Breaking barriers: The rising wave of women in start-ups and path to gender equality

WISER report highlights the surge in women-led start-ups, the challenges they face, and the crucial steps that need to be taken to bridge the gender gap in the entrepreneurial landscape

   
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SMEs and start-ups are changing the dynamics of how businesses are evolving in this time and age. With concerns surrounding the participation of women in start-ups and the paucity of female representation in the higher echelons of most organisations, companies have now started to focus on these aspects as well. Gender equality is a trending topic today; countries, companies, organisations and communities are working diligently to give women recognition and enable them to compete with men at the highest levels.

However, there is a long road ahead with multiple factors at play.

Times are changing and the number of women who want to build their own start-ups is steadily increasing. Companies too are starting to align their goals keeping gender equality as a top priority. According to the 2019-20 annual report of the MSME ministry, although there’s an increased participation of women in start-ups, it’s still nowhere near that of men. While male-run enterprises make up an astounding 79.6 per cent of the 63.3 million MSMEs in India, women-run enterprises are still just at 20.4 per cent.

Clearly, a lot needs to change. To bring forth an overview of the current situation, a collaborative effort has been made by multiple companies to flesh out a report. The report called ‘WISER’ sheds light on some telling statistics.

“WISER serves as a valuable primer for understanding just how crucial it is for the start-up world to embrace and empower more women in their workforce. It provides insights and practical wisdom on how start-ups can nurture the careers of their women employees. By shedding light on the current landscape, WISER can act as a catalyst for change, paving the way towards a more diverse and supportive ecosystem,” says Abhiraj Singh Bhal, Co-founder, Urban Company.

A Change is on the horizon

Soon after the start-up revolution kicked in across India, thousands of small and medium companies emerged and female participation saw an upswing.

According to a 2020 report by DPIIT, the participation of women has increased significantly from 10 per cent to 18 per cent in a market cap which was 6,000 in 2017 and currently stands at 80,000. The same elevation has been experienced by unicorn companies and in start-up funding as well.

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From 13 unicorn companies led by women in 2017, the number has reached a stupendous 105 in 2022. The funding has also increased from $5.9 billion to $21.9 million in the same time period, an increase of 7 per cent in funding to women-led start-ups, as per a McKinsey report.

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These are just the nascent signs of positive growth that women-led start-ups are enjoying. There has also been a steady growth in women representation across corporations. With women-led start-ups now taking a major share of the market, it is being predicted that 4.8 million new jobs for women will be created by 2030. As of now, the representation of women in corporations is around 300,000 as per the WISER report.

What’s driving the change?

The WISER survey further reveals that there are a lot of factors that are accelerating the change in the landscape. However, the biggest reason that is fuelling this new trend is that women too have become growth-oriented over time. Striving to become more competitive, they are placing their careers ahead of their personal choices.

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Organisations offer several benefits to their employees. Faster progression, higher autonomy, merit-based appointment and the luxury of financial independence are lucrative incentives that are hard to let go off for any employee.

According to the WISER report, the motivation that drives women is no different from what men aspire from their jobs. The top three reasons are- accelerated growth to higher positions, accelerated scale of learning and a fast-paced environment overall. It has also been noted that women are more desirous of starting their own ventures and are a notch above men when it comes to innovation.

A long road ahead

Even though organisations are striving to do their best to bring gender equity into focus, there’s a long road to cover. Shortcomings need to be brought into the spotlight for companies to chalk out better policies and favourable terms for their women employees. In the WISER report, it’s been noted that women have a much higher role in start-ups than in corporations. These positions face more gender disparity as the progression to higher roles takes place.

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According to the WISER survey, a close look at women’s roles in companies shows that 49 per cent work in HR/Admin jobs. Out of this, 10 per cent have top positions, making up a total of 59 per cent of women in start-ups.

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Conversely, the R&D sector exhibits a 36 per cent total representation of women, with 21 per cent of them holding influential positions. This signals progress in bridging gender gaps, emphasising the increasing visibility of women in traditionally male-dominated fields.

Delving further into the statistics, it can be found that despite commencing their journeys concurrently, women’s career progressions do not align with that of men. A decade into their professional endeavours, approximately 80 per cent of men in start-ups ascend to Director/VP roles or higher, whereas only around 50 per cent of women achieve similar positions.

Bridging gap to increase women representation in start-ups

Culture plays an extremely important role in determining how a company grows and progresses. Fostering an inclusive environment not only brings people from varied backgrounds into an organisation, but it also helps it to make its first and second orders benefit.

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According to the WISER survey, to improve gender equity, clear goals can be set for both genders. This can include gender specific DEI (diversity, equity and inclusion) goals, equity in compensation, keeping targets for women in leadership and women advancement. The report further adds that leaders can play a pivotal role in boosting women’s careers.

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“The Indian start-up ecosystem is faced with a tremendous opportunity – to play an instrumental role in making gender equity a priority and consequently a reality. Start-ups offer a strong proposition for India’s most talented women, whose expectations are no different than men. As they scale, leadership roles and the need for talent expand, pulling all talent up more rapidly, supporting accelerated career tracks and learning,” says Vivek Pandit, Senior Partner, McKinsey & Co.

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