Mastercard report: COVID-19 crisis may set back a generation of women in business

PH still in top 20 economies globally offering most supportive entrepreneurial conditions for women

Women across the world have been disproportionally impacted by the COVID-19 pandemic—a staggering 87 percent of women business owners say they have been adversely affected. Overrepresentation in sectors hardest hit by the economic downturn (tourism, retail, food and beverage, etc.), the pronounced digital gender gap in an increasingly virtual world, and the mounting pressures of child care responsibilities are only a few factors that have left women particularly vulnerable.

In tackling this stark disparity and unlocking the fullest potential of women in business, the Mastercard Index of Women Entrepreneurs (Miwe) 2020 report findings make a compelling case for building on targeted gender-specific policy best practiced internationally.

Now in its fourth year, Miwe highlights the vast socioeconomic contributions of women entrepreneurs across the world, as well as providing insight on the factors driving and inhibiting their advancement. Through a unique methodology—drawing on publicly available data from leading international organizations, such as the Organisation for Co-operation Economic Development and International Labor Organization—Miwe 2020 includes a global ranking on the advancement of women in business in prepandemic conditions across 58 economies (including 15 in the Asia-Pacific region), representing almost 80 percent of the female labor force.

Miwe 2020’s top performing economy is a prime example of gender-specific support mechanisms having swift and significant results. For the first time, Israel tops the Miwe as best economy for women entrepreneurs worldwide, advancing from fourth place in 2019. With an ambition to double the number of female entrepreneurs within two years, Israel’s success has been driven by a focused institutional backing for small and medium enterprises (SMEs)—its ‘Support for SMEs’ ranking catapulted from 42nd place in 2019, to first in 2020.

Of the 58 markets included in the index, 12 moved up by five or more ranks year-on-year, while 10 fell by five or more. Asia-Pacific’s fast-rising markets include Mainland China (+6) and Indonesia (+5) while the largest drops were seen in Singapore (-12), Philippines (-10), Hong Kong (-8) and Vietnam (-7).

The Philippines dropped 10 places from last year’s report to 16th place this year as the most recent report noted that SME initiatives deemed supportive of women in the economy have been scaled back. Despite this, the Philippines still managed to secure a high overall ranking as part of the top 20 economies, which may be attributed to its second place ranking for ‘Women’s Advancement Outcome.’ In the report, the economy retains the lead in terms of representation of women as business leaders.

Last year’s strong performers, the United States and New Zealand—although dropping from first to second, and second to fourth places, respectively—demonstrate that economies with mature gender-focused initiatives still outperform on the global stage through continued focus on advancing conditions for women in business. In both these economies, favorable cultural perceptions of entrepreneurism, the high visibility of female leaders that serve as role models for aspiring entrepreneurs, and supportive entrepreneurial conditions play a crucial role in their success.

It is noteworthy that the majority of economies (34 out of a total of 58 in this report) have healthy Miwe scores of 60 to 70 such as Australia, Indonesia, Mainland China, Singapore, Vietnam and Malaysia while 13 economies have lower scores of 50 to 60 such as Japan and India.

“What the findings make clear is that regardless of an economy’s wealth, level of development, size and geographic location, gender inequalities continue to persist—even prepandemic. What COVID-19 did is that it exacerbated an already problematic situation. It disproportionately disrupted women’s lives and livelihoods to a greater extent than men due to a few preexisting factors: the jobs and sectors women tend to work in, child care and domestic responsibilities and the preexisting gender disparity in business.

Yet, through the pandemic we’ve seen women’s strength and endurance in the face of adversity. If anything, this year has illuminated how vast women’s potential really is. But this moment in time is fragile unless governments, financial services and business organizations come together to do three things: offer systemic support and programs to enable women to survive and thrive in this new normal, equip them with skills to navigate the digital world, and nurture an equitable, accessible financial services system that supports women’s work and entrepreneurship. These are not easy to deliver, but investments like these can yield priceless dividends for not only women, but society as a whole,” said Julienne Loh, Mastercard executive vice president of Enterprise Partnerships for Asia-Pacific.

