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What is the "informal" sector, and why does it affect Cambodian women?

A prerequisite to developing and launching SHE was extensive research into the position of women in business in Cambodia. Through this, we learnt that nearly 80% of Cambodian women participate in labour, and somewhat surprisingly, more than half of private business is owned by women. Sounds pretty good right? But as in most cases, the statistics fail to convey the lived reality. Women are certainly active in the Cambodian economy, but they continue to face gender discrimination, income disparity and job insecurity.

In particular, of the 65% of businesses owned by women, the vast majority of them exist in the informal sector. Given that women are over-represented in the informal sector worldwide, this was less surprising - in most developing countries, the informal sector is the primary source of employment for women. But what is the ‘informal’ sector and what implications does this have for women in business in Cambodia?

Broadly, the informal sector comprises of labour market activities that fall outside of government regulation and on which taxes are not paid. In developing countries in particular, the informal sector is a “pervasive and persistent economic feature”, mainly because it provides individuals with income where earning opportunities in the formal sector are scarce. This may take the form of anything from subsistence farming to street vending. 

Given this, in developing countries in particular the informal sector on its own is not a bad thing. Indeed, the informal sector is a source of job creation for individuals and families who otherwise wouldn’t be able to support themselves. However, the flip side of this is that workers are operating outside of the regulation of employment and safety legislation. The very ‘informal’ nature of the informal sector means that the work is often unstable and insecure. There are no contracts, enforced working or pay conditions, access to social services such as health-care or leave. In Cambodia, whilst it is relatively easy to find a job in the informal sector, workers face a high likelihood of labour abuse and receive significantly less pay than their peers in the formal sector . This insecurity has meant the informal sector has also earned the label of the “unprotected sector”. Basically, for workers relying on making a living in the informal sector, the future is extremely uncertain.

For women in Cambodia this presents a significant challenge. Traditional norms that place sole responsibility for the home on women mean that informal work is one of the only ways they can supplement their families incomes. Thus, many women start their own micro-businesses, often by taking out a small loan, that they can then run in addition to taking care of their families. However, operating within the informal sector, these women have little chance to grow these businesses beyond the subsistence level. The uncertainty of the sector means that long term goals fall victim to day-to-day struggles and often, the women are not able to even make enough to pay off their loans, plunging them into debt.

However, if these businesses were able to grow and formalise, this would be a real opportunity for generating social and economic change. Not only would this create stable income for the women (90% of which the women re-invest back into their families and community), but it would also create jobs for other Cambodians within the formal sector, affording them more security and stability as well as a safer working environment. Our vision is that as women grow and formalise their businesses, they will focus on expanding this opportunity to other women in particular, giving more and more women access to safer, more secure incomes and by extension more independence and decision-making power. So whilst certainly the informal sector will continue to be pervasive in Cambodia for the foreseeable future, growing women’s businesses into small-medium formal enterprises is one way to offer a better quality of life to more Cambodians.

- Written by Prue Allen, WhyDev Fellow at SHE Investments

Is "Innovation" more than just a buzz word?

Innovation. It’s the word that’s everywhere you turn, from business, to politics, to development, to technology, to education. Strike up a conversation around these topics and chances are innovation will get dropped in there at some point. What do you do, what do you support, how do you meet this challenge, how do you become successful? – the answer always seems to come back to the need to innovate. Indeed, the notion of innovation has become so popular, it has been labelled "the buzzword of the decade"[1].

But what actually is innovation? And is it really the answer to all our problems?

Innovation is more than just ideas

Innovation is more than just ideas

Innovation is referred to so pervasively that sometimes it’s actual meaning becomes obscured and diluted. Sweeping statements – for example - I support innovative social entrepreneurs – sound great, but what do they actually imply? Innovation is really just the process of coming up with new ways to solve important problems or surmount pressing challenges. More than just ‘good ideas’, the process of innovation also involves implementation, testing and refining stages to turn ideas into reality. Legitimate innovation requires tangible change.

When you consider innovation in this way, as a process of creating change view new ways of thinking, it’s not hard to see why innovation is so prevalent in the modern vernacular. More than just a means for corporations to retain their competitive edge, innovation represents an opportunity for coming up with new ideas to overcome collective global issues from climate change to economic crisis. Given the glaringly obvious failure of old ideas, innovative thinking to combat these problems is not just a nice refrain, but a strategic necessity. Urama and Acheampong advocate for social innovation; the development of solutions to social problems that are more effective, efficient and sustainable than current solutions.

