COVID-19 crisis could set-back a generation of women in business

New Zealand, Australia, Thailand, Chinese Taipei, Hong Kong SAR, Philippines and Indonesia make the list of the top 20 economies globally offering the most supportive entrepreneurial conditions for women

SINGAPORE - November 23, 2020 - Women across the world have been disproportionally impacted by the COVID-19 pandemic - a staggering 87% of women business owners say they have been adversely affected. Overrepresentation in sectors hardest hit by the economic downturn (tourism, retail, F&B, etc), the pronounced digital gender gap in an increasingly virtual world, and the mounting pressures of childcare 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 practices internationally.

Gender-targeted policies drive forward women's entrepreneurial success

Now in its fourth year, MIWE highlights the vast socio-economic 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 OECD and International Labor Organization - MIWE 2020 includes a global ranking on the advancement of women in business in pre-pandemic conditions across 58 economies (including 15 in the Asia Pacific region), representing almost 80% of the female labor force.

The Ranking: top economies for women entrepreneurs (Asia Pacific economies are in bold)

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 4^th 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 SMEs - its 'Support for SMEs' ranking catapulted from 42^nd place in 2019, to 1^st in 2020.

Last year's strong performers, the United States and New Zealand - although dropping from 1st to 2nd, and 2nd to 4th places respectively - demonstrate that economies with mature gender focused initiatives still out-perform 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.

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 SAR (-8) and Vietnam (-7).

"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 pre-pandemic. 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 pre-existing factors: the jobs and sectors women tend to work in, childcare and domestic responsibilities and the pre-existing 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, Executive Vice President, Enterprise Partnerships, Asia Pacific, Mastercard.

COVID-19 has posed setbacks, but also 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 childcare 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 Dr. 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%) 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 frontline, women business owners are adapting to the new world of work with renewed confidence. 42% have shifted to a digital business model and 34% 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.

Mastercard's commitment to driving forward inclusion

Sue Kelsey, Executive Vice President, Global Consumer Products and Financial Inclusion, 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.

• Download the MIWE 2020 report and supporting assets here.
• View case studies for New Zealand (p23), South Korea (p33) and Indonesia (p51) in Appendix 1