G7 Summit: time to put women front and centre of the global economic recovery
Our CEO Helen McEachern and Fatou Haidara, Managing Director of UNIDO (United Nations Industrial Development Organization) share their thoughts on putting women front and centre of the global economic recovery.
This crisis should be used as a wake-up call to evolve from business-as-usual. It is time for governments and the international community to embrace measures to level the playing field for women entrepreneurs and ensure their knowledge, experience and great untapped potential are at the forefront of national economic recovery plans, including for sustainable, green and inclusive economies and societies.
Impact of COVID-19 on women entrepreneurs
For women entrepreneurs, the pandemic has meant reduced incomes, temporary and permanent business closures, the dismissal of employees, missed business opportunities and reduced access to often already limited finance and capital. Women-owned enterprises are overrepresented in sectors most vulnerable to the detrimental impacts of COVID-19 – such as retail, hospitality and tourism, and services, as well as manufacturing such as in the textile industry. With children being homeschooled and heightened care needs for older people, there is also an increasing amount of unpaid care work which is disproportionately carried out by women. (Even before the pandemic, most women-owned businesses were on average smaller and had less capital than those owned by men – which results in limited resilience to the economic hit created by the pandemic.) Data analyzed by the COVID-19 Gender and Development Initiative suggests that in every region of the world women are more likely to have been forced to close their businesses because of the pandemic.
Recent research by the Cherie Blair Foundation for Women, based on responses from 125 women entrepreneurs in 32 low- and middle-income countries, provides critical insights into women entrepreneurs’ experiences and challenges in 2020. Most women entrepreneurs responding to the survey reported that the pandemic has had a negative impact on their businesses, and nearly four in ten responded that their business may have to close as a result. Over a third of these women reported they would struggle to afford necessities like food if their business closed down, and almost half of them reported that they have lost out on formal financial investment opportunities due to the pandemic.
With regard to the type of support required, a UNIDO survey[1] on the impact of the COVID-19 outbreak on women and youth entrepreneurs in the manufacturing sector and manufacturing-related services recorded responses of more than 1100 entrepreneurs (759 of them women) from 34 countries. It showed that access to finance, customer retention, market diversification and product development are the areas where women entrepreneurs need the most assistance to recover from the economic repercussions of the pandemic. Also, women entrepreneurs indicated more need for support than men entrepreneurs, again suggesting that the pandemic has had a disproportionately negative impact.
Investing in women entrepreneurs critical
The playing field for women entrepreneurs already needed levelling before the pandemic. The World Bank’s Women, Business and the Law 2021 report shows that laws and restrictions continue to prevent women from entering the workforce and starting businesses. Around the world, women still have only three-quarters of the legal rights afforded to men on average.[2] Women entrepreneurs are also less likely to have access to human, financial and social capital, and globally, only one in three businesses are owned by women.[3] In addition, women are less likely than men to start and operate a business, both in OECD[4] and low- and middle-income countries[5].
While investing in women entrepreneurs is first and foremost a critical issue of economic justice and women’s rights, there is also a strong economic incentive. Joint research by the Boston Consulting Group and the Cherie Blair Foundation from 2019 found that if women and men participated equally as entrepreneurs, global GDP could rise by 3-6%, boosting the global economy by USD 2.5-5 trillion. Unlocking the untapped potential of women entrepreneurs to boost the world economy should therefore be a priority in the post-pandemic recovery.
Time to step up commitments to support women entrepreneurs
Gender-neutral macroeconomic policies and recovery packages will not reach those most in need. In fact, they continue to reinforce existing gender inequalities and contribute to the discrimination against women in economic participation and entrepreneurship. This will leave women – and their families, communities and wider societies – worse off.
Since the Leaders Declaration of the G7 Summit of 7-8 June 2015 identified women’s entrepreneurship as a key driver of innovation, growth and jobs, and respective commitments were formulated in the G7 Roadmap for a Gender-Responsive Economic Environment in 2017, successive G7 Presidencies have continued to advance this cause. The meeting in Cornwall is an opportune moment to further strengthen these commitments and adopt concrete measures for a green economic recovery that empowers women and benefits all. Both national policies and international cooperation should prioritize building more gender-responsive, just and resilient economies, with policies and fiscal packages that address deeply-ingrained inequalities.
In particular, we call on leaders at the upcoming G7 Summit to ensure that post-COVID-19 recovery efforts and fiscal packages support sectors where women are strongly represented and that have been hit hard by the pandemic, such as hospitality and tourism, manufacturing, retail, health and social care. We need concrete budgetary commitments. In addition, measures need to be put in place so that women entrepreneurs have equal access to market opportunities, such as through public procurement, as well as access to finance.
Yet, even these actions will not be enough if structural inequalities persist and discriminatory social norms and legal barriers are not tackled through transformative policies. There is a further need to ensure more gender-targeted and universal social protection mechanisms which are missing in so many countries around the world, and to ensure that macroeconomic policies recognize and address the gender inequalities in unpaid care and other domestic responsibilities.
It is also essential that the voices of women entrepreneurs and their organizations are heard by the international community, including the G7, and that women entrepreneurs are involved in any policy negotiations seeking to ‘build back better’. Today, women make up only 24% of governmental COVID-19 task forces globally,[6] thus creating the risk of perpetuating gender inequalities and leaving women’s needs unattended.[7]
The international community faces a unique opportunity to shape a post-COVID-19 economy to which women and men have equal access and can equally contribute to through their businesses. Our organizations stand ready to collaborate on this endeavour.
