Latin America and Caribbean Need to Reduce Gender Gap in Digital Transformation

• The IDB presents a study mapping the main gender gaps in digital transformation.
• Women’s participation in digital transformation at their organizations is limited by a lack of digital skills and competencies.
• Access to financing is among the main barriers for female entrepreneurs in digital fields.

An Inter-American Development Bank (IDB), IDB Invest and IDB Lab study reveals that 62% of representatives of major institutions and entities in the digital ecosystem in Latin America and the Caribbean think the digital gender gap is a problem in their respective countries. The same proportion believe that women have little participation in digital transformation processes because of a lack of skills and competencies.

According to the unpublished surveys and analysis of recent research in the study The Gender Dimension in the Digital Transformation of Businesses in Latin America and the Caribbean (only Spanish), governments in the region need to implement specific public policies to reduce the gender gap in digital business transformations.

The survey shows that women’s participation in digital transformation processes was less than 50% at approximately half of the organizations surveyed. These organizations pointed to a lack of necessary digital skills and competencies as a primary reason for this lack of participation.

The study maps the main gender gaps in companies’ digitalization processes and recommends that governments help solve this problem through public policies that increase women’s access to and use of digital technologies and reduce gaps related to women’s participation in digital jobs.

“We want digital transformation processes to be guided by strong public policies promoting greater gender inclusion. This will help our region accelerate its growth and promote equitable and fair development,” said Jessica Bedoya, Chief of Staff and Chief Strategy Officer at the IDB.

“This study provides a roadmap for governments to incorporate gender equity into their digital agendas. It reinforces the commitment set forth in IDB Group Vision 2025 to promote gender equity and advance the region’s digital transformation.”

Currently, two-thirds of Latin American and Caribbean countries do not include gender as a cross-cutting pillar when designing efficient public policies for digital transformation of business.

When asked about the main barriers faced by female entrepreneurs in digital spaces, most respondents (73.6%) mentioned access to financing. The survey also found the high burden of family responsibilities among women to be the most common reason why more women are not starting companies in the digital sphere (70%). Moreover, a large majority of respondents (80.2%) believe women-owned digital businesses receive less investment than male-owned businesses.

The survey data is based on responses from leaders of digital transformation agendas in 20 countries in Latin America and the Caribbean and on an analysis of digital public policies in 27 countries in the region. There was a total of 416 responses to the general survey questionnaire between October and November 2021.

Other gender gaps

In terms of access, more men than women have Internet access in over half of the region’s countries. There is also a higher share of men with mobile connectivity in 70% of Latin American and Caribbean countries. The primary demand-side factors contributing to this access gap are level of education, presence of children in the household, employment, and socioeconomic conditions. Meanwhile, the main supply-side factor is the affordability of telecommunications services and devices.

The study also indicates that women have less training on digital technologies and are less confident in their digital technology skills, which leads them to use these technologies less.

The study also warns that the gender gap in digital jobs is progressively widening, especially due to high levels of informal employment in the region, which, in turn, has been exacerbated by the COVID-19 pandemic. Women make up 32% of employees in the information and communications sectors in Latin America and the Caribbean.

Finally, the study concludes that women’s limited participation in digital transformation is also tied to behavioral biases among women themselves and in the digital sector, which is dominated by men. It can also be linked to the scarcity of women in decision-making positions within companies.

Public policy recommendations

The study recommends various public policy measures to boost female participation in the digital sphere. In general, the recommendations highlight the need to change the culture through awareness campaigns and equitable early education in science, technology, engineering and mathematics (STEM), as well as to foster a culture of self-empowerment and ongoing training in digital technologies.

For the public sector, the study suggests accelerating digital infrastructure projects and reducing gender gap in digital skills, especially in rural areas. It also recommends activity attracting more women to digital professions and raising awareness in the private sector about how much value it loses by not including female talent in processes for digitally transforming businesses.

The study recommends legal reforms to distribute family responsibilities more evenly among the capable adults in a household. When financing entrepreneurship projects through tendering processes, governments should strive to consider an equal number of proposals from men and women.

For the private sector, the publication recommends companies develop gender equality policies and use data analytics to design them. In terms of recruitment, companies should ensure that application processes for certain positions in the organization are fair and use blind resumes, without referencing the gender of applicants.

To increase career opportunities for women, companies should consider implementing flexible or hybrid work mechanisms, creating mentoring programs to encourage more women to develop their digital skills, and adopting upskilling and reskilling measures for women in digital fields.

Finally, the study recommends creating funds or programs specifically to help female entrepreneurs obtain financing. These programs should be designed to mitigate a possible undesired effect of excluding these women from normal financing circuits.

About the IDB

The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.

About IDB Invest

IDB Invest is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social, and environmental development in the region. With a portfolio of $14.8 billion in asset management and 376 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.

About IDB Lab

IDB Lab is the innovation laboratory of the IDB Group, the main source of financing and knowledge for development, focused on improving lives in Latin America and the Caribbean (LAC). The purpose of IDB Lab is to drive innovation for inclusion in the region, mobilizing financing, knowledge, and connections to co-create solutions capable of transforming the lives of vulnerable populations due to economic, social, or environmental conditions. Since 1993, IDB Lab has approved more than $2 billion in projects developed in 26 LAC countries, including investments in more than 90 venture capital funds.