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Jakarta Post

Digitalization: New opportunity, old challenge for gender equality

  • Jamshed M. Kazi, Maesy Angelina, Nila Marita

Jakarta   /   Wed, March 31, 2021   /   01:08 am
Digitalization: New opportunity, old challenge for gender equality Small and medium enterprises (SMEs) participate in an expo at the Jakarta Convention Centre in Jakarta. The Indonesia Export Financing Agency (LPEI) or Indonesia Eximbank is seeking to issue debt paper to partially finance the SMEs. (Kompas/Heru Sri Kumoro)

Half of all micro and small businesses (MSBs) in Indonesia are either owned by women, or women play a key role in operating them. Including small shop owners, street food vendors and the like, these businesses make up the backbone of the Indonesian economy.

The ills of the pandemic, however, have led to declining incomes and women MSB owners are disproportionately unequipped to cope. This underlines the need to support women MSB owners and, in doing so, contribute to the country’s overall economic recovery. 

According to the Statistics Indonesia (BPS), women MSBs are at the forefront of adopting digital tools to keep afloat during the pandemic. But, what does it actually mean for them to utilize these tools to cope with the challenges, such as limited revenue streams due to physical distancing measures?

UN Women and Pulse Lab Jakarta recently released a research report that investigates this issue, entitled ‘Leveraging Digitalization to Cope with COVID-19: An Indonesia case study on women-owned micro and small businesses’

Funded through the UN COVID-19 Response and Recovery Multi-Partner Trust Fund (COVID19 MPTF) and conducted in partnership with Gojek and with the support of the National Council for Financial Inclusion of Indonesia (S-DNKI), the research found that the use of digital platforms to sell products and services is helping women-owned MSBs in the food and beverage sector to keep their businesses afloat and provide for their families.

Furthermore, 82 percent of women MSB owners surveyed indicated that using digital solutions, such as GoBiz, Selly, and MokaPOS allowed time flexibility to better juggle work and domestic responsibilities at a time when care work is crucial.

Yet importantly, the benefits of digitalization are not equally experienced by all women MSBs. Analysis showed that digital tools were particularly useful if the business was less than a year old. Inequality in terms of infrastructure, digital skills, affordability and availability of time also inhibit some women's ability to adopt and navigate new digital tools. 

As the Indonesian government will continue to focus on economic recovery in 2021, now is an opportune moment to create synergies between rebooting both economic growth and progress on gender equality. So, what can we do to support women MSB owners in leveraging digital tools to keep the lights on at work and at home?

Bridging data gaps is one of the critical first steps towards understanding the full impact of the pandemic, particularly the gender dynamics within the MSB sector. Investing in sex-disaggregated data collection and gendered analysis can better inform targeted policy interventions, including monitoring the implementation of social protection and stimulus programs.

For instance, insights from the data highlighted that women who own informal MSBs were the least likely to have access to benefits such as those provided under government programs including Indonesia’s National Economic Recovery (PEN), Program Keluarga Harapan (PKH) and Kredit Usaha Rakyat (KUR). This evidence can and should be used to tailor recovery plans and ensure that effective measures are in place to support these groups of women entrepreneurs.

Second, women are more likely than men to be informally employed, and many of them rely on MSBs for their livelihoods. Cash transfers, fiscal stimulus packages, and working capital loans or credit guarantee programs for MSBs, including informal MSBs, can help them cope and revitalize the economy. Targeting women-owned MSBs, particularly those operating informally should be a key priority in the COVID-19 response to ensure equal opportunities and accelerate economic recovery.

Third, addressing the unequal distribution in unpaid care and domestic work is key to removing barriers to women’s economic participation, especially in the context of COVID-19 recovery. Digitalization and the use of technology will be most helpful if they can help entrepreneurs and/or MSBs better balance home and work responsibilities. Promoting digital literacy among women MSB owners is also necessary to support this shift.

Fourth, supporting women entrepreneurs will require a multi-stakeholder approach. Public policy should be complemented with actions stemming from cross-sectoral partnerships between government, civil society organizations, and the private sector. Whilst 43 percent of the new merchants joining GoFood are first-time business owners, technology or financing alone is not enough to help these young businesses thrive. Instead, a multi-dimensional approach comprised of access to capacity building, to markets and to loans can have a more lasting and meaningful impact.

There is no one-size-fits-all response to the COVID-19 crisis, and therefore not one of these four solutions is more important than the others. The different characteristics that define men and women business owners, from their sex and location, to the size of their business and level of formality, have motivated them to adopt different solutions to cope with crisis.

The coping strategies deployed by Indonesian business vary greatly depending on their different characteristics, which can be visualized by moving these toggles.

Ultimately, these recommendations point to a more inclusive strategy for PEN program that should be based on gender data and evidence, stronger targeting of women-owned MSBs, addressing unequal unpaid care and domestic responsibilities, and multi-sectoral partnerships to promote a robust and sustainable economic recovery.

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Jamshed M. Kazi is UN Women Indonesia representative, Maesy Angelina is social systems lead at Pulse Lab Jakarta, Nila Marita is chief corporate affairs at Gojek.