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This article was co-authored by Anne Simmons-Benton, Deputy Chair of the US Chapter of the Society for International Development & Caitlin Byrne, Director of the Griffith Asia Institute.
A stark reality to emerge from the devastation of COVID-19 has been the global decline in women’s economic inclusion and entrepreneurial opportunity.
Women-owned firms failed during the pandemic at higher rates due to the lack of equitable financial and governmental support and uneven support for care, even though these firms were in vital areas of the economy.
The 2021 World Economic Forum’s 14th global Gender Gap Report forecasts that it will now take 135.6 years for women to achieve gender parity—instead of the 99 years that it had projected in 2019, the year before the pandemic struck.
Women’s entrepreneurship is under greater pressure in both developed and developing countries. Numerous multi-country research studies from early 2020 to mid-2022 chronicle the disproportionate impact of the pandemic on women-owned and led businesses compared to MSMEs and SMEs owned by men.
A recent study by Global Entrepreneurship Monitor, for example, found women were 20% more likely than men to report business closures due to the pandemic (Figure 1) and nearly half of all female business owners in high-income countries reported closures.
Reports from the OECD, UN Women, the International Labor Organization, the World Bank, the International Finance Corporation, the Women Entrepreneurs Finance Institution (We-Fi) and WEConnect International all present depressingly similar statistics: significant numbers of women-owned businesses closing permanently during COVID compared to male-owned firms. National organisations and chambers of commerce report similar discrepancies by gender.
Emerging consensus about the reasons for this gender divergence, include:
- women often have smaller, younger and less capitalised businesses than those owned by men;
- women are over-represented in service businesses such as health, education, food services, real estate, tourism and retail—all sectors that were particularly hard hit by the pandemic;
- women were significantly impacted by the closure of schools with greater responsibilities for their children’s education;
- the care economy (child and elder care) greatly depends on women and increased demands on women’s time during the pandemic impacted their ability to run a business and/or be employed.
But as Albert Einstein famously said, “In the midst of every crisis, lies great opportunity”.
Thus, since 2020, the Women20 (W20) of the G20 countries has focused on not just Building Back Better, but Building Forward Better. The three co-authors of this op-ed, Co-Chairs of the W20’s Micro, Small and Medium Enterprise (MSME) Working Group, are intensely focused on developing strategies and policy recommendations to strengthen women’s entrepreneurship in the semi-post-pandemic recovery era.
We propose two strategies and four policy recommendations to accelerate women entrepreneurial growth in 2022 and beyond, and urge G20 Leaders to adopt all of them at the Leaders’ Summit in Bali, Indonesia on 15-16 November 2022.
NOW is time for the G20 and the G7 to deliver.
We call on G20 Leaders to:
- Develop a G20 Gender Data Network. This network should collect, analyse and assess robust, sex-disaggregated data, not just on women’s entrepreneurship but for all the innumerable gaps in gender data across all sectors of the economy, and including both urban and rural areas. Progress should be benchmarked, score-carded and reported annually across G20 countries.
- Create National Strategies on Gender Equity and Equality (NSGEE), overseen by the Office of the President or Prime Minister, and designed to achieve gender parity in G20 countries by 2050. A gender impact assessment should be undertaken annually/periodically, and each government ministry should focus on advancing one to two priority issues per year, based on recommendations by the W20 and women in each country. Funding should be provided in an annual national budget, and progress should be shared globally in a G20 annual report. Each national Gender Equity and Equality Strategy should include approaches to address social and cultural biases in women’s entrepreneurship and STEM, consider digital innovation as an opportunity to connect women in the rural areas and to advance women MSMEs, and create an equitable care economy that contributes to a more resilient economy.
We urge G20 Leaders to:
- Develop a model for a Women’s Entrepreneurship Policy Framework, as recommended by the OECD in 2021. Build entrepreneurial ecosystems that support women-owned MSMEs at all stages of development and across all sectors, including rural areas, and provide mechanisms to ensure that women benefit from access to finance (including alternative systems of collateral) and access to markets (corporate and public procurement, international trade and ecommerce). Additionally, ensure that women-owned MSMEs can participate in emerging opportunities resulting from rapid technological change—for example, digital innovation, artificial intelligence, green technologies and STEAM (Science, Technology, Engineering, the Arts, and Math)—so they can be competitive domestically and internationally. [Partnering with the OECD and Global WEP on the implementation plan]
- Allocate a minimum of 1 percentage point of the new global minimum tax of at least 15% on corporations, developed and endorsed by the OECD and the G20 in 2021, to fund women-owned and led MSMEs and scale-ups, to help close the estimated USD $1.7 trillion-dollar funding credit gap, and stimulate GDP growth and job creation.
- Commit $350 million USD additional funding to Women Entrepreneurs Finance Initiative (We-Fi), launched by G20 Leaders in 2017 to deepen and scale its impact over the next five years to 2027. Implement We-Fi’s WE Finance Code in G20 countries, based on the United Kingdom’s global best practices with the Rose Review and the Investing in Women Code Annual Report [Partnering with We-Fi]
- For G20 countries with mature gender-responsive public procurement (GRPP) programmes, including subcontracting, establish targets for women-owned MSMEs for each country and increase procurement by 1% a year to a minimum of 10% by 2032. For countries that do not yet have GRPP initiatives, work with knowledge partners and fellow W20 members to develop consensus, and build a step-by-step process to facilitate GRPP development. [Partnering with the International Trade Centre, a joint agency of the UN and the WTO]
We envisage that Women Entrepreneurs Act (WE Act), a new initiative launched by MSME leaders in December 2021 under the Italian G20 Presidency, will play a critical role in driving these transformational strategies and policy recommendations forward. Upcoming initiatives include advocacy training, creation of virtual peer learning networks, development of a Showcase of Global Women Entrepreneurial Good and Best Practices, development of numerous knowledge partnerships, and creation of action alliances on priority issues.
.‘Building forward better’ requires global leaders to take concrete steps to accelerate women’s entrepreneurial progress and economic inclusion globally. It also puts us on track to achieve gender parity long before June 2156. NOW is time for the G20 and the G7 to deliver.