Women Entrepreneurs: The Engine Of The Latin American/Caribbean Powerhouse
Latin America and the Caribbean has made the headlines several times in 2016 for the meteoric rise of many of its entrepreneurs. Now a new regional report from the Global Entrepreneurship Monitor (GEM) shows that at the heart of this growth is an even more rapidly growing sub-sector of businesspersons: the regionâ€™s women.Â
The latest Global Entrepreneurship Monitor (GEM) special report on Latin America and the Caribbean (LAC), has revealed better indicators in terms of gender parity than found in other regions. In 2015, eight women were engaged in early-stage entrepreneurship for every ten men, and in Peru, women report higher levels of early-stage entrepreneurship than men.
According to Mike Herrington, Executive Director of GEM, the finding is significant because it might herald a much-needed shift in gender parity in entrepreneurship globally. â€śLAC is the exception. Across the globe, men are more likely to be entrepreneurs, and this applies regardless of the regionâ€™s level of economic development,â€ť he said.
â€śThis research demonstrates the immense entrepreneurial potential of Latin American women. Their ideas and business acumen are playing a key role in the growth of emerging Latin economies. Not surprisingly, this year the Women Innovating Now (WIN) Lab Miami cohort includes 45% Latin American women founders. At WIN Lab, we are dedicated to catalyzing this entrepreneurial capacity and scaling Latina-founded businesses,â€ť said Heatherjean MacNeil, Global WIN Lab Director.
â€śExtensive research from GEM and others has shown consistently that women face greater difficulties becoming entrepreneurs,â€ť said Herrington. â€śObstacles include greater domestic responsibility, lower levels of education, particularly in developing countries; fewer female role models in business; fewer business-oriented networks; lack of capital and assets; lower societal status; and cultural obstacles such as a lack of confidence or assertiveness. These factors may affect the likelihood of women perceiving opportunities as well as acting on them.â€ť
The LAC context plays a role, and nuances are important said Herrington. Latin America has distinguished itself as a region to watch. There are at least six companies valued at over $1 billion, reports The Next Web, and a countrywide survey of Argentines revealed that around 60% of working-age citizens considered entrepreneurship a great career choice. However, the World Bank also notes that 60% of Latin American employees work for a business with five or fewer employees, so although start-ups are common, growth frequently stalls.
GEM notes a possible reason for this. Although since 2003, LAC recorded a level of economic performance similar to Africa and surpassed only by Asia, an external market adverse to commodity exporters â€“ and falling commodity prices â€“ has meant businesses will need to rely more on innovation to keep growing. But innovation levels in the region are low.
â€śHereâ€™s where it gets interesting. Despite the regionâ€™s low scores in innovation overall, the GEM special report on Women in Entrepreneurship earlier reported that the rate of female entrepreneurship rose by 6% worldwide in two years; and that female entrepreneurs in half the countries surveyed were as innovative as, or more so than, their male counterparts.
â€śEnabling more women entrepreneurs in a very real sense may well be a key component of enabling greater innovation in an economy,â€ť said Herrington.
In the LAC region specifically, a number of initiatives are underway to drive innovation among women: increasing access of women to technology in order to achieve the Sustainable Development Goals (SDGs); strategic alliances are also being built to accelerate growth where it matters, particularly among small businesses. Initiatives like the Global Innovation Exchange link funders and innovators, with a focus on empowering women in the region. Next Billion, an initiative of the University of Michigan, notes that investing in women has had a profound effect on the LAC region.
â€śFemale entrepreneurs demonstrate 35% higher return on investment than their male counterparts,â€ť writes Maxwell Kangkolo, â€śand 61% of entrepreneurial enterprises with five or more women executives are successful versus 50% overall. The data clearly showcase the positive ripple effect that women entrepreneurs have on their local and regional communities.â€ť Innovation in the LAC region is a powerful force among its female entrepreneurs.
â€śThereâ€™s a gap for innovation, and initiatives are under way to help women fill it â€“ all while driving greater equality and economic growth,â€ť â€ť said Herrington. â€śIs it just us, or does that sound like a win-win?â€ť
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The Global Entrepreneurship Monitor is the world’s foremost study of entrepreneurship. Through a vast, centrally coordinated, internationally executed data collection effort, GEM is able to provide high quality information, comprehensive reports, which greatly enhance the understanding of the entrepreneurial phenomenon. GEM is a trusted resource on entrepreneurship for key international organisations like the United Nations, World Economic Forum, World Bank, and the Organisation for Economic Co-operation and Development (OECD), providing custom datasets, special reports and expert opinion. These bodies leverage GEM’s rich data, tried-and-tested methodology and network of local experts to promote evidence-based policies towards entrepreneurship around the world.
For more information: www.gemconsortium.org
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