Defining Women-Owned Business In Indonesia

Transcription

1. Millennium Challenge Account-Indonesia Reducing Poverty through Economic Growth Gender equality remains a critical issue in Indonesia . In many areas of development, women in particular still face challenges and experience various forms of gender based discriminations. In business and economy, women’s participation and contribution remain unexplored and disregarded. Women’s roles and contribution continue to be seen as proxy to those of men due to the strong patriarchal culture that assigned women’s primary roles merely as housewife and homemaker. Accordingly, efforts need to be focused on eliminating gender-based discriminations through various interventions including documenting women’s participation and contribution in the economy and business as well as creating programs and policies that would support women in starting and expanding their businesses. Women’s Participation in Economy, Business and Entrepreneurship Data shows that women’s participation in the national economy has been increasing over the years. Indonesian women’s labor force participation rate in 2013 was 50.26%; a steady increase from 32.43% and 38.79% in the previous decades of 1980 and 1990 respectively. This figure cannot be taken lightly as it demonstrates that slightly more than half of women’s population age 15 year old and above in Indonesia were economically active. According to the National Labor Force Survey in 2013 compiled by the Statistics Indonesia (BPS), women made up 40.44 and 46.06 percent of the total number of workers in the industrial and service sector respectively. In the trading sector, women even topped men with 50.84 percent of participation. In business and entrepreneurship, over one third of self-employed people age 15 years old and above as per May 2014 were women. In micro and small industry, men’s participation of the total number of entrepreneurs was 58.56% and women’s was 41.44%. When broken down by age cohorts, the highest number of entrepreneurs was reported to fall within the range of 25-44 years old with women making up 47.37 percent of the total figure. In the course of 2009-2010, the World Bank estimated that 42.8 percent of firms in Indonesia had female participation in their ownership and 31.2 percent had female top managers. Another data released by the International Finance Corporation (IFC) in 2011, revealed that one third of formal Small and Medium Enterprises (SMEs) in Indonesia are, in fact, owned by women with an estimated of 8% annual growth. Challenges Remain: Lack of Recognition and Gender-Based Discrimination However the continually growing trend of women participating in the labor market and business is not without its challenges. Women have not been receiving equal recognition for their roles and contribution in the economy and business. Although in the past years, women’s labor force participation rate has continued to grow, the number is still far below those of men which accounted for 83.37% in 2013. The International Labor Organization (ILO) argued that women’s low participation in the labor market compared to men is mainly due to the strict gender norms and values imposed on women to become housewives and homemaker. POLICY BRIEF Introduction POLICY BRIEF Defining Women-Owned Business In Indonesia 1
2. POLICY BRIEF The gender stereotyping that places women ’s primary duty and responsibility at home to take care of the family, has created an assumption in the society that women are not capable of working professionally. This further led to a more serious issue of discrimination in pay and wages. Women generally receive less than men with approximately 22.26% gap in between. With every pay of the same type of work and qualification that men are entitled to in the non-agricultural sector, women only receive 77.74 percent of the amount. According to the BPS, of the total number of unpaid family workers in 2013, women made up the large portion of it with 73.04%. 2 In business and entrepreneurship, family responsibility has caused a phenomenon of double burden for women entrepreneurs that limit women’s access and opportunity to be professional business persons and to expand their business to a larger scale. This was in fact among the key findings of the current study conducted by the MCA–Indonesia on the development of formal definition of womenowned business. Double burden along with the patriarchal culture that highly values men’s dominance had significant effect on women by creating a feeling of inferiority and lack of confidence among them. In many cases, women themselves believed that the business that they were running was merely a hobby, additional income for the family or a temporary side-job that need not be taken seriously. Even if they would like to expand their business to a larger level, these women felt that it was difficult to do due to their husbands’ and families’ lack of support. This was believed to further lead to women’s preference in doing small and low-risk businesses and the tendency for women to do business in groups to avoid bearing the possible loss alone. Moreover, it is often mentioned that women dominate informal businesses which are mostly home-based, micro and small in nature. However in reality, currently there is no national data in Indonesia that comprehensively documents the exact