THE STATE OF WOMEN’S ENTREPRENEURSHIP IN INDONESIA AND CANADA
Women-owned business enterprises contribute to the economy and to society. why does women’s Today, women-owned businesses account for 9.1% of Indonesia’s GDP. With relatively high entrepreneurship unemployment or underemployment, matter? encouraging women’s self -employment would boost this number. To unleash this potential, we need to address the barriers to women starting and growing a business. 2
Examine the state of women’s entrepreneurship in Indonesia and compare it to Canada, a country with more extensive programs to support and promote women entrepreneurs. Canada is ranked #7 on the ”Supporting Entrepreneurial Conditions” component research objectives of the Mastercard Index of Women Entrepreneurs & methodology 2018. Indonesia ranks #30. Identify interventions (policy and regulation) and practices (programs) in Canada that may be applicable for Indonesia Methodology: 1. Desk research (rapid scan of 60 documents) 2. 20 interviews 3. Survey filled out by 15 people 3
section I. profile of women entrepreneurs and their enterprises The majority of women entrepreneurs in the two countries are concentrated in sectors with low growth potential, low export propensity, and low barriers to entry Indonesia Canada Age Average age: 41 years Average age: 48 years Top 2 highest High school diploma 1. Master ’s or doctoral degree education Bachelor’s degree 2. Bachelor’s degree levels 85% are opportunity-driven 82% are opportunity-driven Entrepreneurs Motivation Key motives: independence, generate income, Key motives: have the right skill/passion, create job for herself/family independence 42% see positive opportunities 58% see positive opportunities Attitude 54% feel confident about their capability 45% feel confident about their capability 60% are not deterred by fear of failure 61% are not deterred by fear of failure % of SMEs Account for ~24% of SMEs Account for 15.7% of SMEs % of GDP 9.1% 9.6% Enterprises % exporting N/A 11.8% of women-owned enterprises Information, waste management, health Food production, retail trade, garment Top sectors care and recreation, retail trade, production accommodation and food services 4
section I. barriers faced by women entrepreneurs in Indonesia and Canada As in the case globally, women entrepreneurs in the two countries are constrained by limited access to capital, networks, development programs, and face constraining socio-economic norms Indonesia *) Canada *) Issues Specific Issues ✓✓ ✓✓✓ Limited availability of growth capital ✓✓✓ High interest rate unknown Limited access to capital ✓✓✓ ✓ Limited collateral/security for loan ✓ ✓✓ Undervalued by investors due to unconscious bias Limited access to ✓✓ ✓✓✓ networks (i.e., mentors, Do not know and/or do not have the right connection advisors) ✓✓✓ Programs are not available in their area (centralized) unknown Limited access to skills ✓ ✓ Unaware of such programs development programs ✓✓✓ ✓✓ Programs are too “masculine” or do not suit women’s need s (e.g., time) ✓ Perception that the role of generating income belongs to men unknown ✓✓✓ ✓✓✓ Household responsibility predominantly falls to women Socio-cultural norms and internal barrier ✓✓ Expensive childcare services constrain women’s mobility unknown ✓ ✓✓✓ Confidence gap ✓✓ Limited information on international trade and/or procurement unknown Challenges to a) export ✓ Do not have the connections unknown and/or b) succeed in ✓✓ Do not have the “know - how” (e.g. , how to pitch, seal agreement, ..) unknown procurement deal ✓✓ Concentrated in sector that are not “in - demand” unknown *) vvv= most significant (most stated in studies) vv= significant (stated in a number of studies) v= present (not widely stated in studies) 5 **) There is no study yet. It does not mean the challenge does not exist
