Goldman Sachs has been receiving a lot of bad press recently about its activities relating to the financial crisis in Greece. It must have come as a relief when the Financial Times published a positive story about its efforts to empower women in developing countries [“Giving women a voice and vision,” by Rebecca Knight, 8 March 2010]. The “initiative launched by Goldman Sachs,” Knight reports, helps “to train female entrepreneurs in developing countries” and it “is beginning to bear fruit.” She reports:
“For Anagha Atul Kulkarni, the best part about going back to school was the chance to step away from the hectic, day-today running of her business and think about its long-term strategy. Ms Kulkarni, who runs Nirmala Pet A Pack, a packaging manufacturer in Hyderabad, India, recently spent five months in a management course at the Indian School of Business, (ISB) as one of the first participants in a global entrepreneurship programme run by Goldman Sachs. ‘I now have a clear vision of what I want the business to achieve for the next one to 10 years,’ she says. ‘In the day-to-day operations we never had time to give it a thought.’ She earned her certificate in management in January of last year and already her company has seen improved results. Revenue is up 20 per cent and, based on confirmed orders, turnover is on track to double this fiscal year. ‘I learned how to manage my working capital and how to mobilise funds,’ she says. But perhaps most importantly: ‘it has built up my confidence’.”
Most of us have probably never thought about female entrepreneurs in the developing world. If we had given the topic much thought, we probably wouldn’t have pictured them in a classroom learning about long-term business strategies, business process optimization, and revenue enhancement. In other words, we would have sold them short. Fortunately, Goldman Sachs hasn’t. Knight continues:
“Two years ago Goldman launched the 10,000 Women Initiative, a $100m, five-year programme that aims to strengthen business education in developing nations and boost the number of women there who receive management training. Today, more than 1,600 female entrepreneurs in the developing world have taken part in the programme and many are already channelling what they learned into higher profits for their companies and new jobs in their communities. The project was borne out of research conducted by the investment bank that indicated increasing the level of business education for women in developing countries could have a significant impact on driving economic growth as well as overall health rates. Educating women is also associated with greater political participation and the promotion of democracy. Women in the developing world have few opportunities to receive management education. Among the 50 big business schools in Africa, a continent of 900m people, only 2,600 women are enrolled in local MBA programmes, according to Goldman data.”
Knight notes that women in developing countries are often marginalized and few of them enjoy the same rights as men. They are also often discriminated against when it comes to education. I have repeatedly asserted that no country can expect to achieve its full potential if half of its population is discriminated against. All economies, but especially those in developing countries, need the intellect and skills of every citizen. Can female entrepreneurs have an impact? Some statistics from the U.S. should answer that question. According to the gaebler.com website aimed at helping female entrepreneurs: “There are 9.1 million women-owned businesses in the United States, and they employ 27.5 million people. Together, women-owned business contribute over $3.6 trillion to the economy each and every year.” Can any economy afford to overlook that kind of economic potential? Obviously not. Sound business practices (like bookkeeping and marketing) are essential skills for both men and women. Goldman Sachs’ initiative helps women develop those skills. Knight continues:
“As part of Goldman’s effort, more than 70 universities and non-profit groups in Europe and the US work with business schools in developing countries to train faculty and create local, culturally relevant certificate programmes. The programmes range from five weeks to six months and usually involve a combination of classroom learning and practical application. The courses cover everything from basic accounting and marketing to how to secure venture capital funding and creating a website. The programmes also instil confidence in the participants, according to Rita McGlone, senior director of Wharton Executive Education, a partner of the American University in Cairo. ‘The programme helps women find their voice and help them articulate a vision for their business.'”
One of things I like about the program is that merit matters. Knight explains:
“The competition to get in is stiff. The programme targets women who have not had access to management education in the past, but demonstrate ability and a solid professional track record, says Dina Powell, global head of corporate engagement at Goldman, who oversees the initiative. To date, the women’s initiative is active in 20 countries and its global average acceptance rate is 14 per cent. (The acceptance rate at Wharton hovers at about 16 per cent.)”
With two-years of experience under its belt and a number of graduates now actually applying what they have learned, some early results are being realized. Knight concludes:
“Goldman is monitoring the progress of its graduates and there are signs the programme has had an impact. According to the William Davidson Institute at the University of Michigan, the first group of its graduates in Rwanda increased sales, on average, by nearly 40 per cent and nearly 90 per cent hired new employees. Meanwhile, ISB reported that 70 per cent of its first 45 graduates experienced business growth and revenues increased by a median of 32 per cent within nine months of graduation. Many of the partner schools have also experienced a change for the better. Angel Cabrera, president of the Thunderbird School of Global Management, a partner of the American University of Afghanistan, says his school’s involvement has had a ‘transformational impact. It’s given us a renewed sense of purpose.'”
