At the International Trade Centre – the joint technical assistance trade agency of the United Nations and the World Trade organization – we have spent the last 50-something years working in developing countries and vulnerable communities to build and strengthen small and medium sized companies so that ultimately people can have better livelihoods and income.
Because of the known socio-economic benefits of financially empowering women – much of our focus has been on ensuring gender diversity in a wide range of sectors of the economy. It is no different for the tech industry.
For example, in 2014, we started a project targeting women-owned IT start-ups in a few countries having some of the greatest across the board gender gaps. Our goal was to actively contribute to increasing the share of women in leadership positions in the IT sector in Bangladesh, Kenya and Uganda. We teamed up with Google and C&IT to launch a tech challenge calling on software developers and other IT and graphic specialists to help create a digital platform for women-owned businesses across the world. The winners were two Kenyan female entrepreneurs, who by the way outperformed women AND men from all over the world.
Then in 2015 one of the participants in our project - a Bangladeshi woman, Farhana Rahman, who had become increasingly fascinated by technology and web design decided to start her own software development company – UY Systems Limited. Her story showcases my earlier point about the benefits of economically empowering women. Ms. Rahman dedicated a lot of her time to promoting the development of women entrepreneurship in Bangladesh. She is an active member of the Asia Foundation and has mentored women entrepreneurs and freelancers in the IT sector. Moreover, so far, this one woman in the tech industry has managed to include a staggering 134 women in the Bangladeshi supply chain. This shows us what happens when pioneers and visionaries dare to challenge the conventional wisdom and decide to champion the drive to support women entrepreneurs.
We know that all business start-ups face challenges. This is especially true if you are a women-led business start-up in one of the fastest changing industries. It is hard to believe that as we embark into the era of the so-called fourth industrial revolution only 3% of tech CEOs are women, and just 15% of startups have at least one female founder. It is an understatement to say that when it comes to diversity, tech companies have a long journey ahead.
And there is gender inequality along the entire pipeline: fewer girls specialize in STEM subjects; fewer women are hired in computer science related jobs; women in tech earn less than men; and women leave the industry at a higher rate. At the same time, current projections indicate that, by 2020, a mere 3% of all IT related jobs will be occupied by women. With this in mind, it is crucial that we start working to increase the number of women in the remaining 97%.
At the global level, the United Nations 2030 agenda for Sustainable Development calls for an end to all forms of discrimination against all women and girls everywhere by - among other things - giving women equal rights to economic resources. Furthermore, the 2030 Agenda pinpoints information and communications technologies as a driving force for women’s economic empowerment and poverty reduction.
So how do we increase the number of women-owned start-ups? Conventional wisdom would suggest that we start by getting more girls to choose STEM subjects. While doing so will increase the number of women who have the required skills to work in the tech industry, it does not directly address the high rate at which women leave the industry, nor does it address the wage gap today. One solution is to increase the number of women in leadership positions.
Some of you are probably asking yourselves: how does this solve the problem? Let me elaborate. Our research at ITC shows that women-led firms hire more women, but these businesses typically specialize in low value-added activities such as agriculture and basic manufacturing. By increasing the share of women in leadership roles, we will create a critical mass of women in fast-growing, innovative sectors such as the tech industry.
What I am describing is essentially a self-fulfilling process in which having more women in leadership positions in tech companies creates a women-friendly environment, which attracts more women to the industry. This in turn helps transform the image of the tech industry to make it more inclusive and will inspire more girls to specialize in STEM subjects. It will also increase the number of women-owned start-ups in the tech industry. This is what happened in Bangladesh where one woman entrepreneur helped create 134 new women entrepreneurs.
Even in a country like Norway with low levels of income inequality and favourable attitudes towards women’s rights, Parliament passed legislation requiring large, publicly traded companies to have at least 40% women on their boards. And here, we see what happens when we put policies in place to increase the share of women in leadership positions. The average age of company boards declined in Norway, which indicates that companies were forced to widen their search to find eligible candidates. Candidates who otherwise would not have had the chance. This is not to say that we need to legislate our way to gender equality-- or that we can. What we need are leadership and a firm commitment to achieving gender equality in the workplace.
