APEC Sheds Light on Economic Constraints for Women

An APEC study casts a spotlight on what factors potentially hold women back in growing as entrepreneurs.

When a woman entrepreneur is presented with an economic opportunity, what considerations and decision points allow her to seize it? The answers to this question are the focus of a recently-concluded APEC study that will support APEC’s efforts toward an inclusive economic growth in the region.

To better understand how to create conducive policy environments for equal economic opportunities, the study looked into gender-related constraints faced by women business owners. It found that the lack of options for child care, inadequate access to capital, and the nature of motivation to venture into business are key factors worth further examination in order for economies to provide support for women to succeed and grow as entrepreneurs.

“The more we understand precisely what holds women back, the greater our ability to propose policies at APEC that work for all,” said Carlos Kuriyama, senior analyst for the APEC Policy Support Unit who led the study.  “An inclusive economic environment is one where both men and women can take advantage of opportunities to grow as entrepreneurs or as professionals.”

The current picture of women in business

The study finds that women own approximately 38 per cent of small businesses across the Asia-Pacific, with one economy as an exception—in the Philippines, 68 per cent of small businesses are owned by women.

Huani Zhu, a researcher who worked with Kuriyama on the study, said that the findings will help APEC push for policy actions that are designed to resolve issues that have long plagued women entrepreneurs.

“Many emerging economies have limited means for developing their small and medium enterprise (SME) sector,” said Zhu. “It is hard for these economies to keep an engaged attention on the huge benefits of addressing the gender issue.”

“The study gives us a great picture of the types of economic activity in which women are most heavily engaged,” explained Kuriyama. For example, small businesses owned by women are heavily skewed towards the services sector. “These businesses account for about 65 per cent of female-owned SMEs — a far higher proportion than for men.” Kuriyama pointed out.

Financing a top barrier

“While there are cultural and societal factors that prevent equal access to resources, laws also play a big part in restricting women’s access to finance,” said Kuriyama.

“Restrictive inheritance laws are a good example of this type of barrier.  The practical effect is that these laws prevent women from using land as collateral when applying for loans,” says Kuriyama. “In some economies, women are unable to apply for credit without authorization from their husbands.”

The study found that across APEC, only 45 per cent of economies guarantee the rights for men and women in terms of access to land, 60 per cent guarantee equality for access to non-land assets, and only 21 per cent guarantee equal access to workplace rights.

“Because of this, women small business owners tend to turn to non-bank institutions, such as microfinance organizations, to gain capital,” said Kuriyama. “With this insight into the financing challenges, APEC can highlight the laws that restrict equal access to capital and hopefully encourage reform.”

Necessity over opportunity

Another surprising finding in the study is that more women venture into small businesses out of necessity rather than women seeing the business as an opportunity. This makes expansion and growth a secondary concern.

“In some economies, approximately 40 per cent of women who start a business said they did it out of necessity,” says Zhu. “Only one economy has more men starting necessity-driven businesses than women. In terms of motivation to start a business alone, there is a clear and absolute gender bias.”

According to Zhu, differences in motivation have direct impact on small business and trade. Small business owners who are motivated by necessity are far less likely to internationalize their business.

The domestic factor

The report also confirms a well-known inhibitor to female economic engagement: domestic responsibilities. Data from the report highlights that across APEC, women spend far more of their time in unpaid work than men, including housework, on top of the time they devote managing their business. According to Zhu, this trend is consistent across developed and developing economies.

“Even in developed economies, women spend a daily average of two more hours in unpaid work compared to men,” said Zhu. “This opens up discussion on the role of childcare services. For example, an implication of this finding in the broader APEC agenda will be to explore policies that encourage domestic markets to engage in child-care provision.”

Sharing initiatives

To help APEC economies understand the different ways to pursue a gender inclusive agenda, Australia has led a sharing of pioneering initiatives implemented domestically to encourage small business owners to export.

“It has become clear that in economies where social norms prescribe less active economic roles for women, the relevant government bodies involved in gender equality play an important role,” said Zhu. “In economies where gender roles are less pronounced, trade-promotion agencies have a bigger role to play.”

For more information:

Ma. Lizbeth Barona-Edra | [email protected]