OECD-INADEM Interactive Workshop on Women Entrepreneurs
Opening Remarks by Angel Gurría
Mexico City, Mexico, 21 February 2018
(As prepared for delivery)
Minister Guajardo, Distinguished Guests, Ladies and Gentlemen:
It is my pleasure to open today’s OECD-INADEM interactive workshop on Women Entrepreneurs: Seizing the Benefits of Digitalisation and Globalisation.
Gathered here are some of the finest minds, the most dynamic entrepreneurs and the most talented business people, not just in Mexico but in the world. They are here to share their knowledge and apply their experience to designing policies that enable women as well as men to turn their dreams and ambitions into thriving entrepreneurial businesses. This is the frontline of inclusive and sustainable growth and we need a plan, a strategy, a roadmap. This is what we hope will come out of today’s policy hackathon.
Our societies and economies need women entrepreneurs
The contribution of women entrepreneurs to our economies and societies is essential. We need to tap the creativity, the dynamism and the innovation of all our entrepreneurs and aspiring entrepreneurs. We need self-employed women to be designing ground breaking products and services, heading up companies and anticipating the trends and needs of the future.
Some progress has been made. In a number of OECD countries, the self-employment rate of women has risen, which is welcome news. Between 2007 and 2016 in the Netherlands, it rose from just over 8.7% to over 12%. In the UK, it rose from 7.5% to just under 10%.
Countries have continued to support women’s entrepreneurship through women’s enterprise centres, tailored entrepreneurship training programmes, loan guarantees and microcredit. However, we have also seen many countries experimenting with new approaches to support women entrepreneurs, for example through programmes that match private sector investment.
The Aspire Fund for Women in Business in the UK has co invested GBP 12.5 million in high growth, women-led firms. And in the US, the skills-led “37 Angels” initiative teaches women about angel investing through workshops and case studies. The goal is to empower women investors and to increase investment in women-owned businesses.
These are welcome developments, but we are still facing big challenges in promoting women’s entrepreneurship.
Women entrepreneurs are still facing big challenges
OECD evidence has shown that women are less likely than men to be entrepreneurs. Only 10% of working women in OECD countries are self-employed, which is nearly half the proportion of men (17%). Female-owned businesses also tend to earn less than male-owned ones. According to the OECD’s Gender Policies Review of Mexico, earnings from self-employment are significantly lower among women and the earnings gap between self-employed men and women is almost 50%, one of the highest gaps in the OECD, where the average is around 33%.
There is still much to be done to address key barriers for all entrepreneurs in the regulatory environment, and in tax policies. We need to cut red tape for entrepreneurs, give a second chance to entrepreneurs facing a business bankruptcy, and ensure that tax policies create a level playing field for entrepreneurs. Some of these obstacles have a greater impact on women entrepreneurs; for example, in how welfare systems and household income tax systems work.
Unacceptable funding gaps are also widespread among OECD countries. For example, experience in the United States show that investors are 60% more likely to invest in male entrepreneurs even when the pitches are identical.
Women-operated businesses in the OECD are also less global, less likely to export, and less likely to engage in international business-to-business transactions. This is shocking!
We have to reverse these trends! Gender equality is not only a fundamental human right, it is also essential to ensure that growth is inclusive and that globalisation works for all. The OECD is working across many fronts to close these gaps and enable women to seize the benefits of the new economy.
Let me highlight three key areas.
The OECD is working hard to empower women entrepreneurs
First, we need to tackle harmful gender stereotypes. These affect women’s self confidence and career choices. On average in the OECD, less than 20% of new entrants to tertiary degrees in ICT are women. It’s hardly surprising that men are more likely to be working in the platform economy and are four times more likely to be ICT specialists. This gap must be closed. The OECD study, The ABC of Gender Equality in Education, recommends classroom strategies and teacher training to break down the stereotypes. The OECD is also working hard with Mexico through our NiñaSTEM PUEDEN project, to empower Mexican girls to pursue careers in STEM. Gabriela will be telling you more about this.
Second, we also need to provide women entrepreneurs with the right skill set. Only 37% of women in OECD countries believe that they have the skills to start a business, relative to 51% of men. The joint OECD-EU Missing Entrepreneurs reports and recent Policy Brief on Women’s Entrepreneurship provide analysis and recommendations to develop entrepreneurship training programmes and tailored mentoring. This advice has been applied in country-specific policy reviews of women’s entrepreneurship support, including in Ireland and Germany.
Last but not least, we need to ensure that women entrepreneurs can access the financial resources they need to realise their potential. For Mexico, this means tackling informality and promoting financial inclusion. The OECD’s 2017 Working Paper on Financial Inclusion and Women Entrepreneurship in Mexico found that, on average, women are about 56% less likely to be entrepreneurs in the formal sector and 63% more likely to be entrepreneurs in the informal sector, compared to men.
The OECD’s 2017 Economic Survey of Mexico recommends increasing the reach of current public programmes which facilitate access to low interest credit for women owned SMEs. It also highlights the importance of pairing targeted financing schemes with measures to boost skills such as financial literacy and access to support networks, including mentoring and professional advice or consultancy.
Ladies and Gentlemen:
It’s not just about removing barriers to female entrepreneurship, our societies also need to empower women in the same ways that they have empowered men. It’s about giving women the skills, the networks, the access to finance and capital and the confidence they need to grow their ideas into viable, prosperous businesses.
This is one of the most important things any country can do. To give you an idea, here in Mexico, meeting the G20 target to reduce the gender gap in labour force participation by 25% by 2025 could boost the country’s GDP per capita by almost 4 percentage points by 2025. If Mexico halved the gender gap, it could lead to a cumulative 8.7 percentage points increase!
With these numbers we begin to get an idea of the untapped potential being held back by discrimination, of the transformative impact that equality and inclusion could have on our economies and on the lives of women, of course, but of society at large.
So the stakes are high, but I am optimistic that with bright lights like you leading, we will find the way to having many more, better and bigger, women entrepreneurs. Thank you.