Gender inequality in tech is not just a Silicon Valley problem. Boosting gender diversity in this industry also has a lot to do with the issue of access and use of mobile phones by women. There have been significant improvements in creating a more inclusive digital economy and we are now seeing that mobile phone ownership has reached the poorest people. In developing countries, an estimated 2.6 billion people own mobile phones, a figure that exceeds the number of people with access to electricity or clean water. Indeed, up to 70 percent of the world’s poor own a mobile phone.
There is, however, a gender gap in the access and use of digital technology across all developing regions. More men than women own a mobile phone, and more men than women use the internet. On a global level, there is an 11% gender gap in internet use. In fact, 1.7 billion women in developing countries do not own a mobile phone.
We have seen how including more countries in the digital economy has stimulated economic growth, even in the poorest countries. To put this into more concrete terms, a 10% increase in mobile penetration is associated with 1.2% increase in GDP in low and middle income countries. In fact, in emerging markets such as China and Brazil, the digital economy contributed 10% of their overall growth between 2008 and 2013. This implies that the tech industry is well positioned to become one of the main engines of growth in both developed and developing countries.
There is a case to be made for increasing women’s access to mobile phones since they afford greater digital connectivity which can ultimately help promote gender diversity in the industry.
Mobile phones can connect women-owned firms to customers abroad by integrating women-led businesses into the global marketplace. Platforms such as eBay and Etsy enable home-based businesses to export across the world. Moreover, online stores have lower operating costs and higher profit margins than traditional small-scale brick-and-mortar retail shops. Today, 40% of store owners on Alibaba are women.
So what can we do bridge the digital divide? The International Telecommunications Union has collaborated with UN Women and Whurley to create the platform EQUALS where companies can pledge their commitment to bridging the digital divide and eliminate gender inequality in access to technology. By joining the call on EQUALS, you not only make a positive contribution towards eliminating gender inequality, you’ll also send a positive signal to industry peers so that they too become inspired to act.
Closing the gender gap in the tech industry depends a lot on bringing greater visibility to women-led ideas and start-ups to consumers and investors networks both face-to-face and virtual networks. It is well-known that women entrepreneurs often lack access to market information as traditional business networks are often male-dominated. One way to bridge this divide is by creating new channels for women entrepreneurs to connect to each other.
ITC has launched a web-based application to connect help women entrepreneurs find business partners, promote their businesses and meet new customers. Our platform also provides learning solutions to help them grow their businesses. So far, we have been able to connect over 800,000 women entrepreneurs. The next step is to ensure that these initiatives gain traction so that women-owned businesses become more integrated into global supply chains. One way to do that is by implementing gender policy at all levels of management—from human resource policies to procurement policies. For example, by implementing a policy to increase sourcing from women suppliers, companies can support the development of women entrepreneurship.
Another way to support women-owned start-ups in tech is by increasing the number of women venture capitalists. Access to finance is one of the most significant challenges facing women entrepreneurs. In many developing countries, women often lack the right to own land, which then limits their ability to secure loans from banks. But access to finance is not just a problem facing women in poor countries. For instance, a recent study on entrepreneurship in the US shows that women-owned small businesses received a mere 4 percent of total loans disbursed.
In addition, women account for approximately 4 percent of venture capitalists. The barriers to accessing finance facing women entrepreneurs also has to do with the shortage of women investors. Studies show that women investors are more likely to invest in women-owned businesses. Increasing the number of women venture capitalists can increase the share of women-owned tech start-ups, help them grow faster and capture a larger market share. This means that financing women entrepreneurs not only empowers women, it is good business.
My last piece of advice for gaining market share in the tech industry, would be to make room for partnerships. The growth of tech hubs in Africa demonstrates what happens when governments, civil society, business and academia work together to formulate and implement policies for growth. As of 2015, there were 117 tech hubs across Africa. South Africa, Kenya and Nigeria are regional leaders in the creation of a domestic ICT industry in Africa. With their deep knowledge of the challenges facing their societies, these tech hubs are uniquely positioned to use technology to help solve social problems and are important partners in the global drive to eradicate poverty.
Gender inequality is not a simple problem with straightforward solutions, nor is it confined to one industry or one country. This is why we need everyone on board.
By Arancha González
ITC Executive Director.