Entrepreneurs are struggling during the pandemic
Updated: Nov 8, 2020
After 10 months of lock downs and economic disruption, one has to ask; How are the world’s entrepreneurs dealing with the ongoing, and protracting covid-19 crises? What is the situation for female entrepreneur?
The ongoing crises has unfortunately heavily affected entrepreneurs. Impact of crises are in addition never gender neutral, and Covid-19 is not an exception. According to the World Economic Forum, is the pandemic the biggest setback to gender equality in the last decade. The finding is supported by UN Women, who claim that the pandemic will push 96 million people into extreme poverty by 2021, 47 million of whom are women and girls.
Regarding entrepreneurs, The World Bank surveys on Small Businesses along the pandemic (2020) found that female-owned businesses were 5,9 percentage points more likely to have closed their businesses than male-owned businesses during Covid-19, and the gender gap appeared in all regions observed.
Women-owned businesses seem to be more vulnerable for the ongoing crises due to lower average firm age and size, but also because they are concentrated in the industry sectors hit hardest by economic shutdowns. Tourism and consumer-focused businesses appear to have been in particularly hard hit, which are services where women business owners are more likely to be concentrated.
Norms and cultural customs are well-known hindrances for female entrepreneurs - in particular in developing countries. (Actually, are women entrepreneurs in developing countries to a larger degree hindered by social and cultural factors than by limited access to financial services) Women's domestic responsibilities is however a key hinderance for female entrepreneurs that har arisen among female entrepreneurs globally due to the ongoing pandemic. Since the COVID-19 outbreak, are working mothers interrupted at work 50% more than fathers are. Female entrepreneurs are also taking a larger portion of the extra burden of domestic and care responsibilities related to the lockdown and the ongoing pandemic crises than men.
Estimates from ongoing research suggest that informal workers globally have lost an average of 60% of their income due to the pandemic. The developing countries are bearing the heaviest burden: 81% of informal workers in Sub Saharan African and Latin America, 70% in Europe and Central Asia and 22% in Asia and the pacific lost their income due to Covid-19. Both men and women are informal workers in low-income economies, but again, women are to a larger degree than men part of the informal economic sector, and thus excluded from services, responsibilities and safety that is found within the formal sector. According to ILO's projections, may 140 million full-time jobs be lost, and women's employment is 19% more at risk than men are in the ongoing crises.
Finally, to what degree did the government incentives provided to encourage economic activities during the pandemic encourage entrepreneurial activities? According to Global Entrepreneurship Monitoring’s report on the Coivd-19 impacts on entrepreneurship, were national governments incentives in the first phase of the pandemic primary focusing on securing workplaces, assuring financial illiquidity and incentivizing business model modifications (or innovations). Liquidity and access to funding, however, turned out to become even a greater challenge during the pandemic. Simultaneously, are sources of funding for many entrepreneurs said to be drying up, and there are currently not enough examples of policies that have been specifically developed to stimulate entrepreneurship under these special circumstances.