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The primary obstacles to women’s access to the digital economy are the same as those preventing access to the formal economy. Overcoming the digital gender divide to increase female entrepreneurship and M/SME participation in LDCs and emerging markets first requires commitment by governments to pass common sense policy and institutional reforms. The high costs to join the formal-digital economy are indeed exacerbated by poor ICT infrastructure, low internet penetration, low technical capacity, and limited access to capital, but three familiar barriers persist in many markets: disincentives to join the formal economy; inflexible labor laws; lack of trust in contract enforcement (on and offline).
(i) Disincentives to formalize are often high cost and time barriers to business registration, vulnerability to bribery and extortion, arbitrary rules and taxation, etc.
(ii) Inflexible labor laws prevent entrepreneurs from hiring staff to grow into larger SMEs, limit risk taking requiring short-term resource investment in technical capacity or skills, and prevents educational transfer among women in industries.
(iii) Lack of trust in contract enforcement on and offline disincentivize commerce, especially B2B transactions in a weak legal environment.
Addressing the gender digital divide in commerce in many economies first requires an adequate and equitable business environment offline. Reforms that promote technological transfer or greater access through subsidies are not sufficient to overcome the larger market obstacles facing female entrepreneurs and small business owners.
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