Women’s Entrepreneurial Venture Scope. 2013

ORIGINAL: WE Venture Scope

Photo: WEVentureScope 2013. The Economist Intelligence Unit

Women entrepreneurs in Latin America and the Caribbean are potentially one of the greatest under utilised resources in the region. More than almost anywhere else, Latin American women are starting businesses because they are identifying opportunities, and their countries have much to gain(1). As more women in the region have become active in the work force in the past two decades, national economies have expanded,(2) Between 2000 and 2010 income growth among women ín Latin America and the Caribbean contributed to a 30% reduction in extreme poverty(3) Arguably, women entrepreneurs offer similar economic benefits. The abundance in Latin America of opportunity-driven female entrepreneurs—those who form businesses because they see opportunities, not because they have no other choice— suggests that women's business aspirations may be particularly important to the region's growth. Indeed, evidence shows that opportunity-driven entrepreneurship has a decisively positive impact on economic expansion in the region(4).

Nonetheless, many countries in Latin America and the Caribbean are not reaping the full benefit women entrepreneurs present. The vast majority of Women-led businesses in the region are unable to grow beyond micro enterprises or move out of the informal economy, which reduces the earning potential of those businesses. Women lead 23% of small businesses in the region, but only 9% of large ones.(5) Firm size matters, as it is positively linked to the income of the firm and owner(6). The growth potential of women's businesses is also constrained by informality: between 55% and 91% of women's entrepreneuriaL activity in the region is in the informal economy.(7) Operating informally can make entrepreneurs more vulnerable to corruption and restrict access to formal sources of credit(8). Limiting expansion opportünities for women-led businesses reduces incomes, innovation and economic growth, damaging national competitiveness.

Improving opportunities for female entrepreneurs in the region requires a better understanding of the business environment and the factors that drive women's business success. The Economist Intelligence Unit (EIU), in collaboration with the Multi lateral Investment Fund (MIF), a memberofthe Inter-American Development Bank (IDB) Group, has created the Women's Entrepreneurial Venture Scope (WEVentureScope) to meet this need. The WEVentiireScope is the first comprehensive assessment of the environment for all female entrepreneurs in Latin America and the Caribbean, creating a standardised framework to help the public and private sectors empower women business owners. Although other studies have analysed the impedimenta faced by women in the workplace—from the World Economic Forum's Global Gender Gap report to the EIU's Women's Economic Opportunity Index—no study has extended its reach to assess the factors affecting women entrepreneurs operating micro, small and medium-sized enterprises (MSMEs) in Latin America and the Caribbean. The WEVentureScope calls attention to this need, providing a platform for dialogue about the most relevant factors that influence the start-up and growth of women's businesses.

1. The share of opportunity-driven early stage women entrepreneurs in the overall population in Latín America and the Caribbean is second only to Sub-Saharan África. EIU calculations with Global Entrepreneurship Monitor (GEM) data on female early-stage entrepreneurship as a percentage of the total population, and female improvement-driven opportunity entrepreneurs as a percentage of total female early-stage entrepreneurs. Global Entrepreneurship Monitor, GEM 2012 Global Report.
2. Economíst lntelligence Unit data. Women's workforce participatíon in Latín America rose from 40% in 1990 to 53% in 2010, while the region's average annual GDP growth was on average 3%.
3. World Bank, World Development Report2012: Gender Equality and Devetopment.
4. Zoltan Acs, "Innovations: Technology, Governance", Giobatization Wínter 2006, Vol l, No. 1:97-107.
5. WorLd Bank, Enterprise Surveys, 2005-2010.
6. WorLd Bank, ínter-American Development Bank, GTZ, "Women's Economic Opportunities in the Formal Prívate Sector in Latín America and the Caribbean: A Focus on Entrepreneurship", 2010,
7. International Labour Qrganisation, 2006-10, Employers and members of producers' co-operatives and self-employed own-account workers that own an enterprise in non-agricultural activities were used as proxies for entrepreneurship,
8. World Bank, Inter-American Development Bank, 2010.