Going Digital – Indonesian Women Micro- Entrepreneurs Surviving the Pandemic

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two Indonesian business women smiling and chatting

The regressive impacts of the COVID-19 pandemic has created new challenges for women with  up to 100 million people  expected to fall into extreme poverty. Global remittances from job losses for migrant workers are expected to fall by 19.7 percent to around US$445 billion, compared to US$554 billion in 2019. Many of these migrant workers are women and  Mckinsey reports that  women’s  jobs are 1.8 times more vulnerable to this crisis 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.  McKinsey Global Institute reports  that   improving women’s economic empowerment in Indonesia can boost the economy by USD 135 billion each year.

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. 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 leaders discussed how to support women-owned micro enterprises through the pandemic; how can they have adapted and sustained their businesses; how digital platforms helped; and what are the policy enablers and support that they need? The Panel was moderated by Anna Winoto,  a long time human development leader in the public sector; and comprised: Stella Tambunan, the 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, a prominent public figure who champions tolerance, peace, and prosperity in Indonesia, and advises the Indonesian Government on anti-terrorism and anti-radicalism, delivered the Keynote Address. She is an active proponent for leveraging technologies for economic empowerment, especially for grassroots communities. She emphasized the benefits of empowering women economically, beyond income dimensions and impacting on peace, security, and access to justice. 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 (MSB) 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, as well as improved social status, bargaining positions and influence on village policies by providing rural women training in digital media. The UN reported that younger and women-owned businesses deployed  a wider range of digital solutions, and 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; changing the scope of the business to cater to local customer preferences; improving service to other platform users including drivers to remain competitive; and using other digital platforms to direct more customers to their platform.

Dedicated access to smartphones was key. Not all MSB women owners had access, and sometimes they shared their smartphones with their children or husband. Digital literacy was also an issue and 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.  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, private sector and civil society are needed to expand the benefits of digitization to more women, more micro and small businesses.   

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 Asia Pacific. Digital technologies can help  equip them for the industries that will thrive in the automation age.  Women 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.   Women’s equal participation is vital to stability, helps prevent conflict, and promotes sustainable, inclusive development.

~With guest contributor, Anna Winoto

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