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Female entrepreneurs represent the power of an untapped market
The article includes interviews with Julie Castro Abrams, the CEO of Women’s Initiative for Self Employment, a San Francisco nonprofit that provides high-potential, low-income women with the training, support and funding to start their own businesses, and Weili Dai, the co-founder and former chief operating officer of Marvell Technology Group, and the only female founder of a global semiconductor company. It also profiles several of the women who, along with other female inventors, scientists and business leaders, were honored at the 2011 APEC Reception Honoring Women Innovators.
“Women have done great things in the Bay Area — it’s an incubator of innovations, a place where people think of new ways to address challenging problems,” said Janet Lamkin, president of Bank of America California and chair of the Bay Area Council, which spearheaded the formation of the Women and the Economy Summit Steering Committee at this week’s APEC conference. Led by Secretary of State Hilary Clinton, it is the single most influential gathering of women from politics, technology, investment, health care and media, brought together to draft policies that will enhance the worldwide economic power of women.
Sharon Vosmek, CEO of Astia — a Bay Area-based incubator of female-led startups — and a U.S. delegate to WES, points out that the female-centered focus of WES is itself unusual and historic, adding that the Bay Area provides an environment for out-of-the box thinking that will allow the development policies needed to meet the various challenges for economic empowerment.
“If you look around the room at most of the economic gatherings taking place around the world, you’ll see mostly men,” Vosmek said. “But since we’re used to doing things differently in the Bay Area, and we’re comfortable with change, it doesn’t surprise me that this is the place for WES.”
Research shows that while women represent 53 percent of new hires, by the time when “individual contributors” are promoted to managers, the number drops to 37 percent, according to Catalyst, a nonprofit focused on expanding opportunities for women in business.
Catalyst also reports that only 26 percent of vice presidents and senior executives are female, and only 14 percent of executive committees, on average, are women. The research also found a 26 percent difference in return on invested capital between companies with 19-44 percent women on the board and companies with zero female directors.
Vosmek also points out the lack of funding granted to startups run by women. She points to a Kauffman Foundation reports which says that even though 50 percent of United States business school undergraduates are women, 37 percent of MBA degrees are awarded to women, and females make up a hefty chunk of those graduating with advanced science or math degrees, less than 10 percent of venture capital goes to companies with female founders.
And according to a U.N. study, collectively the 21 economies of the Asia-Pacific region lose between $42 billion to $47 billion in GDP annually by not tapping into women’s economic potential.
What can be done to unleash the hidden potential of this market? Barbara Kasoff, president and CEO of nonpartisan public policy organization Women in Public Policy, as well as a U.S. delegate to the summit, believes the answer is supporting women-owned businesses.
“The strongest growth worldwide comes from women-owned businesses, and women business owners have survived a tough economy better, because of they way they do business,” Kasoff said. “They’re careful, they’re strategic. And now they’re positioned better to find their way to leadership.”
“In a time when many economies around the world are rocky, and we’re looking for new solutions, and everyone’s looking for an untapped market,” Vosmek said. “I’m here to tell you: It’s women. We are the great untapped market. Get us access to what we need to start and build companies, and we’ll be able to use this solution that’s right in our own backyard.”
Julie Castro Abrams
Microfinancing works, trickle-down doesn’t
Julie Castro Abrams is the CEO of Women’s Initiative for Self Employment, a San Francisco nonprofit that provides high-potential, low-income women with the training, support and funding to start their own businesses. WISE is expanding to New York and Chicago in 2011.
When a potential new business owner comes to you and asks for help, how do you decide if she’s worth your investment? The first thing we give them is a SWOT analysis: That’s strengths, weaknesses, opportunities and threats. We use this as a tool of assessing the client’s readiness. Is she ready to sit down and write her business plan? Or is this just a dream with a lot of obstacles?
What happens next? A training course that covers everything a small-businessperson needs to write her business plan. Next, we have thousands of volunteers who want to help women start their own business. Maybe we have a group of restaurant owners who meet to go over the business plan of a potential food business, or we connect the businessperson with a mentor in the same field, so she can have someone to talk to as problems arise. Why train women to start their own businesses? Why not job training instead? The population we help is traditionally marginalized; they come to us making $12,000 a year and beset with other difficulties. These are not people who can make money working for someone else. Once these women create their own thriving business, it pays off in many ways. For one thing, once their income rises, they need far fewer social support services. Instead of receiving welfare, they start paying taxes. For another, women who start their own businesses hire locally. Our graduates created 4,300 jobs in 2010, paying an average of $2 over the median for similar jobs.
