Perspectives around International Women’s Day, 2016 – Development, delivered sustainably, through profit
By Madeleine White
On International Women’s Day last year, I was in Kurdistan, addressing an audience of hundreds of men and women looking to celebrate the strides women had made in both Kurdistan and Iraq as a whole. This year I spent the day in the City of London participating in the launch of a new approach to Impact investment and then flew across to Munich to take part in a discussion forum that looked at the role corporations have to play in supporting growth in emerging economies. The week’s activities culminated in addressing Africa’s Economy Equality Gap in a panel discussion at the Commonwealth Africa Summit in London yesterday.
In 2014 World Economic Forum members identified inequality as the most likely threat to the global economy and today, despite an increasingly connected world, organizations are still grappling with ways to make economies more inclusive. I believe that business, from Micro to Multinational, has a critical role to play in advancing gender equality and wanted to share some of the discussions I have participated in on behalf of the Challenges Group and affiliated NGO Challenges Worldwide on the quest towards a new paradigm; development, delivered sustainably through profit.
At the heart of all the discussions was investment; ensuring money reaches the right people in the right way. I believe linking private sector energy to the on-the-ground expertise of NGOs and other eco-system intermediaries, such as Business Member Organisations, through networks and technology is a very sensible starting point (although it does demand a reconfiguration of some of the more traditional charity sector approaches). This type of technology, aptly represented by Challenges Marketplace, is able to contextualize investment and market readiness through digital reporting structures, allowing enterprises to demonstrate growth and performance over time.
ACRE (Access to Capital for Rural Enterprises) was launched in the City of London on International Women’s day. NGOs Christian Aid, Traidcraft, Practical Action, Twin and Challenges Worldwide have come together to create an environment through which investors can fund hand-picked SMEs needing long-term capital to expand their operations. At the launch, panelists from investment and aid backgrounds shared how ACRE not only created common ground for investors and enterprises; but also, how the NGO consortium addressed the early part of the growth pipeline by helping companies become investment ready. Alison Griffiths from Practical action, for example, shared how their involvement was based on facilitating changes in sectors seen as key to alleviating poverty – with individual businesses being the engine to drive growth.
In emerging economies, women are still seen to be amongst the most vulnerable sectors of society. Creating support that links potential entrepreneurs and women owned companies into a wider value chain is therefore an important part of the story. ACRE provides the bookends to this, capacity building at one end and investment at the other. However, sustainable and inclusive supply chains are an equally important driver of what must be a market-lead approach to community-led self reliance.
To illustrate this Munich based Think Tank Endeva led a discussion forum on 9th March. Under discussion was whether Corporate Impact Venturing (CIV) was achievable in a way that could be scaled – i.e. moving beyond successful individual programmes (such as Unilever’s Shakti Project) into scalable global models. The premise of CIV is that Corporations acquire or partner with inclusive businesses and so achieve social impact in order to gain footholds in new markets. With a portfolio of strategic investments at the BoP (Bottom of the Pyramid), corporations can hedge risks and may eventually absorb inclusive businesses to strengthen their operations and growth potential. For their part, inclusive businesses gain opportunities to scale and replicate their business models, attract additional funding, benefit from corporate business expertise, and advance their social impact objectives.
This CIV approach, of course, complements wider gender responsive procurement practices which have been seen as a critical opportunity for corporations to achieve innovation and growth. This can be aptly illustrated by Intel’s announcement of a $1b spend on supplier diversity and inclusion practices. However, access to finance and increasing market visibility only goes some way to facilitating equal opportunities for women in business.
This brings me on to the last event on my thought leadership ‘triple jump’ – the Commonwealth Africa Summit 13-17th April. I started my presentation by sharing some interesting data:
In their 2015 report Women In Business and Management the ILO (International Labour Organization) cites that, at moment, of the nearly 7 million women-owned SMEs in the formal sector in developing regions, 3.5 million are in East Asia and about 0.5 in Sub Saharan Africa -along with the fact that 95% of African start ups fail. With only 24% of African CEOs being women, a picture starts to emerge that suggests significant room for growth if gender mainstreaming were to be prioritized across the continent. In the World Banks’ recent Gender Equality, Poverty Reduction, and Inclusive Growth strategic report – robust, country level diagnostics were seen as critical – for example if the effectiveness of Kenya’s change to public procurement regulations to reserve 30% of government contracts for women, youth and persons with disabilities is to have the hoped for ripple effect.
I went on to cite the 2014 Goldman Sachs study which found that laws can be particular hindrances to women with entrepreneurial aspirations who seek autonomy and influence. In the ILO report a 2015 global study on laws is cited, which relates six areas crucial to setting up a business (accessing institutions, using property, getting a job, providing incentives to work, building credit and going to court). These points are critical areas of intervention for International Charities and other intermediaries looking to create a bridge from humanitarian interventions to sustainable communities.
For a bridge to work effectively it needs solid foundations. It also needs to be built where there is the greatest need as well as the closest point of connection. If we are to take that analogy further, it is here that technology can play an important role. To build a new construct or paradigm, that fits its surroundings, there needs to be a critical reflection on what works and why. With a particular focus on African enterprise development, Challenges hybrid people and technology model is the consolidation of 17 years experience of working with thousands of businesses in 40 countries around the world.
By tracking and analysing the operational, financial and impact performance of a social enterprises over time, Challenges Marketplace is able to reassure investment communities that an individual business is a good risk. By tracking hundreds of businesses in the same country or region (currently Uganda, Zambia and Ghana) the picture of a thriving ecosystem is created. Data points might include the number of women-owned businesses in the portfolio and indeed how they perform over time. This builds a visible track record, which in turn creates accountability.
If successful women-owned business are seen and their performance is measured, it is far easier for them to become an important part of an overall narrative – able to showcase a stable, forward-looking investment climate. Therefore, by fostering an ecosystem in which women are able to participate equally, Challenges technology allows sectors and even nations to become more investable. This increases employment opportunities and thus wider empowerment not only for women but for communities as a whole.
In the end, what people are really looking for is employment, not just a job. Women and men want to participate in a formal economy. The transformation of enterprises is led by the transformation of individual expectations. The transition point starts with an individual who believes that he or she can and then starts leading communities into building sustainable, inclusive economies. At the moment a disproportionate number of women believe that they can’t. By linking human dignity to economic need we transform the aspirations of women and indeed whole nations.
At yesterday’s CAS panel discussion, HE Solomon Dalung, Minister for Youth and Sports for Nigeria stated that:
“Our institutional problem in Africa is one of mentality. We have a ‘low-cost’ mentality, in which the only gain at leadership level of any value is seen as being that of personal gain. By demonstrably shifting the power balance, to encompass women and youth leaders, this mentality will shift and a more inclusive form of leadership will start to demand prosperity for all.”
And for those who love numbers that translates into this: If women participate identically to men in the economy, by 2025, the world’s economy (annual GDP) would expand by US$ 28 trillion, or 26 per cent. The expansion is the size of the current US and Chinese economy combined. The ILO Women in Business and Management study quotes Sub-Saharan Africa as benefitting by 0.3 trillion.