They point out that “we are in desperate need of a fundamental transformation of social, economic and cultural arrangements. The old paradigm of government aid is simply inadequate to the challenge. What we need instead are creative and innovative solutions for fostering sustainable growth, securing jobs, and increasing competitive abilities”[2]. Innovation, when it involves action beyond the rhetoric, has the capacity to affect widespread social change. Fair trade, distance learning, renewable energy – there are many examples of how innovative processes have resulted in positive impact.

Geeks in Cambodia, a tech-news platform, has designated March as Innovation Month in Cambodia. They note that whilst Cambodia may not be the country that springs to mind as being at the forefront of innovation, innovative solutions are trending across the region as access to technology and education spreads. Smart-phone culture is thriving here, especially in urban areas, and one third of the population has access to the internet. This represents a real opportunity for innovative young people to come together and seek creative solutions to some of Cambodia’s most deeply entrenched social problems. As Geeks in Cambodia point out, “there is still some big gaps in knowledge and creativity in using the technology. We need to foster a culture of playing more with this, and trying new ideas”[3].

Innovation does not need to be confined to technological advances to create social change and growth in Cambodia. There are countless examples of new and innovative ideas that are demonstrating impact. Take for example, the Lady Saving Group (LSG), an informal credit union for women. Faced with the social implications of wedding expenses, where the groom pays for the celebration and the bride thus becomes ‘indebted’ to her husband, the LSG used innovative thinking to come up with a solution. They created a wedding loan with a very low interest rate, encouraging their members to contribute financially to their own weddings and thereby challenge the perceptions that they are something akin to a product in a transaction. The women that have taken up this loan so far have reported feeling like more valued members of their family, with increased decision making power and authority.

Pretty cool right?

At SHE we work with women entrepreneurs. And by nature, entrepreneurs are innovative. Given the potential impact of innovative thinking – to grow businesses, to grow the economy, to provide for families, to solve problems – we are excited to foster an innovative culture with our Program Participants. Innovative thinking and innovative action represents a real chance for Cambodian’s to be agents of positive social change. More than a buzzword, innovation is an opportunity. However, the overuse and generalization of the term is creating confusion of what it is we need when we advocate for more innovation. Michael O’Bryan, founder of the innovation consulting company 360 Thinking points out that we lose sight of the specific skills and behaviors needed to be innovative when this is what we should be focusing on. “Specifically, we need people to possess a series of thinking skills and behavioral traits that result in their ability to discover, develop, and test ideas and solutions that will result in positive changes not only to their prospective fields but also in their daily lives”[4].

Once Cambodian’s have these skills and traits, imagine the future they can create.

- Written by Prue Allen, WhyDev Fellow at SHE Investments

Why men can be crucial for women's economic empowerment

Gender equality is often seen as being synonymous with women. To some extent, rightly so – it is women who bear the brunt of current inequalities, and it is women’s empowerment that is the key to achieving gender parity. However, women’s empowerment is not the only requirement for reaching gender equality.

Husband and wife doing team building activities together during a SHE workshop

Husband and wife doing team building activities together during a SHE workshop

Often, efforts to promote the social, economic and political participation of women focus on women, are designed around women, for women. This has been successful in bringing women and girls voices and experiences to the development agenda and creating tangible momentum towards gender equality, which is incredibly exciting and a cause for great celebration. But women do not exist in a vacuum – their voices and experiences are inextricably linked to the voices and experiences of the men in their lives. And the more you explore this connection, the more you realise that men too have a key role to play in the quest for gender equality; indeed, men are an imperative part of women’s empowerment.

The issue with focusing solely on women when designing and implementing action to progress gender equality is that it promotes a limited, unrealistic understanding of gender relations. Women remain victims to be empowered, men remain perpetrators whom need to be disempowered. Approaches that set men and women apart in this way fail to take into account the agency of individuals and the complex ways their lives are interrelated. Rather than promoting processes of empowerment that will benefit all members of a family or community, approaches that focus wholly on women can have a polarising effect, setting men and women in opposing camps where they must compete for visibility, power, support and authority in their communities.

