Bridging the gender gap: Women’s underrepresentation in global supply chains

Despite constituting half of the world’s population, women are still grossly underrepresented as suppliers in global value chains. Millions of entrepreneurial, educated, and passionate women worldwide seek equal opportunities to start and grow businesses. They have vast potential, including in India.

Research shows that women—both in the workplace and as business owners—are essential drivers of inclusive economic growth and poverty reduction worldwide. As business owners, they create jobs and contribute to the growth of economies everywhere. However, the percentage of women pursuing entrepreneurial careers remains lower than that of men. For example, India ranks 135th out of 146 countries in terms of female labour force participation, and national surveys peg women’s entrepreneurship at just 20% of the micro, small and medium enterprises (MSME) sector according to the ministry of micro, small and medium enterprises.

Equal participation of women and men as entrepreneurs could substantially boost global gross domestic product (GDP). The Boston Consulting Group estimates that this could raise GDP by 3% to 6%, translating to an increase of $2.5 trillion to $5 trillion in the global economy.

In India, women have the potential to contribute to the economy much more than they do presently. According to recent research by the McKinsey Global Institute, with equal opportunities, women-owned businesses could add $700 billion—approximately $2,200 per person—to India’s GDP by 2025. However, progress has been slow for women who want to deliver their solutions to local and global problems.

Expanding supplier diversity and inclusion is one crucial element to achieve greater equality for women. To achieve this, we need education programmes to raise awareness about the importance of gender inclusive sourcing as a win-win for women-owned businesses, corporate and government buyers, and the economy as a whole.

We also need public and private sector buyers to make greater commitments to build gender-diverse supply chains. This requires impact sourcing that leverages the underutilised capacity of women as suppliers of products and services globally.

Governments and the private sector must ask: what can we do to eliminate gender bias in our procurement systems to give women-owned businesses the opportunity to compete for contracts? Fortunately, some governments and corporate buyers worldwide, including in India, are beginning to examine this question, and in some cases, they are setting specific goals and targets for inclusive sourcing from women-owned businesses.

For example, in 2018 India’s small and medium enterprise support programme included a target of 3% of its procurement from women entrepreneurs. In 2021-22, the latest year for which data are available, India’s government-owned enterprises (CPSEs) procured goods and services worth Rs. 1,660.43 crore from 11,225 women-led small and medium enterprises.

This article is authored by Elizabeth A. Vazquez, CEO and co-founder, WEConnect International.