The Changing Landscape in Women’s Economic Empowerment

At the Council on Foreign Relations, Thursday May 4. From left, Linda Scott, Priya Basu (World Bank), Rachel Vogelstein (CFR).
Written by Linda Scott

Soon the women’s economic empowerment effort will need to scale to global proportions. At the Council on Foreign Relations, a discussion was held on the emerging landscape.

On Thursday last week, the Council on Foreign Relations held a moderated discussion on innovations currently emerging in women’s economic empowerment. Priya Basu, Head of the Women Entrepreneurs Finance Initiative (We-Fi) Secretariat, gave an update on the We-Fi initiative.  I was speaking about the new Global Business Coalition for Women’s Economic Empowerment.  Rachel Vogelstein, director of CFR’s Women and Foreign Policy Program, moderated.  The event was part of the ExxonMobil Women and Development Roundtable Series at the Council on Foreign Relations.

I think the We-Fi initiative and the Coalition are two of the most significant new developments in women’s economic empowerment to emerge in the past year.  I was fortunate to be part of the We-Fi process and really came to have respect for what the World Bank is trying to accomplish through this program.  A total of $320 million has been awarded by fourteen nations.  The remit was to develop a program that could leverage the original contribution through various matching fund agreements. On the first round, $120 million was turned into $1.6 billion.   Proposals were invited from the major development banks.  The first round of awards, totaling $120 million, was allocated recently.  There are still two rounds to go.  (Double X Economy’s blog detailing the awards is here.)

The We-Fi initiative is more than an infusion of cash, however. The proposals have a number of new ideas being tried out that will, if successful, make a systemic difference in women’s access to capital.

Some of the proposals that came into the We-Fi competition included intentions to engage women-owned businesses in global supply chains.  There is an increasing interest in integrating women into supply chains as a way of growing their businesses.  The Department for International Development in the UK is also spearheading an effort to “map” the female presence as workers in global supply chains, through an ambitious initiative called “Work and Opportunities for Women” (WOW).

As I have read and listened to a number of proposals coming from outside the private sector, I have become increasingly convinced that it is high time for those who wish to accomplish this objective to communicate with private sector institutions who have extensive supply chains.  Of course, the Coalition’s members (Mondelez, Walmart, Marks & Spencer, Coca-Cola, Mastercard, ExxonMobil, Goldman Sachs, Qualcomm, and PwC) include several companies with massive presence in a wide range of global supply chains. If large programs such as those undertaken by the World Bank Group could be coordinated among the leading multinationals in women’s economic empowerment, the programs would be more efficient and also more likely to be successful.

Coalition members present for the Council on Foreign Relations event. From left, Nancy Swartout (Exxon), Chris McGrath (Mondelez), Linda Scott, Jenny Grieser (Walmart), Paul George (PwC), Angela Baker (Qualcomm), Jim Jones (ExxonMobil), Charlotte Oades (Coca-Cola), and Angie Rozas (Coca-Cola).

I led on three studies of Walmart’s efforts to engage small, women-owned businesses in their supply chains in 2014 (outputs are here, here, here, and here).  What we learned was that the initial contact with the retailer and indication of interest in making an order—the part of the process that most public institutions focus on—is actually much easier than the steps that come later.  It is in the process of production and transportation that most women-owned businesses fail in their efforts to supply internationally.  Furthermore, the effort to do so can be financially disastrous for the new supplier, so such transactions should only be undertaken with caution and appropriate attention to financing.

The difficulties of pulling off one of these orders are particularly challenging in developing countries.  In the Walmart studies, we found that just passing the requirements for the ethical sourcing audit (which every supplier to Walmart must pass) was impossible or too costly—or just very impractical—for many businesses in developing countries.  Meeting deadlines and production quality standards was very hard for some.  In several cases, the women had problems getting the supplies necessary to produce the design of the product ordered, even if they had designed it themselves.  Negotiating the export process was also a big problem—an illustration of the fact that corruption takes its biggest toll on women. In general, facilitating market practices like drop-shipping or suppliers reporting to customers ahead of interruptions are just not yet present in developing markets, causing the women-owned businesses to have more hurdles to overcome than domestic suppliers.

I told a bit about these issues in the talk on May 4, but also touched on the financial barriers for women-owned businesses.  The Coalition has also addressed these in several ways:  by making large international credit facilities available to women-owned businesses (Goldman Sachs and Coca-Cola), by setting up purchase orders as collateral for financing orders (Walmart), by helping women get identification for opening accounts (Mastercard, Marks & Spencer), by training bankers to be more receptive to women (Goldman Sachs), and by testing various technologies designed to circumvent traditional barriers to financial services (Qualcomm and ExxonMobil).

Once again, I reiterated the main point of my report about the Coalition:  the women’s economic empowerment movement must learn to engage with the private sector in a way that can use the mechanisms of the world economy to scale innovations on behalf of women with global coverage. Eventually, it will not be enough to be testing what works or trying programs through charitable institutions.  If women’s economic empowerment is to meet its ultimate objective—economic inclusion for all women—then an implementation plan for the world will be needed.

 

PS  I also made a few remarks about women and tech that seemed to strike a nerve, so I thought I would put in links to a few blogs on tech that include some elaboration on the remarks I made (here, here, here, and here). 

 

 

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