Human capital development remains a critical area for investment and cultivation for governments. Creating a vibrant economy requires investment in education, skills and capacity-building for an entire population across socio-economic levels.
Among the key contributors to robust, sustainable economic growth are the micro- and small business entrepreneurs and own account workers. In these sectors, female entrepreneurs are an important part of this equation. Yet significant economic barriers often prevent them from expanding their networks and knowledge, which could be leveraged to fundraise, innovate and grow.
In general, women have fewer years of education than men, which affects their ability to conduct businesses effectively. To build an effective business, entrepreneurs require a certain level of financial, management and leadership proficiency and knowledge of their market and their product. Some of this expertise can be obtained through quality education.
Skill-building, training and capacity building
As with education, women face specific challenges to build the necessary skills and capacity to grow their businesses. Gender-specific trainings can successfully address the challenges female entrepreneurs face and provide support for the multiple constraints on their business activities. Training for female entrepreneurs that focuses on strengthening socio-emotional skills such as assertiveness, leadership, motivation, self-confidence, resilience and risk propensity has been shown to have a positive impact. A holistic approach that strengthens both hard and soft skills is essential to enable women to create businesses that sustain and grow.
Social networks influence entrepreneurial opportunities. Having strong ties to individuals with skills, knowledge and connections of their own can give nascent entrepreneurs a strong starting point. Typically, however, women have smaller networks with fewer economic ties than men. Strong ties and broad social networks can provide an array of opportunities for entrepreneurs, and can influence access to credit, the sharing of information about new market opportunities and learning and the application of new business skills. In addition to an increase in profits, women in networks show greater risk-sharing behaviors.
Building skills and networks that focus on women’s entrepreneurship can foster the growth and sustainability of their enterprises. Interventions should consider:
- Layering the interventions on top of financial inclusion programs can lead to greater success and better outcomes for women-run enterprise;
- Including capacity building for soft skills in conjunction with hard skills; and
- Include socio-emotional tools that are essential for women to succeed in and change currently male-dominated spheres.
With the successful implementation of these initiatives, women will be able to improve their household and community incomes, as well as help close gender inequality in entrepreneurship and the larger economic landscape. It is just as essential for women to have access to formal networks and mentors, as they are critical to the longevity and growth of an enterprise. However, all of these initiatives are harder to implement when there are deficits in public education, literacy and numeracy. Thus, it is essential that these initiatives leverage universal quality education for youth, regardless of gender.
It is not surprising that prominent initiatives such as the Women Entrepreneurs Finance Initiative (We-Fi) and the Women Global Development and Prosperity Initiative integrate training, capacity-building and mentorship programs into their programming. However, mentorship and networking investments cannot be short-term. Building and sustaining the fabric of these interactions and networks produces stronger and more lasting results. Donors and governments must be prepared to stay the course and invest over longer periods to help overcome the systemic barriers that isolate women entrepreneurs and to make entrepreneurship and own account work a matter of choice and not the employment of last resort.