India Womenomics: ‘Passion’ Is Biggest Motivator For Women Entrepreneurs, Finds Goldman Sachs

Passion is the biggest motivation for embarking on an entrepreneurial journey for females, according to a survey of 200 women entrepreneurs from the Goldman Sachs program.

Having a ‘business family' background also helped, as many respondents pointed out. ‘Financial independence', ‘freedom' and ‘empower other women' were also highlighted as other key motivating factors, the survey found.

‘Training and mentorship' were highlighted as the top areas of improvement over the last three-five years. Better training has also likely resulted in improvements in accessing skilled professionals, the survey findings highlighted, adding that about 43% of the respondents saw improvements in access to a ‘skilled workforce'.

Respondents highlighted ‘access to funding' as the biggest challenge facing women entrepreneurs. Existing research indicates that there is a gender gap in funding start-ups, largely owing to unconscious bias against women, in that male entrepreneurs are about 60% more likely to secure funding than women entrepreneurs.

A ‘skilled workforce' was highlighted as both a key area of improvement and a top challenge. "This observation is corroborated by the findings from our recent India macro tour where economic policy experts highlighted the availability of skilled labour as a key bottleneck for manufacturing in India," said Chaitra Purushotham, Santanu Sengupta and Aditi Singh, authors of the report. Many policy commentators have expressed the need for more vocational education of the workforce, they said. One of the key reasons for the shortage of skilled labour is that about 90% of the workforce has education levels lower than or equal to the secondary level and are thus largely restricted to low skilled jobs, they explained.

While India is uniquely positioned to reap dividends from favourable demographics, female labour force participation rate in India is significantly below the male participation rate and also below these rates in other major developed and emerging economies, the note reaffirmed. Increasing the overall labour force participation rate to previous peak levels can add about 1 percentage point to India's potential growth, all else constant.

One of the key reasons for women's low participation in the labour force remains that the women in India bear a disproportionate responsibility for domestic and care-giving activities. Existing research indicates that Indian women spend about 8 times more time on a daily basis in domestic and care-giving services than men. Other reasons include horizontal inequalities such as early marriage, prevailing social norms that limit the occupational choices for women, crime incidents that deter women from working away from their residence, a lack of robust public transport connectivity and having fewer women role models.

An encouraging development over the past few years has been the rise of self-employed women in India, stated the report, citing data from the periodic labour force surveys. The share of self-employed women (who run enterprises on their own, as a partnership, and/or employ others) has risen about 11 percentage points from 2017-18 to about 31% in 2023-24.

For further improvement in women's participation in the labour force, there is need for building the ‘care economy', making policies in corporate India more friendly for women, increasing digital literacy, broadening employable skill sets and building well-connected public transport networks.