section I. barriers faced by women entrepreneurs in Indonesia and Canada As in the case globally, women entrepreneurs in the two countries are constrained by limited access to capital, networks, development programs, and face constraining socio-economic norms Indonesia *) Canada *) Issues Specific Issues ✓✓ ✓✓✓ Limited availability of growth capital ✓✓✓ High interest rate unknown Limited access to capital ✓✓✓ ✓ Limited collateral/security for loan Most mentioned in Indonesia ✓ ✓✓ Undervalued by investors due to unconscious bias Limited access to ✓✓ ✓✓✓ networks (i.e., mentors, Do not know and/or do not have the right connection advisors) ✓✓✓ Programs are not available in their area (centralized) unknown Limited access to skills ✓ ✓ Unaware of such programs development programs ✓✓✓ ✓✓ Programs are too “masculine” or do not suit women’s need s (e.g., time) ✓ Perception that the role of generating income belongs to men unknown ✓✓✓ ✓✓✓ Household responsibility predominantly falls to women Most mentioned In Indonesia Socio-cultural norms and internal barrier ✓✓ Expensive childcare services constrain women’s mobility unknown ✓ ✓✓✓ Confidence gap ✓✓ Limited information on international trade and/or procurement unknown Challenges to a) export ✓ Do not have the connections unknown and/or b) succeed in ✓✓ Do not have the “know - how” (e.g. , how to pitch, seal agreement, ..) unknown procurement deal ✓✓ Concentrated in sector that are not “in - demand” unknown *) vvv= most significant (most stated in studies) vv= significant (stated in a number of studies) v= present (not widely stated in studies) 6 **) There is no study yet. It does not mean the challenge does not exist
section I. barriers faced by women entrepreneurs in Indonesia and Canada As in the case globally, women entrepreneurs in the two countries are constrained by limited access to capital, networks, development programs, and face constraining socio-economic norms Indonesia *) Canada *) Issues Specific Issues ✓✓ ✓✓✓ Limited availability of growth capital Most mentioned in Canada ✓✓✓ High interest rate unknown Limited access to capital ✓✓✓ ✓ Limited collateral/security for loan ✓ ✓✓ Undervalued by investors due to unconscious bias Limited access to ✓✓ ✓✓✓ networks (i.e., mentors, Do not know and/or do not have the right connection advisors) ✓✓✓ Programs are not available in their area (centralized) unknown Limited access to skills ✓ ✓ Unaware of such programs development programs ✓✓✓ ✓✓ Programs are too “masculine” or do not suit women’s need s (e.g., time) ✓ Perception that the role of generating income belongs to men unknown Most mentioned ✓✓✓ ✓✓✓ Household responsibility predominantly falls to women Socio-cultural norms and in Canada internal barrier ✓✓ Expensive childcare services constrain women’s mobility unknown Most mentioned ✓ ✓✓✓ Confidence gap in Canada ✓✓ Limited information on international trade and/or procurement unknown Challenges to a) export ✓ Do not have the connections unknown and/or b) succeed in ✓✓ Do not have the “know - how” (e.g. , how to pitch, seal agreement, ..) unknown procurement deal ✓✓ Concentrated in sector that are not “in - demand” unknown *) vvv= most significant (most stated in studies) vv= significant (stated in a number of studies) v= present (not widely stated in studies) 7 **) There is no study yet. It does not mean the challenge does not exist
section II. regulation and policies on women’s entrepreneurship in Canada As in the case globally, women entrepreneurs in the two countries are constrained by access to capital, In Indonesia, there are no regulations or policies to support and promote women’s entrepreneurship. access to network and knowledge, and socio-economic norms Canada has financing, international trade, and (drafted) procurement policies Issues Specific Issues Policy Actions • Federal government allocated loan facility through BDC Low access to capital Limited availability of growth capital • Federal and provincial governments disbursed financing facility through women-focused organizations • Provincial government subsidizes childcare Socio-cultural norms and Expensive childcare services constrains women’s services (e.g., government of Quebec, internal barrier mobility government of Ontario) • Federal government (Trade Commissioner Limited information on international trade Service) established Business Women in Trade Do not have the connections (BWIT) Do not have the “know - how” (e.g. how to pitch, seal • Federal government proposes gender chapter agreement,..) in free trade agreement (e.g., Canada-Chile Challenges to a) export, or Free Trade Agreement) • Federal government allocated equity financing facility through BDC Capital for women Concentrated in sector that are not “in - demand” enterprises in high-tech sector • “Choose Science” national campaign • Supplier Diversity Policy: Federal government is planning to adopt “set - aside” (similar to the b) succeed in procurement U.S.) for women-owned enterprises in deal government procurement policy. • City of Toronto has been implementing 8
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