The use of quotas may seem like a blunt instrument, but it should be seen as a stopgap measure until cultural and business mores have evolved sufficiently and women can take their rightful place on the executive floor. When Norway introduced boardroom quotas nearly 10 years ago, the policy was controversial. Yet it has generated results. In 2003, only 7.3 percent of Norwegian board members were women. By 2006, the number had increased to 21 percent, and today it is nearly half. As with credit, simply leaving this issue up to market forces is not likely to result in a more equitable split between men and women.
Lack of support for entrepreneurs. Finally, female business owners need structured support. The challenges they must overcome to succeed are so widespread and numerous that they cannot make it alone. In developed economies, they need access to energy and technology. In developing markets, they need training in basic business functions.
Networking is another critical aspect of this support, and one that often requires concerted efforts from both the public and private sectors in developing economies. A Booz & Company survey of 175 entrepreneurs in Saudi Arabia found that more than three-quarters of respondents received no encouragement from teachers or mentors to start their companies. Perhaps predictably, among women entrepreneurs, 60 percent of companies were in a handful of sectors where women traditionally launch startups: retail, service, and education. Recent changes in Saudi laws now allow women to invest in higher-growth areas such as real estate and construction, yet if they are to succeed in these fields, they will need access to networks and contacts.
There is no one perfect solution that will boost female entrepreneurship, yet a number of measures can help. Governments can give priorities to women-owned businesses for procurement contracts. Companies can take similar steps to ensure they have a diverse supply chain. Successful women can mentor their younger counterparts, and female investors can provide or lend capital to promising young women with good ideas for new companies.
The women of the Third Billion have the potential to become a tremendous economic force in global markets over the coming decade. The countries and companies that can harness this force and economically empower women—as employees, entrepreneurs, and executives—will gain a clear edge.
If the social benefit of economically empowering women is not sufficient rationale to act, the sheer business opportunity should tip the scales. As Caroline Anstey, managing director of the World Bank, said at a women’s entrepreneurship event in 2011, “Gender equality is good in and of itself, and it is smart economics. But [equality] alone never seems to convince anyone.” The findings of the Third Billion Index provide a set of operating instructions for how to go about economic empowerment: education for girls, policies that give women access to work opportunities if they choose to take them, and support for entrepreneurs. These measures represent investments for the future—not just in women, but in stronger, more prosperous businesses and societies.
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- DeAnne Aguirre is a senior partner with Booz & Company based in San Francisco. She leads the firm’s work on organizational and talent effectiveness.
- Leila Hoteit is a principal with Booz & Company’s Middle East public-sector practice, where she focuses on human capital development.
- Karim Sabbagh is a senior partner with Booz & Company and the leader of the firm’s communications, media, and technology practice in the Middle East. He is also chairman of the Ideation Center, Booz & Company’s think tank in the Middle East.
- Also contributing to this article were Booz & Company partner Christine Rupp, senior associate Joanne Alam, and senior research analyst Mounira Jamjoum, contributing writer Jeff Garigliano, and former Booz & Company senior editor Melissa Master Cavanaugh.
- The not-for-profit La Pietra Coalition maintains a website on the Third Billion Campaign: www.thethirdbillion.org/.
- For the Booz & Company Third Billion Index, see booz.com/global/home/what_we_think/third_billlion.