A Double Bias

For minority women, the challenge is even greater, according to Theresa Conduah, partner, Haynes and Boone (US), as they “face double bias due to both their race and their gender.”

“The lack of mentorship and networking opportunities are other challenges faced by women and minority entrepreneurs. These opportunities can be a valuable resource for small businesses in the early stages and can impact access to funding and growth opportunities,” she added.

These barriers are exacerbated in countries where patriarchal structures and traditional gender views hold sway. While low-income countries in sub-Saharan Africa boast the highest female entrepreneurship rate globally, the long-term aspirations of women business owners are frequently thwarted, explained Uwa Ohiku, senior partner, Jackson, Etti, Edu & Co. (Nigeria).

“Financial institutions often approach their requests with skepticism, which is deeply rooted in long-standing cultural biases. These center around their perception of women in the ‘traditional’ role as homemakers, rather than business owners,” she said.

“In addition, the requirements by the traditional banking system to provide collateral which may not be easily raised and other stringent processes can derail the quest for funding, resulting in women and minority businesses having to fall back on whatever savings they have or loans from family and friends.”

The Impact of COVID-19

The pandemic has further intensified the disparities faced by women and minorities who own businesses. According to a working paper released by the National Bureau of Economic Research (US) in June 2020, the number of active business owners in the United States plummeted by 3.3 million, or 22 percent, between February and April 2020.

African-American self-employed businesses owners were hit especially hard, experiencing a 41 percent drop, while Latinx and Asian business plummeted by 32 and 26 percent, respectively. By contrast white business owners only suffered a 17 percent decline. Women-owned small businesses were also disproportionately hit, by 25 percent.

“Black-owned and other minority-owned businesses closed more rapidly than white-owned businesses during the pandemic. While federal relief programs were available in the United States, small business owners, especially minority-owned businesses, struggled to navigate the funding programs,” said Ms. Conduah.

There are also issues around recognition. “Generally, communities and consumers want to support such businesses, but they must be able to find and know them,” said Virginia Carron, partner, Finnegan (US).

“A strong, but easily identifiable, brand that informs or at least suggests to the consumer and community that the business behind the brand is women or minority-owned can help these businesses overcome this hurdle,” she added.

SMEs have been the backbone of the European economy, accounting for more than two-thirds of the workforce, according to McKinsey & Company.

The consultancy firm’s 2020 survey of more than 2,200 SMEs in five European countries—France, Germany, Italy, Spain, and the United Kingdom—found that approximately 70 percent of SMEs said their revenues had declined because of the pandemic.

Meanwhile, the Organisation for Economic Co-operation and Development (France), which represents the views of 35 member countries in Europe, also highlighted some troubling findings. According to its June 2021 report, “SME and Entrepreneurship Outlook 2021,” government support has been less effective at reaching the self-employed, smaller and younger firms, women, and minority entrepreneurs in Europe.

These woes could be compounded by a lack of intellectual property (IP) protection. A 2021 survey carried out by government agency YouGov (UK) of SMEs in the United Kingdom found that only 21 percent have taken steps to fully protect their IP assets.

These statistics come as little surprise to Olaf Gillert, partner, Taylor Wessing (Germany), who attributes this gap primarily to a lack of funding or awareness of IP.

“If startups are very professional, they will try and secure IP rights from the beginning,” he suggested. “But they won’t if they are inexperienced, are less concerned about IP rights, and need their funds for other expenses.”

If they secure any trademarks at all, it is on a low scale, Mr. Gillert added, noting: “Then they run into problems if they want to grow; that is something I see with inexperienced SMEs.”

The YouGov survey found that when SME owners were presented with a list of IP assets, a mere 18 percent of them had registered trademarks. Yet, 56 percent confirmed that they had domain names—making them the most-owned IP right.

It is a worrying trend, but it does reflect reality, said Mr. Gillert. “Registering a domain is so easy and inexpensive. It becomes problematic when companies start using a domain name for their business as a brand. For many SMEs, if they have more than 100 domains, it is simply too expensive to register a trademark,” he noted.

