Buying from Women: A Powerful Tool for Gender Equality and More
Women entrepreneurs everywhere—in frontier markets and advanced economies alike—who need business opportunities benefit from this growing corporate trend: supplier diversity. This is good news, especially now, as inclusion of women-owned businesses is essential to equitable economic recovery following the COVID-19 pandemic.
Women’s economic empowerment, from their participation in employment to business ownership, is fundamental to achieving gender equality and many of the other Sustainable Development Goals. The corporate sector has both a responsibility and business case for empowering women. Research by McKinsey & Co shows that gender diversity and women’s leadership pay off in profits and share performance for companies. Investing in women entrepreneurs also has a multiplier effect on their families’ financial stability, health, and education. However, women entrepreneurs are at a significant disadvantage worldwide: in 40% of economies, women’s early-stage entrepreneurial activity is half or less than half of that of men.
One fundamental barrier that women entrepreneurs face to starting and growing companies is access to networks and markets. According to WEConnect, “Women account for over $20 trillion in spending per year and are involved in over 80 percent of consumer purchasing decisions worldwide. However, globally women-owned businesses earn less than 1 percent of the money spent on vendors by large corporations and governments.” Inclusive procurement aims to close this gap and create more diverse, resilient, and innovative supply chains that reflect the demographics of the markets that companies serve.
Turkey, where Building Markets operates a program to connect over 2,000 local SMEs to supply chains and investment, is a good case for corporations to increase their number of women suppliers. The Turkish economy’s size—among the top 20 in the world—belies the opportunities that exist for women. In the World Economic Forum’s 2020 Gender Gap Index, Turkey ranks 136 out of 153 economies in women’s economic participation and opportunity. The labor market participation rate is 34% for women, compared to 72% for men. COVID-19 has only exacerbated the need for business opportunities and support for women. UN Women has raised concerns that women’s share in the workforce and among business owners have regressed further with pressures from the pandemic. KAGIDER (The Women Entrepreneurs Association of Turkey) found that 76% of their members experienced business challenges during the pandemic; 56% incurred more debt; and 55%, at least temporarily, closed.
Thankfully, in addition to the growing gender diversity and inclusion agenda for corporate payrolls and boardrooms, intentional procurement from women-owned businesses is gaining momentum in Turkey. Multinational companies operating in Turkey that are looking to apply their global supplier diversity practices locally have a pathway to do so with women suppliers. This is important as recent research from UNCTAD demonstrates that multinational enterprises can lead to increased positive outcomes for gender policies and practices in local markets, including through supply chains. Domestic corporations in Turkey are also supporting women suppliers. For example, Boyner Group, in partnership with IFC and KAGIDER, has been providing training to women suppliers and creating access to new markets through e-commerce. In addition, KAGIDER is advocating for important legislation to increase women suppliers’ share in public procurement.
Beyond narrowing the gender gap for women, these initiatives have the potential to positively impact other vulnerable communities in Turkey. For example, according to UNHCR, women and children represent more than 70% of Turkey’s over 3.6 million refugee population. Furthermore, the country’s growing experience and success with procurement with a “gender lens” has the potential to lead programs to partner with other underserved entrepreneurs. When it comes to the diversity and inclusion agenda for supply chains in Turkey, women entrepreneurs are leading the way, and partnership with intermediaries that can identify, train, and link diverse local suppliers with buyers, such as Building Markets, are there to ensure success.