There’s a $4tn opportunity on the table but women will get less than 1%. Is this the best we can do?

The challenges faced by women-owned businesses

Women-owned businesses often struggle with limited access to capital, which is essential for scaling operations and competing for larger contracts, and many women lack the collateral required to secure loans from traditional financial institutions. Networking opportunities, mentorship, and strategic connections are also less accessible to female entrepreneurs compared to their male counterparts.

Bias and discrimination in the procurement process are other disadvantages women-owned businesses face. These biases manifest in various forms, from biased evaluations to preferences for well-established, male-led suppliers. Obtaining certification as a woman-owned business can be complex and resource-intensive, often requiring significant documentation and adherence to stringent criteria. This can be particularly burdensome for smaller firms. Even when certified, women-owned businesses do not necessarily gain a competitive edge, as procurement officers may still favor larger, well-established suppliers, typically male-owned.

What needs to be done

Governments and corporations must adopt gender-responsive procurement policies with clear targets for women-owned business participation. Enhancing access to finance for women-owned businesses is crucial. This can be achieved through dedicated funds, grants, and easier access to loans. Organizations can collaborate with financial institutions to create favorable lending conditions for women entrepreneurs.

In addition, creating more networking opportunities, mentorship programs, and strategic connections can empower women entrepreneurs and transparent procurement processes and accountability measures can ensure fair opportunities for women-owned businesses. Open contracting and monitoring reforms can help track progress and address biases in procurement practices.

Finally, establishing robust metrics and holding leadership accountable by tying compensation to diversity outcomes ensures that inclusion becomes a strategic priority. We need to treasure what we measure.

Why this needs to be done now

Raising awareness about the economic benefits of integrating women-owned businesses into supply chains can drive change. Studies have shown that diversity in supply chains leads to better contract performance and economic growth. A study by McKinsey found that gender-diverse companies are 21% more likely to experience above-average profitability than their less-diverse counterparts. Similarly, a report from the International Finance Corporation (IFC) indicates that investing in women-owned businesses can yield a significant return, contributing to broader economic growth and poverty reduction. Advocacy efforts should continue to highlight these benefits and push for systemic changes.

Who’s leading the way?

Real-world case studies demonstrate how intentional efforts towards inclusive sourcing can lead to significant positive outcomes. Walmart, for example, has been a pioneer in supplier diversity, committing to source $20bn from women-owned businesses in the United States over a five-year period. This initiative not only empowers women entrepreneurs but also enhances Walmart’s supply chain by introducing diverse perspectives and innovative solutions.

Unilever’s supplier diversity program actively includes women-owned businesses, recognizing that a diverse supplier base drives innovation and growth. By mentoring women entrepreneurs and providing them with the necessary tools to succeed, Unilever has set a benchmark for inclusive procurement practices. The Coca-Cola Company’s 5by20 initiative aimed to empower five million women entrepreneurs across its value chain by 2020. This program provided women with business skills training, financial services, and mentoring, significantly contributing to the economic empowerment of women globally.

One government leading the way is Kenya, mandating that 30% of government procurement goes to women, youth, and people with disabilities. Instituting similar quotas globally can ensure that women-owned businesses get a fair share of procurement contracts.

Let’s challenge the status quo

Equality isn’t just a distant dream – it’s an achievable goal. When we open doors for women-owned businesses, we ignite a chain reaction that benefits everyone. By addressing systemic barriers and fostering inclusive practices, we pave the way for a future where equality in procurement is the norm, not the exception. Legacy contracts might have their place, but they can’t win the bid for a future that is inclusive and diverse. Let’s continue to challenge the status quo, innovate, and lead with purpose. Economic growth isn’t just a byproduct; it’s the reward for creating a fair and inclusive procurement environment. As WEConnect International, a global network that connects women-owned businesses to qualified buyers around the world, says, “Buy from women and change the world.”

We invite companies, governments, and individuals to join us in this mission. Let’s collaborate, innovate, and create a world where every woman-owned business can thrive. The $4tn opportunity is within our reach – let’s seize it together.