On India’s largest untapped resource

The conversion funnel
The NEET (national entrance exam for pursuing undergrad medicine education in India) results were announced earlier this week. Unsurprisingly, women comprised 55% of the qualifying students. A little more digging threw up interesting data — this ratio dips to 25% in postgrad and 17% among practising allopathic doctors! This isn’t a problem with just medicine: 47% of all students enrolled in Indian universities are female and yet they constitute only 15% of all urban workers and 25% of rural workers. Conversely, only 22% of all graduating females choose to join the workforce today. As you move to high skill-high wage roles, this disparity becomes even more stark. All of 18% of the workforce at Nifty companies and 11% of the board and executive level employees at finance companies are women.

I see 4 major drop off points in the funnel:

1. The inability to dream big: When a child grows up constantly being told that her KPIs (key performance indicators) are physical appearance, ability to manage a home and raise amazing kids, it’s hard to break out of that mindset and aspire for goals she’s known to lie outside her domain. To make this a little more real, a dated survey points out that only 33% of Indian women have the freedom of movement to go to the market, health facility, and places outside the village alone.
2. Lack of an educational background to pursue said dreams: Without education, fighting off familial forces to break convention and work is a losing battle for the few women who do dare to dream, as education remains a major pre-requisite for employability. The willingness to work itself is contingent on education — according to a labour survey by NYTimes, among women primarily engaged in housework the desire to get a job increases by 50% among the more educated individuals.
3. Restricted access to capital: Women-owned SMEs face higher borrowing costs, are required to collateralize a higher share of loans and have shorter-term loans than male-owned SMEs. Additionally, the rejection rate for loans to women-owned businesses is 2.5x higher than that of men (66% versus 26%), despite gross NPAs (net performing assets, an indicator of loan defaults) for women being lower at 3.8% compared to the industry average of 5% in MSME and 5–7% overall. In fact, women have shown better repayment rates across emerging markets.
4. Maternity breaks: 48% of women under the age of 30 drop off the workforce due to maternity and childbirth, leading to the gender skew we observe especially at middle management and higher levels.

The way ahead
The second most important thing I have learnt at work (the first being — empathy is the most under-rated professional skill) is that pointing out problems without suggesting solutions only pushes your cause so far. My take on how we can address this situation and expedite change that would otherwise take multiple generations to manifest, if at all:

1. Role models — We dream and we fight for things we know we have a non-zero probability of achieving. Encouraging mass media coverage of female leaders in various fields is critical to negate the years of conditioning on gender roles. Honestly, the kind of stereotypical drivel that is passed off as “women-centric content” these days only reinforces the notions we’re trying to erase.
2. Education — There are examples of companies working on high-skill training for marginalized communities in other parts of the world, cases in point: Andela in Africa and Integrify in Finland, dealing with audiences that face similar socio-economic struggles as some of the women in India.
3. Finance — Credit products focusing on this unserved/under-served segment which has empirically shown lower risk (and hence, a good business opportunity) could go a long way in addressing drop off point #3. Promoting financial literacy among women would also be important to counter the reality that most families traditionally transfer accounting know-how exclusively to the male offspring.
4. Freelancing — I believe this is something all of humankind would benefit from, not just women. If there’s a way to objectively quantify quality of work and project requirements to effectively match demand and supply at agreeable price points, with a consistent/predictable flow of talent and projects, the labour composition would be very different from how it looks today.

To scale these solutions, it’d be pertinent to have technology at the core and perhaps partner with foundations or government for early support. If there’s an attractive business model, which one may argue is the only way to build a scalable sustainable company with maximum impact, venture capital might be a good fit as well.

I am not saying we should have more women in the workforce for ‘diversity’ (always think of flora and fauna when people use that word in a professional context to imply they need more women). According to an ET study a few years ago, a sample set of listed Indian companies managed by prominent women promoters fared better than the top 30 firms listed in the BSE in year-on-year growth for the last 5 years. A similar Credit Suisse report observed that companies around the world that have more than one woman on the board have seen a 3.3% higher stock market return than those without any women. In fact, the higher the share of women in leadership, the greater the returns on equity. The business case for having more women at work has been well established and documented. The anthropological case could not be more obvious.

Would appreciate thoughts, feedback, intent and action. :)