Digitalization Supports a Boon for Women-owned Micro and Small Businesses Coping with COVID-19

[Press release]

Jakarta, Indonesia – Digitalization and the use of technology has helped businesses, particularly women owners of micro and small businesses (MSBs) to survive the economic downturn cause by the pandemic, according to a new report by UN Women in partnership with Pulse Lab Jakarta and Gojek, with the support of the National Council for Financial Inclusion of Indonesia (S-DNKI).

MSBs are considered the backbone of the Indonesian economy. According to the Indonesian Ministry of Cooperatives and Small and Medium Enterprises (SMEs), approximately 99 per cent of businesses in Indonesia are categorized as micro, small and medium enterprises. Almost half of all MSBs are either owned by women or women therein play a key role in operating them. The COVID-19 health crisis has given challenges to MSBs, as the economic activities slowed down substantially.

 “Up to 70% SMEs faced declining sales caused by social distancing and adaptation of new habits measures, according to the Ministry of Cooperatives and SMEs’ data in October 2020. However, despite challenges, comes opportunities. This is the time we leverage the power of technology to innovate and think creatively,” said HE I Gusti Ayu Bintang Darmawati, Minister of Women’s Empowerment and Child Protection in her opening remarks. “I appreciate the report launched today. The recommendation of the report will be very useful for multisector involved, including for the government as a policy maker. I believe targeted and effective policy to address social challenges must be evidence based.”

With the support of the United Nations (UN) COVID-19 Response and Recovery Multi-Partner Trust Fund (COVID-19 MPTF) and UN Women’s Women Count initiative, the report “Leveraging Digitalization to Cope with COVID-19” has shed light on how COVID-19 has affected women entrepreneurs and women-owned MSBs in Indonesia and the use of digital platforms as a one of the key cope strategies during the pandemic. The research focused on MSBs in the food and beverage sector.

Conducted during September to October 2020, the policy research combined big data analysis with traditional quantitative and qualitative methods. It demonstrates the importance of data innovation and the use of technology in providing evidence to better understand the gender impact of the COVID-19 pandemic on MSBs. Furthermore, it also reflects the importance of multisectoral collaboration as the key enabler for data collection and analysis to inform policy decision making to overcome socioeconomic challenges and to ensure that no one is left behind in Indonesia’s COVID-19 response and recovery efforts.

“Indonesian women play a significant role and has been contributing to the economy as the owners and entrepreneurs in micro and small businesses. With limited resources, it is important to use the combination of data and innovation with specific policy measures to ensure that the National Economic Recovery Programme (PEN) includes targeted support for women-owned small and micro business. We believe this will be key to ensuring Indonesia’s economic resilience and recovery in 2021,” said Jamshed Kazi, UN Women Representative and Liaison to ASEAN. “This report will give important insights on how we can support and leverage the power of technology that empower women to ensure their sustainability, during and post the COVID-19 pandemic.”

"Incentives have allowed people to learn how to use digital technology on their own", said Iskandar Simorangkir, Deputy Minister for Macroeconomic and Financial Coordination of the Coordinating Ministry for Economic Affairs. Iskandar Simorangkir moreover explained that the National Economic Recovery Program has enabled the government to create incentives for different groups including, but not limited to, female micro and small business owners.

Some of the key findings of the report:

• Digitalization is helping women-owned MSBs to survive and even expand if they are young businesses (those established within the past year). More than 50 per cent use more than three digital platforms to conduct business.
• 82 per cent of women noted that using digital solutions helped them to better balance work and domestic and family responsibilities.
• An estimated 75 per cent of women-owned, compared to 78 per cent of men-owned MSBs have taken measures in response to revenue losses. However, women have fewer options in coping with the situation.

“This policy research provides data-informed insights as we continue to advocate for inclusive and effective responses to the COVID-19 pandemic,” said Petrarca Karetji, Head of Pulse Lab Jakarta. “Particularly for women-owned micro and small businesses in Indonesia, it is clear that digital platforms have been helpful, and whilst digitalization alone is not enough, this research can inform recovery strategies and policies needed.”

"We're delighted to partner with UN Women and Pulse Lab Jakarta to support the development of this much-needed study on how women entrepreneurs can leverage technology to cope with the pandemic. The independent result and findings of the study are also aligned with what Gojek has been advocating for, which is to be the best growth partner for our 900,000 merchants, of which more than 95% of them are MSMEs. We're humbled to know that the report finds that digital platform, such as GoBiz, help MSBs survive and expand their businesses amidst the pandemic. It's even more humbling because the women-owned businesses are benefiting from our digital platform. We also find it exhilarating that 82% of women entrepreneurs who use Gojek digital solutions, such as GoBiz, find it helpful to balance home and work responsibilities. This affirms efforts to ensure that our platform is inclusive for all,” Nila Marita, Chief Corporate Affairs, Gojek.

The research underscores the critical need to integrate a gender perspective into the National Economic Recovery Programme (PEN) in response to the COVID-19 pandemic. Recommendations includes investing in gender data and analysis to provide evidence-based policy response as well as targeting women entrepreneurs and women owned MSBs in fiscal stimulus packages and social protection response. It also highlights that digital platform alone will not be sufficient to expand economic opportunities, specific measures including digital literacy, access to finance and productive assets that response to the needs of women are equally important. In this connection, the report calls for promoting greater access to and use innovative technologies to better balance home and work responsibilities during the pandemic. More importantly, it focuses on leveraging cross-sectoral collaboration among-multi-stakeholders, including government and private sector to ensure that both women and men can equally participate in socioeconomic opportunities as Indonesia moves towards recovery in 2021.

To view the report online, visit: https://data.unwomen.org/publications/leveraging-digitalization-indonesia-case-study