This article is part of a series in which OECD experts and thought leaders — from around the world and all parts of society — address the COVID-19 crisis, discussing and developing solutions now and for the future. Aiming to foster the fruitful exchange of expertise and perspectives across fields to help us rise to this critical challenge, opinions expressed do not necessarily represent the views of the OECD.
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Women entrepreneurs, particularly in low- and middle-income countries like those supported by the Cherie Blair Foundation for Women, face many complex challenges in setting up, growing and sustaining their businesses. From gender stereotypes, a lack of access to finance and complex societal threats like poverty, political instability, enormous uncertainty and even war, a range of different barriers can prevent women’s businesses from thriving. It is particularly striking, then, that according to our new research report, which draws on responses from 125 women entrepreneurs across 32 countries, nearly one in ten of the women entrepreneurs who responded (9.2%) reported that the impact of the COVID-19 pandemic was the single greatest challenge they had ever faced.
The vast majority of the women we surveyed (83.8%) reported that the pandemic had a negative impact on their business, while nearly four in ten (38.5%) reported that their business will or may have to close as a result. This is devastating news not just for emerging markets, where approximately 30-37% of all SMEs are women-owned, but represents a very real threat for women entrepreneurs who rely on the income generated by their businesses. Forty-three point eight percent of respondents whose businesses are at risk of closing due to the pandemic told us that they would struggle to support their families if that happened, which could put children all over the world at risk of falling into poverty.
Many women entrepreneurs have therefore had to completely adapt their businesses so that they can continue to put food on the table—particularly as many governments in low- and middle-income countries have not provided financial compensation for loss of income caused by the pandemic. For example, Dafne, a woman entrepreneur from Mexico and graduate of our Road to Growth programme, used to run a successful events management company before COVID-19. Following the onset of the pandemic, Dafne pivoted her business completely and began making and selling PPE equipment instead. Other entrepreneurs such as Wangari, a woman entrepreneur from Kenya who runs a soap manufacturing business and is a user of our HerVenture business skills app, began selling online so that customers could access her products safely.
At the same time that many women’s businesses are struggling to survive, we are also aware that many other women have had to become entrepreneurs due to necessity caused by the pandemic. Many lost their jobs due to the economic impact of COVID-19—40% of all employed women globally work in the four most hard-hit sectors by the coronavirus crisis, compared to 36.6% of men—and plenty also saw a loss of household income from other family members losing their jobs. Needing an income to support themselves and their families, many women quickly became entrepreneurs for the first time this year: they will need support for their businesses to flourish and grow, particularly as we can expect most of these businesses to be informal and vulnerable.
If these new entrepreneurs—as well as existing women business owners—are enabled with equal access to the knowledge, skills and resources more readily available to men, we will see the economic uplift societies desperately need post-pandemic. The Foundation’s own research with Boston Consulting Group in 2019 showed that up to USD 5 trillion could be added to the global economy if the gender gap in entrepreneurship is closed. At this time of enormous economic loss and uncertainty, the untapped potential of women entrepreneurs could be the key to rejuvenating economies all over the world.
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Governments and policy makers have a crucial role to play in making sure that women entrepreneurs, and their businesses, are here to stay. Firstly, it’s important that women entrepreneurs are able to survive and thrive through the COVID-19 pandemic through fiscal support packages designed specifically for women-owned MSMEs. Putting women entrepreneurs front and centre of economic policy, and ensuring equal access to finance across all the available sources, means removing discrimination from the process of applying for finance. Secondly, legislators should urgently review and repeal policy and legislation that is discriminating against women entrepreneurs or inhibiting their business success. Finally, we ask that governments support the collection, analysis and dissemination of gender-disaggregated data on micro, small and medium-sized enterprises (MSMEs) and entrepreneurship to ensure that legislation, policy, support packages and financial products and services take into account the needs of women entrepreneurs.
As Professor Margaret Kobia, Cabinet Secretary and Minister of Public Service and Gender, Kenya explains: “Where women are engaged, they are participating, communities prosper. But where women are also not participating, you can see also communities suffer”. Women are the backbone of communities all over the world, and their businesses uplift families, communities and entire societies. Through taking very seriously the need for a gender sensitive business environment through the measures above, and recommended by our research report Women Entrepreneurs: Surviving the Pandemic and Beyond, governments can ensure that they are supporting women entrepreneurs and working towards a swift, equitable and prosperous recovery.
|Tackling COVID-19||Gender Equality||Entrepreneurship|
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