be permissible. (According to me this is not the case. My personal experience says that jobs can be extremely taxing too as far as personal life is concerned). 2. Less confidence shown in the business world by the men counterpart when a woman approaches for business or funding (attitude issues). Whenever a women-led company approaches another company (not woman-led) usually the deal is viewed with scepticism. This is so because people have lesser confidence on women‟s abilities to carry on a business. 3. Even the external investors are shy of investing in women-led entrepreneurial ventures (though I do not have any data to support this at this point in time). Opportunity women entrepreneurship has shown growth albeit slowly. Tofurther encourage it in urban India, I would highly recommend following threethings: 1. Provide specific mentorship to women as they have different challenges at different stages of life. 2. Focus on developing entrepreneurial skills right from the college level. Introduce special Entrepreneurship courses and/or workshops to enhance leadership skills and self-confidence. 3. Self-educate and educate others regarding giving freedom to women as far as raising family is concerned. They should be able to decide what they want and when they want, without feeling obligated. 4. Establish business women‟s alliances for more women to collaborate and network with each other and inspire more women towards taking up opportunity entrepreneurship. 5. Establish mentorship which involves successful women entrepreneurs as role models.
  • 10. References Dimakopoulos, V. (2010, January 12). Women’s Entrepreneurship: Opportunityor Obligation?, Women’s forum for the economy & society. Retrieved fromhttp://www.womens-forum.com/media/pdf/2010_BS_Women_Entrepreneurs_BackgroundDocs.pdf How many small business owners are women?. (2011, April 20). IndustryCanada. Retrieved from http://www.ic.gc.ca/eic/site/sbrp-rppe.nsf/eng/rd02504.html The future of the global economy: women. (2010, October 15). WomenEntrepreneurs Grow Global. Retrieved fromhttp://womenentrepreneursgrowglobal.org/2010/10/15/the-future-of-the-global-economy-women/ Some facts about women entrepreneurs. (n.d). Go4Funding. Retrieved fromhttp://www.go4funding.com/Articles/Entrepreneur/Some-Facts-About-Women-Entrepreneurs.aspx Harding, R. (n.d). State of women’s enterprise in UK. Prowess. Retrievedfrom http://www.prowess.org.uk/documents/StateofWomensenterpriseintheukfinal.pdf Damwad. (2010, August). Women entrepreneurship – a Nordic perspective.Nordisk Innovations Center. Retrieved fromhttp://www.nordicinnovation.net/_img/women_entrepreneurship_final_report_web.pdf Welter, F. (2004, May 27). Women entrepreneurship in Germany and access tocapital. Institutet för entreprenörskaps- och småföretagsforskning. Retrieved fromhttp://www.esbri.se/oh_estrad/estrad__(fw_27_5_04).pdf Conceptual framework. (n.d). United Nations ESCAP. Retrieved fromhttp://www.unescap.org/tid/publication/indpub2401_chap2.pdf Mishra, S.P. (1996, November). Factors affecting women entrepreneurship insmall and cottage industries in India. International Labour Organization. Retrievedfrom http://www.ilo.org/public/english/region/asro/bangkok/paper/fac_ind.htm