This polarising process has caught the attention of some organisations. One CARE study investigated men’s responses to their women’s empowerment programs and found that the prospect of change not only unsettled the men, but actually had the potential to negate positive impacts from the program:

“Men expressed fears that their wives would overtake the role of household provider, no longer listen to the men, become proud and disrespectful, or might find other men and abandon their husbands. In response to these fears, some husbands did not give permission for their wives to join village savings and loans associations or took control of women’s earnings. In some cases, domestic violence, separation and divorce increased”[1]

The SHE Incubator Program involves men from the start

The SHE Incubator Program involves men from the start

It is not hard to imagine how similar situations could arise here in Cambodia. Gender roles are deeply embedded in the highly traditional structures that continue to shape social life. Women, first and foremost, remain responsible for the family and the home, whilst men continue to hold economic and decision making power. These dynamics can be seen to be shifting in urban centers like Phnom Penh, but rurally (where the vast majority of the population still resides) tradition holds sway. For organisations like SHE that are working towards women’s empowerment in Cambodia, these gender relations have profound implications. Giving women more independence, agency and decision-making power is crucial. But also important is considerations of how this will be received by the men that are integral to women’s lives. SHE’s Business Incubator Program for instance promotes women’s entrepreneurship to facilitate wider economic and social impact -  but when participants leave the supportive environment of the monthly workshop, they return to pre-existing gender relations. Challenging those relations, implementing their visions and having a stronger voice may foster problems like those outlined by CARE. The participant’s husbands, fathers, brothers or sons may feel threatened by the women's increased agency in a place where the status quo has always prioritised men as the key decision makers.

Programs that focus wholly on women have the potential to create tension. Understanding the ways in which men may impede change when they feel threatened, it becomes clear that the threatening element of gender equality needs to be removed. We need to promote the perception among men that gender equality is their responsibility too, that women's empowerment is as good for them as it is for the women in their lives. It is not about taking power from men and giving it to women, it is about creating equitable relationships in which all people have control over their futures. If men continue to react negatively to women’s empowerment, then the impact of said empowerment is going to be limited. As a report in IRIN[2] pointed out – for as long as men continue to be excluded from processes of women’s empowerment, women and girls will continue to come up against barriers of male power and expectations, structures and beliefs that benefit men over women.

Contrastingly, when men and boys are included in processes of women’s empowerment, the understanding that gender equality is good for everybody grows. Rather than blocking impact, men are able to act as agents to amplify it. Creating this support and understanding is a crucial component of SHE’s Incubator Program – so much so that our Participants are encouraged to bring their husbands or other male family members along to the pre-program workshop. The aim of this is to include the men, fostering an understanding of the benefits and challenges of the program. The hope is that they will become active supporters of the participant once they understand the value of equal opportunities for the women in their lives. This has proved to be vital; having partners on board from the outset as supporters is one of the biggest predictors of future success for participants.

Bringing men into processes of women's empowerment is not about taking a step backwards, nor about promoting the continuation of systems that prioritise men's needs. Rather, it is about creating a new system, based on support and respect, that works for women and men, husbands and wives, brothers and sisters, classmates and co-workers. These are the relationships that shape our lives - and this is why men are crucial to women's empowerment. 

- Written by Prue Allen, WhyDev Fellow with SHE Investments

What does culture have to do with mentoring?

Anyone who has engaged in a positive and productive mentoring relationship will likely attest to the value of having a mentor. Having access to a quality mentor is often of critical importance to successful personal and professional development. The entrepreneurial women SHE works with either own or are starting up micro-enterprises; the value of advice, guidance and support from a ‘wise and trusted’ mentor should not be overlooked.

However, the creation of successful mentoring relationships depends on many factors that are often neglected. In particular, mentoring must be relevant to be effective. Given that the definition of mentoring varies between different cultures, one important, and often overlooked component of mentoring is cultural relevance. How mentoring is culturally understood will determine the very essence of a mentoring relationship. Mentors may be understood as teachers, as supervisors, as role models, as peers or as experts. The word mentoring may not translate or it may hold negative connotations related to power imbalances with the mentoring relationship. What is crucial to understand is that the concept of mentoring is not static, but rather is multidimensional – and implementing a culturally irrelevant mentoring program is unlikely to be much use to any of the parties involved.