Nicholas Kristof reports on a much less well-endowed program that is also providing training to female entrepreneurs [“Partying to Change the World,” New York Times, 14 March 2010]. He writes:
“Maybe the most common question I get from readers is: What can I do? … There’s never a perfect answer, but here’s one ingenious approach: Throw a party! Let’s back up. In 2004, a Colorado woman named Torkin Wakefield, a Peace Corps veteran with a lifetime of experience in aid work, was temporarily living in Uganda. Her daughter, Devin Hibbard, then just out of graduate school, came to visit, and they strolled together through a slum in Kampala, the capital. They stumbled upon a woman named Millie Akena making jewelry beads out of trash paper outside her mud-walled home. They bought a few necklaces from Millie, for about 75 cents each. Over the next few days, mother and daughter received many compliments on the necklaces — especially when they explained where the beads came from. Jewelry from garbage! Hmm. A gleam in their eyes, Torkin and Devin returned to the slum, asked Millie to gather her friends and bought up more than 225 necklaces. American friends loved the beads. So Torkin and Devin, with their friend Ginny Jordan, formed BeadforLife. It’s a nonprofit seeking to promote entrepreneurship through an international jewelry manufacturing operation.”
The organization doesn’t just buy for resale jewelry made from paper, it works “with the women on improving jewelry designs and assuring quality.” Kristof reports that initial supplies were smuggled into the U.S. by friends (a cost-cutting measure I don’t recommend). He also points out that the jewelry wasn’t subject to duty anyway. Nowadays, however, everything is on the up-and-up. Since the jewelry is made by women for women, BeadforLife decided to use a marketing scheme that has a long history of success selling to women — home parties. Kristof explains:
“They began marketing the jewelry through bead parties in the United States — a bit like Tupperware parties. Typically, one woman invites her friends, and they come to her home to buy necklaces, bracelets and earrings for between $5 and $30. Last year alone, Torkin says, there were 3,000 of these parties, attended by about 100,000 people. ‘It’s not a handout; we’re totally opposed to that,’ said Devin, who is now based in Uganda for the project. ‘This is a symbol for us of women really working hard.’ BeadforLife recruits women who are earning $1 a day or less, and who seem particularly hard-working and entrepreneurial. Once enrolled, they get training in how to cut strips of scrap paper, roll them tightly, glue them and seal them — and, presto, a beautiful bead. The beads are not painted, and their color comes from the paper itself (with writing sometimes faintly visible). Magazine ads and aid group brochures are prized for their rich colors. Torkin remembers wincing when she saw women making beads from brochures explaining how mothers can prevent AIDS transmission to their babies. ‘I just hope that someone had looked at them before they were cut up,’ she said. Bead makers earn about $200 per month, half of which is deposited in brand-new savings accounts (one huge problem for the world’s poor is that they lack a safe way to save). The women are also encouraged to trade their beads to the program for antimalarial bed nets, condoms, deworming medicine and family planning supplies.”
Like the Goldman Sachs’ initiative, BeadforLife prides itself on the fact that it empowers women. Kristof explains:
“The centerpiece of the 18-month BeadforLife program is training bead makers to start small businesses. They get coaching in business management, and some learn trades like making jam or raising chickens. The bead makers get about $600 to open their own shops or start some other small business, and after a year and a half they graduate and new bead makers are enrolled. The aim is not to create lifelong jewelry manufacturers, but to turn women into bustling entrepreneurs.”
From its humble beginnings, BeadforLife is now doing quite well. Kristof concludes:
“These days, Torkin and Devin … [indicate that] their biggest challenge is how to manage $4 million in annual jewelry sales so that it makes the most difference. BeadforLife reflects several fascinating trends in the battle against global poverty. One is the increasing interest in using businesses and entrepreneurship to create jobs and a more sustainable economic liftoff. A second is a focus on women, because of evidence that they are more likely than men to invest business profits in their children’s education and health. A third is the growing attempt to engage American supporters by asking them to do something other than just writing checks. Increasingly, Torkin and Devin have also been using the bead parties to try to educate the jewelry buyers about Africa. To go with the beads, they’ve developed a curriculum on global poverty for American schools. They’ve also been taking Americans to Africa to see the work firsthand. ‘At first, we thought BeadforLife was just for Ugandans,’ Torkin said. ‘Then we realized that a lot of this was about helping Americans get involved.'”
One of the principles embraced in the Enterra Solutions® Development-in-a-Box™ approach is that helping entrepreneurs is good for economic development because entrepreneurs create jobs and continue to look for other opportunities. The two programs discussed in this post understand that principle. And like Kristof notes, they also understand that empowering women has a positive impact on more than just the economy. The American author Washington Irving, best known for his story “The Legend of Sleepy Hollow,” once wrote, “There is in every true woman’s heart, a spark of heavenly fire, which lies dormant in the broad daylight of prosperity, but which kindles up and beams and blazes in the dark hour of adversity.” No economy can afford to have that “spark of heavenly fire” lie dormant in good times or bad. Programs that kindle that fire in women entrepreneurs will always burn bright.