So there’s a ripple effect. Yes, it’s staggeringly successful, so much so that it makes me frustrated when I watch what’s going on with job creation on a national level. It’s all fine and well to do construction projects, or invest in biotechnology that’s far down the road, but we just hit the highest level of poverty in generations, and we need jobs now. WISE can create a job for a $2,500 investment. Anyone read the news stories about how much each job created by the Economic Recovery Act cost? It’s not $2,500, I can tell you that.
Why tomorrow’s technology needs women’s participation Weili Dai is the co-founder and former chief operating officer of Marvell Technology Group, and the only female founder of a global semiconductor company.
You see a direct link between the technology Marvell enables and working women. What is it? Women can use technology to work without leaving her village and her family. And because technology is helping developing countries compete with advanced countries, globally. The Earth is flat now. If there’s something I don’t know, I can do some Google searches and be knowledgeable in just a few minutes. And I can do that from anywhere in the world, from my home, with my family.
What are the strengths you see in female engineers? From a technical standpoint, they’re very similar to male engineers. But personality-wise, women seem to work more socially. They work well in teams, and it can be easier to build teams around them. It makes sense to me; women have for thousands of years had the responsibility of taking care of their families, so the default is on group activity.
You and your co-founders started Marvell in 1995. Did you think there would be more female technology executives by now? Yes, technology overall absolutely needs more female participation. But I’m hopeful for the future; women engineers tend to make things with great user-interface design. They think about how people use their gadgets, and they have a sense of design and beauty. Moving forward in hightech, it’s going to be less about nerdy code, and more about making things that are easy to use and look great, which hopefully will attract more and more women.
So what do you do to encourage female leaders? Besides, of course, providing an example of a successful woman in technology, I participate in the Fortune/U.S. State Department Global Women’s Mentoring Partnership. I’ve had women from China and from Kenya come to spend a couple of weeks with me and learn how our business works.
Female innovation leaders
These women — along with other female inventors, scientists and business leaders — will be honored Thursday at the APEC Reception Honoring Women Innovators.
Nguyen Thi Mai Thanh Chairwoman and CEO REE Corp., Vietnam
When Nguyen Thi Mai Thanh joined the state-owned Refrigeration Engineering Enterprise in 1982, it was, as she has described it, “a small state-run business in poor condition fitted with used machinery, producing mainly ice-cube makers.” Eleven years later, after seeing Vietnam infused with new business energy under the Doi Moi, or Renovation, program of economic reforms and with her own company stagnating, she decided to petition the government to privatize the company.
REE became the first company in Vietnam to be privatized under the Doi Moi reforms, the first company listed on the New Stock Exchange of Vietnam in 2000, and the first Vietnamese company to raise capital by issuing stock.
Dong Mingzhu Vice chairwoman and president Gree Electric Appliances, China
Mingzhu started out at Gree, a maker of air conditioners, as a saleswoman. Assigned to a particularly poor province, she sold so many air conditioners that she caught the attention of higher-ups, and rose quickly through the ranks, becoming president in 2001. Under her leadership, Gree has adopted flexible sales strategies while investing heavily in research and development, a strategy known as “Gree Mode.” The result is double-digit growth every year since 2005, and Gree has become the No. 1 air conditioning manufacturer in China.
Mingzhu’s management principles are widely imitated in China; she also wrote one of the most influential Chinese business books, “Check Around the World,” about her experiences managing Gree. The book was so popular it was even adapted into a television series.
Edita Aguinaldo-Dacuycuy Science- and technology-baseddragon fruit farming, Philippines
Aguinaldo-Dacuycuy didn’t intend to become a farmer. All she was looking for was relief for one of her daughter’s medical problems. After Aguinaldo-Dacuycuy discovered that dragon fruit, a little-known fruit from the cactus family, helped relieve her daughter’s symptoms, she decided to try to grow the fruit in her backyard.
That simple decision has mushroomed into a dragon fruit plantation, REFMAD Farms, where Aguinaldo-Dacuycuy not only grows the fruit, but operates the farm as a kind of science- and technology-based farming laboratory, where various growing methods are tested, and the results are communicated to other farmers.
Dr. Patricia Bath Opthalmologist and inventor, United States
Eye care should be colorblind. But when Dr. Patricia Bath worked in noted New York hospitals in the dawn of her medical career, she noticed that blindness was much more common in poor and minority populations. Her subsequent work to get top-rate medical care to these populations pioneered the trend of “community opthamology” — free or low-cost eye care provided by volunteers.
Bath holds five U.S. patents, including the Laserphaco Probe, a medical device that helps remove cataracts from the eyes with lasers. Bath was the first black female doctor to receive a patent for a medical device, and the Laserphaco Probe continues to be used all around the world.