Going Digital – Indonesian Women Entrepreneurs Surviving the Pandemic

The COVID-19 pandemic has regressed progress and created new challenges for women. Experts expect up to 100 million people to fall into extreme poverty. Moreover, job losses among migrant workers will likely reduce global remittances by 19.7 percent, bringing them down to around US$445 billion from US$554 billion in 2019. Many of these migrant workers are women. Furthermore, McKinsey reports that this crisis makes women’s jobs 1.8 times more vulnerable than men’s jobs.

Women make up 39 percent of global employment but account for 54 percent of overall job losses. There has never been a more important time to address women’s economic participation. Additionally, the McKinsey Global Institute reports that improving women’s economic empowerment in Indonesia can boost the economy by USD 135 billion each year.

Indonesian Women Entrepreneurs

In Indonesia, the fourth-largest nation in the world, the pandemic has exposed women’s vulnerability to economic shocks and has deepened pre-existing gender inequality. Female employees’ working hours have reduced by 50 %, compared with 35% for males. Additionally, women’s burdens have intensified, with many women having to juggle their professional responsibilities with household chores and increased parental responsibilities. A recent survey showed that 82% of  Indonesian women, who depend on income from family businesses, saw substantial declines in income.

Indonesian women play a critical role as owners and entrepreneurs in micro and small businesses. Approximately 99 percent of all businesses in Indonesia are micro, small and medium enterprises. About one-third of these are owned by women.

For International Women’s Day, as part of Amplifying Her Voice, a panel of Indonesian women entrepreneurs discussed how to support women-owned microenterprises through the pandemic. They also discussed how they have adapted and sustained their businesses. In addition, panelists talked about how digital platforms helped. They discussed what policy enablers and support they need.

The Panel was moderated by Anna Winoto,  a long-time human development leader in the public sector. The panel comprised: Stella Tambunan, CEO of YCAB Ventures and Chief Financial Officer of YCAB Foundation, a social impact investing and microlending enterprise for women-led ultra-micro businesses; Vitasari Anggraeni, from Pulse Lab Jakarta, a joint data innovation facility of the United Nations and the Government of Indonesia that has assessed coping mechanisms of women-owned micro enterprises and small businesses; Brigitta Ratih Aryanti, Head of Government Relations and Public Policy at GoPay, who focuses on building a cashless society and increasing access to finance for all; and Hanna Keraf, Co-founder of Du’Anyam, a social enterprise that aims to improve maternal health by providing alternative livelihood and employment to subsistence farmers.

Yenny Wahid is a prominent public figure who champions tolerance, peace, and prosperity in Indonesia and advises the Indonesian Government on anti-terrorism and anti-radicalism. She delivered the Keynote Address and is an active proponent for leveraging technologies for economic empowerment, especially for grassroots communities.

Yenny Wahid emphasizes the benefits of empowering women economically, beyond income dimensions and impacting on peace, security, and access to justice. Additionally, she highlighted the need to use digital tools to build economies of scale from such initiatives, “Digital will enable a multiplier effect on women’s economic empowerment and unlock the potential of women entrepreneurs and women-owned micro- and small businesses and will be key to a strong national economic recovery”. 

More than 300,000 micro and small businesses (MSBs) in Indonesia made the shift to digital platforms during the pandemic. A 2017 study on women’s digital literacy in Indonesia found that teaching women how to create content and share information on digital media can open more opportunities for economic and professional growth. It can also lead to improved social status, increased bargaining positions, and more influence on village policies. Researchers found that providing rural women with training in digital media created these benefits.

The UN reported that younger and women-owned businesses deployed a wider range of digital solutions. Messaging apps (WhatsApp) and social networks (Instagram, Facebook or Twitter) were a popular means to reach additional customers. Digital solutions also helped business owners manage work and home responsibilities, including setting up digital platforms to extend customer reach and resolve delivery problems during lockdowns. They assisted with changing the scope of the business to cater to local customer preferences. Besides, they helped improve service to other platform users, including drivers, to remain competitive. Finally, business owners used other digital platforms to direct more customers to their platform.

Dedicated access to smartphones was key. However, not all MSB Indonesian women entrepreneurs had access, and sometimes they shared their smartphones with their children or husbands. Digital literacy was also an issue. Thus, training was critical to achieve the benefits of digitalization, including digital literacy and financial management for MSBs. Technology facilitators were also needed to facilitate the process of adopting and using digital platforms. Women MSB owners were more likely to rely on these technology facilitators from within their immediate network. Additionally, digital payments were also a necessary element.

The discussion highlighted several important lessons. First of all, the principle of equity must underpin all efforts to digitize and scale women-owned micro and small businesses. There are huge disparities in access and capacities for digital uptake, whereby women, poor and remote communities are at a greater disadvantage. Secondly, the human elements of digitization cannot be ignored. Human agents and facilitators are necessary enablers for shifting behaviors. Finally, trust and partnerships are key to increasing the uptake of digital tools and platforms. The users have to trust in the integrity, reliability and security of the system. Partnerships across government, the private sector and civil society are needed to expand the benefits of digitization to more women and more micro and small businesses.   

Going Digital

Women typically invest a higher proportion of their earnings in their families and communities than men. With even a few years of primary education, women have better economic prospects, fewer and healthier children, and better chances of sending their own children to school. GSMA has estimated that there are 1.1 billion unconnected women in low- and middle-income economies in the Asia Pacific. Digital technologies can help equip them for the industries that will thrive in the automation age. Indonesian women entrepreneurs are agents of change in their families, communities, and countries. Increasing the voice and participation of women in the economy is essential. For advancing issues of importance to women on national agendas, with benefits for both women and men. Furthermore, women’s equal participation is vital to stability, helps prevent conflict, and promotes sustainable, inclusive development.

~With guest contributor, Anna Winoto