Learning from Womenonmics

Japan Prime Minister is best known for his economic revival strategy consisting of three arrows, collectively called Abenomics. His three arrows consisted of expansionary monetary and fiscal policies (the first two arrows) and structural and economic reforms (the third). This third arrow consisted of deregulation, trade liberalization, tax reform and industrial restructuring.

An important component of the third arrow was “Womenonmics”, getting more women into the workforce and in positions of leadership. Japanese women are highly educated on average, and indeed have a higher college enrollment than men. Japanese female participation rate has risen to 73% - slightly ahead of the US, it is still far below Sweden’s 88.3%. A recent government survey showed 63% of women quit their jobs disappointed by their career prospects. 70% of the women are not able to return to the workforce after the birth of their first child. The reasons include non-availability of quality childcare centres.

Female participation is crucial for Japan, since its population is declining and also ageing rapidly. The elderly will make up 40% of the total population by 2060, and the ratio of working to retired persons will be 1:1 by 2050. Unless women participate in much greater numbers to expand the workforce, the pension and tax burden will be crushing and will affect economic growth. Realizing this, Abe put in place numerical targets and tangible metrics in his “Womenonmics” strategy. He initially aimed to have 30% of leadership positions for women in government and business.

The “Womenonmics” plan also contains reforms like removing the tax penalty for working mothers, and introducing new training subsidies to help them return to the workplace. Even though India is not in the OECD peer group, there are lessons from Japan “Womenonmics”. The Indian parliament recently passed a landmark maternity benefits bill, which will benefit women returning to the workforce.

Beyond education, skilling, pay parity and board positions, India’s agenda also includes providing women leadership positions in political life. The recent violation experience in Nagaland, wherein the local community refused to let women enjoy 33% reservation in local government shows how far we have to go. This resistance to even constitutional mandates shows that there is as much a cultural hurdle as an economic policy hurdle to achieving progress for women.

Barriers & Panacea to Women Entrepreneurship

Women today play multiple economic roles in our society. They are consumers, farmers, labourers, teachers, bankers, innovators, scientists, pilots and astronauts. Many are self-employed while some are turning entrepreneurs. Entrepreneurship provides the most powerful economically empowering avenue for the women, for the community and the nation. But according to a report, it is estimated that globally there are only roughly 9.34 Million women owned formal small and medium enterprise in over 140 assessed countries.

The above data is very small. So why there are so few women Entrepreneurs? In my opinion, the four main barriers to women becoming entrepreneurs are these. The first set of limiting factors is intrinsic i.e. within the self and family. Most educated women are turned to take up jobs; it is easy and lends the stability of a fixed salary. But with more women leaders coming to the forefront on corporate boards and as entrepreneurs, like Indira Nooyi, Chanda Kochar, and Kiran Majumdar Shaw hopefully all intrinsic pressures will slowly fade away.

The second set of problems is the most critical. These include lack of access to resources like credit, technology and markets. Lack of access to formal, easy, collateral free, and transparent financing for women start-ups is a major problem area. Women also lack access to latest technologies that could enable them to climb up the value chain. The third factor that is a hindrance is that women are not always equipped with adequate knowledge and skills to tap opportunities. They lack exposure to practical aspects of running a business.

The fourth issue is that of networking. Creating wide and sustainable network of women producers and consumers is essential to build and nurture women entrepreneurship. There are many corrective measures to increase women entrepreneurship in India. Increase the volume of women support systems like child care and family support. Enlarge upon development and capacity building processes for soft skills, technology and management skills.

Amplify mentoring and market linkage to support for women owned enterprises through networks like women entrepreneur associations. Simplify the external entrepreneurial ecosystem by enabling ease of doing business. Make simpler government schemes eligibility criteria, documentation and clearance mechanisms. Bring in smarter technology and better inter-departmental coordination to enable simpler, faster, transparent and effective service delivery for women start-ups.