Brand Support

María José Sánchez, intellectual property coordinator, Colombian Coffee Growers Federation (FNC) (Colombia), agreed that efforts by both agencies and larger brands when supporting women-owned businesses in terms of guidance and funding are crucial for ensuring progress

According to GEM’s report, Latin America has one of the lowest rates of established female entrepreneurship globally (6.5%), while Colombia ranks last in the rate of solo female entrepreneurship (2.3%) worldwide.

The FNC has, however, campaigned to support women in the region’s vital coffee sector by partnering with leading companies such as Bancolombia, Colombia’s largest private bank, and with Nestlé S.A. (Switzerland), the world’s largest food and beverage company.

“Women have become more important players in the coffee sector in Colombia over the past decade. They are trying to develop new coffee brands, and to commercialize and export them to other markets, but it has been challenging due to their lack of resources and the traditional male-dominated nature of the industry,” explained Ms. Sánchez.

As part of a strategy to promote greater gender equality in the sector, the FNC, Bancolombia, and Solidaridad (the Netherlands), an international nonprofit that fosters more sustainable supply chains, have launched a special “Female Coffee Growers” product under Colombia’s biggest coffee brand, Juan Valdez.

Produced by 22 members of the Association of Female Coffee Growers of Colombia’s Viotá and Tequendama regions, the coffee is now sold in 221 stores throughout the country.

The FNC also partnered with Nestlé’s subsidiary brand, Nespresso, to design and implement a program for agronomists—scientists working in the country’s coffee sector—to help them to better address inequalities and reduce the industry’s gender gap.

“These projects make a huge difference for women and give them visibility,” observed Ms. Sánchez. “Through the brand, they give them a voice and help tell their story, and consumers become aware of the role women play in the production of high-quality Colombian coffee.”

Recognition and Visibility

Other brands helping to empower women include luxury fashion brand Cartier (France), which runs a global Cartier Women’s Initiative in partnership with the INSEAD Business School (France). Founded in 2006, the initiative hosts an annual competition for female entrepreneurs from seven regions worldwide and provides the victors with hundreds of thousands of dollars in prize money, scholarships, and ongoing support for the growth of their businesses. It has helped support 262 women entrepreneurs in 62 countries since its creation.

Elsewhere, the Goldman Sachs Group, Inc. (US), a leading global investment banking, securities, and investment management firm, hosts an initiative called 10,000 Women that offers tools and training to women business owners in 56 countries. In a joint effort, the Goldman Sachs’ 10,000 Women and the International Finance Corporation, a member of the World Bank Group, launched the Women Entrepreneurs Opportunity Facility and have contributed up to US $600 million to enable approximately 100,000 women entrepreneurs to access capital.

Ms. Scott and Ms. Clancy both point to initiatives such as the Amazon Black Business Accelerator as vital for delivering much-needed financial support, strategic business guidance and mentorship, and marketing and promotional support to Black entrepreneurs.

Noted Ms. Clancy, “Large brands have a great amount of power and can deliver changes at lightning speed.”

As Ms. Conduah pointed out, more leading brands have plenty of scope to follow suit.

“From working with suppliers to advertising spend, there’s a wealth of opportunity for brands to commit to supporting minority-owned products and bringing these businesses into stores and online,” she said. “Brands should look for ways to partner with and support women and minority-owned businesses to amplify and increase their visibility.”

Keys to a Successful Partnership

According to Ms. Scott, one of the most effective actions brand owners can take is to participate in pro bono initiatives, such as INTA’s Pro Bono Clearinghouse.

The Clearinghouse matches eligible clients facing trademark issues with member attorneys who volunteer to provide services free of charge. A global initiative, it is the only program of its kind dedicated primarily to trademarks—and it is a win-win for both brand practitioners and entrepreneurs.

“We all believe that IP protection is an important step for any business,” Ms. Scott said. “If we can help demystify and streamline that process, that’s a huge help.”

For more on this topic, attend the panel session Partnering for Change: How Brands Help Grow Minority and Women-Owned Businesses (today, November 15, 1:15 pm–2:15 pm EST).

Moderator: Fiona Scott, trademark paralegal, Amazon.com, Inc. (US)

Speakers:

• Paula Clancy, managing attorney, Clancy PC (Canada)
• Dean-Paul Hart, president, Compac Industries (US)
• Brandi Neloms, PR manager–Small Business, Amazon.com, Inc. (US)

Video courtesy of Adobe Stock / HUMAN