Assessing Business Enabling Environments: How Gender Changes the Equation

There’s been growing interest over the past few years – both within countries and in the international economic development community – in moving beyond “one-off” business assistance programs and taking a step back to assess environmental factors influencing the start-up and growth of small businesses. Reducing legal and regulatory barriers can then make it easier for start-ups to grow, and will strengthen the impact of business assistance programs.

However, nearly all assessments of the business enabling environment (BEE for short) do not take gender constraints into consideration.

I recently presented a paper at the Diana research conference (focused on women’s entrepreneurship research, education and practice) focusing on this very issue. Entitled, “Assessing Business Enabling Environments: How Gender Changes the Equation,” the paper reviews the items contained in four well-known business environment rankings : the Heritage Foundation’s Index of Economic Freedom, USAID’s BizCLIR, the World Economic Forum’s Global Competitiveness Reports, and the World Bank’s Doing Business indicators. Perhaps not surprisingly, none of these assessments and tools considers the gender implications of policy and program development, nor the cultural constraints faced by women more than men as they start and grow their enterprises.

There have been some efforts in recent years to assess how women business owners are faring in particular. Efforts by the IFC, ILO and USAID – most particularly the new GenderCLIR assessment tool developed for USAID – are discussed in the paper.

What’s different for women business owners? Some key internal and external constraints include:

  • Lesser access to assets and property, which can lead to challenges in accessing business financing,
  • Less access to networks, both formal and informal,
  • Greater difficulty with obtaining licenses and permits (related not only to mobility and time constraints, but discrimination), and
  • Social and cultural constraints than can lead both to lower start-up rates and growth rates for women-owned firms.

What’s the way forward? Certainly, this examination points out the need for more integration of gender constraints and socio-cultural issues into general BEE assessments. It also points out the value of looking from the outside in as well as from the top down, and of extending purely quantitative measures into qualitative territory. The paper also points out that assessments are but the first step in a process, and that more work is needed to understand what policy change and program implementation brings about the greatest entrepreneurial boosts. Finally, while there are now gender-aware BEE methodologies being employed, we are a long way from having enough statistical and experiential data to rank countries in a similar manner as the Doing Business Indicators. May that day come soon!

To download the paper, and to learn more about Womenable’s other research publications, visit Womenable’s Publications Page.