Can digitization help female entrepreneurs transcend their ‘glass walls’?

The views expressed in the Let’s Talk Development blog are solely those of the author(s).
 

Glass Walls

Societal norms, childcare responsibilities, and safety concerns often form “glass walls” that limit women’s ability to move and seek work opportunities.

Recent evidence from France, for example, found that 14% of the residualized wage gap between men and women can be explained by differences in commuting-time preferences. This is the unexplained portion of the overall wage gap after accounting for observable factors such as education, experience, and occupation. In Pakistan, experimental evidence revealed that women required compensation equivalent to half of their monthly household expenditure to attend a training just outside their village border, suggesting that social norms keep women from crossing the village border. In Saudi Arabia, recent evidence also highlights that perceived social norms keep women from working outside the home. 

Given the constraints on women’s mobility around the world, home-based entrepreneurship has emerged as an economic lifeline for many. Yet, without access to markets and networks, female entrepreneurs operating behind closed doors may end up selling within a small circle of friends and neighbors, limiting the ability to grow their business.  
 

Virtual Windows

Against this backdrop, digitalization is potentially a solution that can help female entrepreneurs overcome glass walls, allowing them to reach broader markets from home. For now, it is unclear whether online market access can unlock growth for mobility-constrained women, especially those living in conservative settings. Indeed, if these are more likely to be subsistence entrepreneurs with limited resources, control, time, or larger entrepreneurial aspirations, then the promise of digitalization may fail to materialize among them.
 

Research Question and Program Design

 The study examines the promise of digitalization for female entrepreneurs in the context of Jordan, a country with one of the lowest female labor-force participation rates in the world. Within the realm of digital access, the focus is on the role of social media, given its extensive reach in developing countries, with 2.94 billion monthly active users on Facebook alone, as of 2022.

To test the promise of digital market access through social media, recruited female entrepreneurs were given a bundled intervention that included:

1. Virtual support to create and manage a digital storefront through Facebook business pages. Female entrepreneurs in the treatment arm received access to logistical support to help them create and manage a business page for six months. Each page had a business logo, product pictures, and information on the business’ type, location, contact information, and delivery information if offered—all of which were sent by the participants to the support team. For women that already had a page, the support team reviewed it and offered support in managing it as needed. 

^{An example of a created page.}

2. An online training program. Additionally, female entrepreneurs in the treatment group had access to an online training created and shot in collaboration with local female influencers. The training had 30 videos of around 10 minutes each covering a collection of locally curated best practices for businesses to adopt on WhatsApp, Facebook, and Instagram. Throughout the training, an emphasis was placed on the importance of reaching new customers beyond one’s immediate circles of friends and family, all while respecting local norms around women’s visibility in online spaces.

^{Images of the online training.}

Broader Markets, Better Business Outcomes

After six months of hands-on support, participants saw improvements in their businesses, though some parts of the intervention proved to be more effective than others.

• Positive business outcomes: Business survival rates were significantly higher among the group of female entrepreneurs that received the bundled support. Treated businesses also saw a significant increase in their number of clients and in weekly revenues, compared to the control group.
• Low digital training engagement: However, while most participants opened the online training link, less than 20% watched an hour or more of the training. This suggests that logistical support and outsourcing in setting up digital storefronts had more impact than digital training.
• Broader markets: Participants using Facebook for marketing attracted more clients outside their personal networks and reduced reliance on store credit, which is often requested by family and friends.
• Effectiveness in overcoming mobility constraints: Low-mobility women witnessed a higher increase in business survival, revenue, and client acquisition relative to women with high physical mobility (as measured at baseline). This suggests that when adequate support is provided, online market access can help unlock the growth of talented but mobility-constrained female entrepreneurs.
   

Supporting Women Entrepreneurs

Although this study was undertaken in a setting with traditional social norms (see Kaasolu, O’Brien, Hausmann, and Santos 2019), mobility constraints are faced by women across the cultural and economic spectrum. Given the lack of flexible and home-based employment in low to middle-income countries, entrepreneurship remains an economic lifeline for many households. The findings of this study highlight that digitalization can open windows of opportunities for female entrepreneurs. Yet, without adequate support, its promise may fail to materialize among those that need it the most. 

^{This study contributes to our understanding of the constraints and policy options to facilitate jobs for women and support the growth of their businesses in low- and middle-income settings.  This work is part of the body of research underpinning the World Bank’s Center for Research on Women and Jobs, a research initiative led by the World Bank's Development Research Group in collaboration with the Bank's regional Gender Innovation Labs and other key partners to coordinate policy research efforts on women and jobs.}