COVID-19 poses setbacks, offers opportunity

Miwe 2020 also provides initial analysis on the ramifications of COVID-19 on women at work, and draws out effective support policies. Although differing from economy to economy, those proving most effective include expansive relief measures for SMEs—from wage subsidies to furlough schemes and fiscal bailouts—as well as state child care support.

Crucially, the report presents an optimistic outlook for the future of women entrepreneurs. It indicates that the pandemic could prove a catalyst for exponential progress for women in business and an opportunity to course-correct gender bias. It draws on several points to illustrate this, notably:

• The COVID-19 era presents an empowering narrative for women in leadership, providing inspiration at a time when cultural barriers and fear of failure still impede some women from business ventures. COVID-19 has highlighted women’s ability to lead under extraordinary circumstances. Female world leaders such as Prime Minister Jacinda Ardern of New Zealand, Chancellor Angela Merkel of Germany and the leadership of Chinese Taipei Tsai Ing-Wen have presided over some of the most successful efforts in containing COVID-19 while instilling order, assurance, trust and calm. With almost half (47.8 percent) of female entrepreneurs reporting being driven by a desire to contribute to the greater societal good, the impact these leaders have cannot be underestimated.

• Women in business are already demonstrating marked adaptability, despite extensive barriers to success. On the front line, women business owners are adapting to the new world of work with renewed confidence. 42 percent have shifted to a digital business model and 34 percent have identified new business opportunities since the pandemic.

• The “next normal” presents a once-in a-lifetime opportunity to remove existing barriers, driving greater gender participation and parity for women in business. As well as magnifying several fold the many disparities women in business face—from the digital gender gap to financial inclusion—COVID-19 has been an intense stimulus for structural progress.

The report notes that implications of these observations are profound. It further demonstrates the untapped value of women as leaders and, critically, highlights the role of the pandemic in expediating progressive solutions. Leveraging this momentum and championing gender-specific initiatives will be critical to realizing women’s potential and winding down the $172 trillion lost globally (World Bank) due to the differences in lifetime earnings between women and men.

Driving forward inclusion

Sue Kelsey, executive vice president for global consumer products and financial inclusion at Mastercard said: “A crisis will always reveal vulnerabilities in the system, and COVID-19 has done that in spades. We have seen the staggering extent of the disparity women in business face. But unlike any other economic downturn, COVID-19 has also paved the way for considerable progress and we have seen what can be achieved when priority is given.”

The Miwe report is just one component in Mastercard’s broader mission to drive forward the advancement of the disconnected and disadvantaged, with a particular commitment to support and help advance female entrepreneurs and small businesses through initiatives such as its Start Path and Path to Priceless programs. In 2020, Mastercard expanded its worldwide financial inclusion commitment, pledging to bring a total of one billion people and 50 million micro and small businesses into the digital economy by 2025. As part of this effort, there will be a direct focus on providing 25 million women entrepreneurs with solutions that can help them grow their businesses, through a range of initiatives crossing funding, mentoring and the development of inclusive technologies.

Miwe provides world-leading analysis on how women in business are progressing across 58 global economies. Representing almost 80 percent of the international female labor force, the Miwe provides deep-dive analysis on the socioeconomic factors propelling and inhibiting their success.

Through a unique methodology—involving detailed analysis across 12 indicators and 25 subindicators spanning advancement outcomes, knowledge assets and financial access, and supporting entrepreneurial conditions—the index ranks 58 economies according to performance over the past year. Aggregating these scores, the index is able to provide an overall grading of how successful individual economies are in advancing female entrepreneurialism in comparison to peers in pre-COVID-19 conditions.

This year’s report also provides additional analysis on the early ramifications of emergency measures implemented by governments and business for women entrepreneurs in response to the COVID-19 pandemic across 40 global economies.

The Miwe findings provide clarity and understanding for governments, policymakers, stakeholders, businesses and individuals alike wishing to understand the crucial role of women in business and apply learning from global economies.