Him Sopheak, co-founder/owner of Warm Family and SHE Mentor

Him Sopheak, co-founder/owner of Warm Family and SHE Mentor

Mentoring is a crucial component of the SHE Incubator Program. The opportunity for our entrepreneurs to have access to an inspiring business leader who can provide advice on how the participants can achieve their goals, build their confidence and overcome their challenges is a critical part of the Program. However, the success of the mentoring component of the Incubator Program rests largely on building a mentoring relationship with the cultural and social reality of our participants in mind. There are several components to this:

1. Societal Norms

The participants in the Incubator Program face a specific set of challenges and barriers as women in Cambodia attempting to create and lead successful businesses. Socially embedded gender roles, gendered pay disparity, familial obligations, a lack of female representation in the higher levels of business and politics, access to education and male-centric business practices are but a few of these challenges. For mentors to be able to connect with the women and offer them relevant advice and guidance, they must be able to understand these conditions. For example, Khmer women face a social expectation to be delicate, quiet and deferential to men. If the mentor does not understand this, they may suggest the women assert themselves to gain the respect of their male counterparts, which may ultimately be counter-productive.

2. Hierarchy

Furthermore, Cambodia has a very specific social hierarchy that continues to shape how individuals interact with one another. This hierarchy is based on unequal relations, where the junior partner owes the senior partner respect and obedience. These unequal relationships permeate Cambodian society; subordinates rely on superiors to be told what to do, inequalities between people are both expected and desired. These inequalities are based on many factors including the seniority of a position in a workplace, organisation or family, or even just a person’s age. Sadly, the misplaced perception of seniority based entirely on someone being a foreigner persists. An understanding of this hierarchy is crucial to forming effective mentoring relationships; if the perceived power imbalance between the mentor and the mentee is too great, the mentee is unlikely to be comfortable asking the mentor questions or sharing their struggles.

3. Saving Face

Like in many Asian cultures, saving face and losing face are very important to the Cambodian way of life. Most Cambodians are not prepared to lose face and feel it is very serious when it does happen. It is said that losing face makes Cambodians feel unsafe, frustrated, afraid and angry and can lead to conflict[1]. If the subordinate in a relationship loses face, they often fear to express themselves or talk freely in public. They are likely to become more passive and decrease their contribution to the activity at hand, which may be the mentoring relationship. Indeed, if a mentee loses face, the mentoring relationship will likely be compromised as communication channels and trust will be lost. This is interesting when considering the World Bank’s ‘Mentee Toolkit’, which suggests that mentees initiate meetings and questions and also encourages mentees to correct misunderstandings when they arise. Both of these may be things that Cambodian’s are uncomfortable doing, particularly when the power imbalance dictated by societal hierarchy is present.

SHE's 2016 Incubator Participants engaged in the mentoring process - which they described as 'inspirational'.

SHE's 2016 Incubator Participants engaged in the mentoring process - which they described as 'inspirational'.

When you consider these particular components that are unique to the Cambodian experience, it is clear that a one-size-fits-all approach to mentoring will not only be unproductive, it may also be harmful. However, armed with this understanding, it also possible to cultivate a very successful mentoring program that is relevant and grounded in cultural realities, which can offer benefits to both the mentors and the mentees. SHE’s mentors are also chosen with these factors in mind. The SHE Incubator offers peer-group mentoring, rather then partnering participants one-on-one with mentors who they may find too intimidating to approach with questions or problems. Within the group setting, the participants can take comfort in asking questions on behalf of the group instead of themselves. Individual mentoring is also available on request – when the women are comfortable enough to seek it out.

Furthermore, our mentors are chosen in line with the needs of our participants. Take our latest mentor as an example; Him Sopheak, the co-founder and owner of Warm Family online shop. Sopheak is a Khmer woman who has been confronted with many of the same challenges our participants have faced; she understands the culture, she speaks the language and she knows how to create successful relationships despite hierarchical barriers. The Incubator Participants described her as welcoming and willing to share all of her story and reported being inspired by her journey, rather than intimidated by her success.

None of this is to say that cross-cultural mentoring cannot also be successful and rewarding. However, what is really important is a commitment to understanding the prevailing social and cultural conditions within which the mentoring will take place. Given the prevalence of foreign run organisations in places like Cambodia, this implication is important; it is culturally appropriate behaviour and understanding that will facilitate meaningful mentoring relationships. It is important to remember that successful people never reach their goals alone - creating approaches to mentoring that take culture into account will allow more productive and empowering partnerships. 

- Written by Prue Allen, WhyDev Fellow with SHE Investments

The 2016 Incubator group with a mentor during a field trip

The 2016 Incubator group with a mentor during a field trip