Goldman Sachs will fund management education for women in developing nations, to help them start and expand their own businesses
Thousands of women entrepreneurs in developing countries have started their own businesses in the past few years, many with help from local microfinance banks and nonprofits that issued them small loans and financial support. The concept has taken off, but there has been one key flaw in the model: Most of the women have little, if any, formal education and lack the management skills and financial savvy to take their business to the next level. On Mar. 5, investment bank Goldman Sachs (GS) announced it would change the equation by pumping $100 million into educational projects for these women over the next five years.
In an announcement at Columbia University in New York City, Goldman Chief Executive Lloyd Blankfein said the company is hoping to create a new model of management education designed to help these women learn everything from how to write a business plan to market their own business. The company will be teaming up with a coalition of top business schools, including Wharton, Columbia, Harvard, and Cambridge University's Judge Business School, to develop management education certificate programs at universities in countries such as Nigeria, Rwanda, and Afghanistan. The programs will be flexible and of short duration, ranging from several weeks to several months.
"Not Rocket Science"
Dubbed "10,000 Women," for the number of women it intends to reach by 2013, the program is designed to build on existing programs and create new ones by supporting partnerships between U.S. business schools and universities and schools in developing countries. The program is aimed at women, organizers say, because closing gender gaps in education and employment yields greater returns in economic growth in developing countries. For instance, Goldman estimates that improving female education in the BRIC nations (Brazil, Russia, India and China) and another 11 developing countries can boost per-capita income by as much as 14% over baseline estimates by 2020.
Kathy Matsui, Goldman's chief Japan equity strategist, says that educating women can boost gross domestic product in the target countries by 1% to 2% a year. "That is rationale enough for us to reach out and participate in initiatives like this. It seems like it's not rocket science."
Among the planned projects: Penn's Wharton School will work with American University in Cairo to create a five-week certificate program that will focus on professional leadership, management, and entrepreneurial skills. Columbia Business School will work with the University of Dar es Salaam in Tanzania to create two new certificate programs in entrepreneurship and management. In addition to the partnerships, the schools will collaborate to train professors, develop curricula, exchange faculty, and develop material for case studies. Thunderbird School of Global Management is teaming up with the American University of Afghanistan in Kabul to develop a certificate program and a training program for professors.
"This could be the start of something transformational around the world," says Ruth Simmons, president of Brown University, which will work with the University of Cape Town Business School in South Africa to create a new business training certificate program.
Better Access to Funding and Information
Women in developing countries face three main problems when launching their own businesses: access to finance, business education, and access to a network of mentors, says Maha ElShinnawy, a management professor at the American University in Cairo. For example, women own about 18% of the businesses in Egypt, most of which are supported by microfinance loans and have limited growth potential, she says.
ElShinnaway will help to recruit students such as Eman Yousry, 27, a visual artist who started her own furniture and home design store last year out of her home in Cairo. Yousry sells small coasters, pictures frames, and other home goods and oversees two employees, but she says she has had trouble getting her business off the ground because of her lack of business education. Yousry, who will attend the management program at the American University in Cairo this summer, hopes to learn how to market her business and expand it, perhaps eventually exporting her items to other countries.
"It is very hard because I have many problems, and I don't know how to market myself, manage my employees, and manage my money," Yousry says. "These are the main problems I have. I'm hoping this program will help me learn to run my business the right way and help me solve my problems."
The Mentors of Tomorrow
In addition to business training, the 10,000 Women program organizers hope to create a network of female entrepreneurs and advisers who can serve as role models for aspiring business owners. ElShinnaway says she hopes Yousry will eventually be able to serve as a mentor to women in the program and as an example for case studies the schools will develop on how female entrepreneurs in developing countries overcome societal challenges to become successful business leaders.
Such case studies, they hope, will provide examples that will inspire as well as instruct, ElShinnaway says. "That will be a powerful story that will tell others that like Eman [Yousry], 'I can take my business to the next level.'"