2023 has been significant in terms of bringing gender equity in the workforce into focus. While WEF’s Global Gender Gap Report ranks India at 127 on gender parity overall, and at 142 on women’s economic participation, there have been some glimmers of hope. We saw our female labour force participation rate rise by 4.2 percentage points to 37 percent this year. We also witnessed ‘women-led development’ being declared as one of the six key priorities of our G20 Presidency – an incredibly promising move that signals the explicit intent to address gender inequity. In a more global context, Nobel Laureate Claudia Goldin brought her comprehensive account of women’s labour market participation through the centuries.
Against this backdrop, the findings from the Women in India’s Startup Ecosystem Report (WISER) emerge as actionably significant. India’s startups are showing an inherent advantage in their ability to attract, retain and promote women compared to traditional enterprises. Simply put, they have more women overall (35 percent vs. 19 percent in corporates), more women in diverse functions and roles of influence (like tech, sales and finance), and most importantly, more women at the top (18 percent of Founders/CEOs and 21 percent of Directors/VPs in comparison to only 5 percent and 15 percent, respectively, in corporates). But while these numbers are encouraging, let’s also note that both unmanaged outcomes and a generational advantage play a role here. Moreover, startups are not immune to the leaky pipeline we see with women’s careers as they advance, especially as they approach their thirties.
But if India’s startup ecosystem consciously addresses these challenges and builds on the positive endowments, it has the potential to create over two million jobs for women by 2030.
Why startups are ahead of the gender parity curve
Startups are fueling India's growth, with women-led businesses playing an increasingly important role. The total number of recognized startups grew from 6,000 in 2017 to 80,000 in 2022. The share of women-led startups within this ecosystem grew from 10 percent to 18 percent in the same time period. Similarly, the cumulative unicorn count in India rose from 13 to 105 between 2017 to 2022; the corresponding share of women-led unicorns increased from 8 percent to 17 percent. Finally, the total VC funding for Indian startups has risen to $21.9 billion in 2022 from $5.9 billion in 2017. The share of funding to women-led startups has increased from 11 percent to 18 percent in the same time period.
While these numbers are far from equal, it’s heartening to see the rising share of women in leadership roles, along with funding to women-led startups moving in a proportionate manner. WISER has highlighted that there are certain cultural factors that are influencing this shift. Startups are uniquely positioned to attract female talent as they enable women to realise their personal and professional goals at multiple career stages and demonstrate lower barriers for women to occupy roles across diverse functions. Furthermore, the report found that, contrary to popular perception, women’s motivations to join startups are no different from men, with both preferring accelerated learning and advancement, fast pace of work, ownership and autonomy, and innovation as key drivers. Additionally, there are more women in senior roles at startups, which helps equality trickle-down across levels.
We also observed that women-led startups outperform in ensuring women's representation across various functions. Women founders tend to be more acutely aware of barriers, such as safety, maternity and care responsibilities, compared to their male counterparts. They are, therefore, more likely to create a conducive work environment for women and potentially offer enabling policies around flexible working days/hours and return-to-work programs. Over time, this leads to higher retention and promotion for women, and results in female-founded startups having 2.5x women in senior roles compared to male-founded startups.
Gender equity in startups is unfinished business
However, there is a long, hard road ahead. While women and men start together, tenure and seniority don’t keep the same pace for women. We found that just a decade into their careers, eight out of 10 men in startups occupy Director-level positions or higher, compared to only five in 10 women. The gender gap at leadership positions is evident at 10 years, with just 24 percent of women reaching CXO/SVP levels compared to 40 percent of men.
Our biggest source of hope came from studying the top 10 percent of startups that had closed in on the gender gap and gave us some crucial insights on what it takes. In this top decile, 95 percent of women felt mentored by senior women leaders, 93 percent of employees acknowledged an inclusive environment, 84 percent of women felt comfortable raising concerns about bias, and a striking 98 percent of employees believed they can be their authentic selves without fear.
Our learning has been that standalone initiatives or DEI programs alone do not work. To move the needle for women, enduring practices, people (across all levels), behaviours and policies must move in tandem. Startups can initiate gender parity by shaping their culture to embrace well-defined and transparent gender goals - one of the most important being prioritising women in leadership and roles of influence. From top executives and supervisors to human resources, or experts and the workforce as a whole, successful startups exemplify that collective effort across the board empowers women to bring their full selves into work.
Conclusion
India's startups hold tremendous promise for reshaping gender dynamics in the professional world. The foundation for change rests on work culture, and every stakeholder plays a crucial role in advancing women's careers. Startups that are committed to gender equity hire with intent, invest in retention and advancement, and support women employees upon return to work. Inclusive behaviours and a public recognition of women's talents, coupled with explicit measurable goals, are pivotal steps towards creating a more equitable startup environment. We believe that, with careful introspection among founders that helps support timely and targeted action, this community can truly change the game for women; the startup way.
Led by ACT For Women, the Women in India’s Startup Ecosystem Report (WISER) is a collaborative report made with participation from 200+ startups. The 2023 edition focuses on understanding the drivers for gender diversity across employment levels and spotlighting best practices that have helped improve women's participation.
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