number of women-owned businesses or enterprises at different size and sector including the characteristics and challenges they face. Consequently, women’s roles and position in business and entrepreneurship remains an uncharted area that requires further investigation. Gap in Availability of Data on Women-owned Businesses and Enterprises Data is vital in assessing the nature and magnitude of a problem and accordingly, determining the most suitable interventions. The sexdisaggregated data collected so far suggested that women are, in fact, showing greater interest in taking more active roles in economy and business. The national data however focused mostly on the individuals in the form of labor force participation rate and the number of men and women entrepreneurs in micro and small industry with less emphasis given on the number and dynamics in the businesses or enterprises run especially by women. Moreover, there is no clear concept of business ownership to begin with that can be used as reference in collecting relevant data and statistics. Lack of data and documentation of women’s participation and contribution in business and entrepreneurship may serve as one of the root causes of the society’s lack of recognition of women’s roles and contribution. Accordingly, currently it is difficult, if not impossible, to know the exact number of businesses and enterprises owned by women at various business scale and sector, and the different characteristics and dynamics that these businesses might experience. The data and information is concurrently important in providing a clearer picture on what kind of businesses that women do and the specific challenges each might be facing, which in turn would serve as a useful insight in determining the existing gaps and accordingly formulating policies and programs to help women start and develop their businesses. A complete set of data will garner a better understanding on women’s participation and contribution in business and entrepreneurship which eventually will promote recognition of women’s roles in the economy. Any relevant effort to fill the gap in data availability will improve the establishment of a gender-sensitive national database on business and economy that can be further used by all key stakeholders in formulating relevant policies and programs. The effort is in line with Indonesia’s commitment to promote gender equality and women’s economic empowerment as prescribed in: • The National Medium-Term Development Planning 2015-2019 which highlights the improvement of women’s quality of life and roles in various development sectors through improvement in women’s contribution to the economy from non-agricultural sector and the availability of data and analysis of gender gap and gender-responsive policies in the area of industry, trade and SMEs. • The Strategic Plan of the Ministry of Women’s Empowerment and Child Protection 20152019 which emphasizes the increased implementation of gender mainstreaming and women’s empowerment strategies in various fields of development; one of which signified by an increased number of gender-responsive policies that support women’s empowerment and understanding of public and business
3. • The Minister of Women’s Empowerment and Child Protection Regulation No.6/2009 on the Establishment of National Data on Gender and Children and No. 5/2014 on the Guidelines for the Implementation of Gender-based and Children’s Data System. • The Memorandum of Understanding (MOU) between the Ministry of Women’s Empowerment and Child Protection and BPS in 2010 and 2015 that calls for a strengthened cooperation between the government agencies on the provision of data and information on gender and children. Study on the development of Formal Definition of Women-Owned Business in Indonesia Recognizing the priority of the government of Indonesia to establish an improved methodology for gender-responsive data collection in business and economy, in the past year the MCA-Indonesia has been conducting a study to develop a definition to refine the conceptualization of women’s business ownership that in turn would contribute to availability of valid and reliable data. The study’s main objective was to develop an agreed definition of a women-owned business that is strategic, inclusive and relevant to the situation and condition of women’s businesses in Indonesia. Both government and non-government which consist of key government officials at central and provincial level from eight Provinces in Indonesia as well as representatives of NGOs, centers for women’s studies, universities, research centers, business associations and women entrepreneurs were involved in the study mainly in an attempt to provide the most suitable conceptualization of women-owned business that does not only answers to the current needs of women entrepreneurs but also corresponds to the national development policy directions. Formal Definition of Women-Owned Business Data Collection Affirmative Policies and Programs Researches and Studies Figure 1. Proposed Utilization of Formal Definition of WomenOwned Business As outlined above, the definition is expected to serve as basis for the government and other relevant stakeholders in collecting data to document businesses owned by women, which in turn will improve the collection of sexdisaggregated data in business and economy in Indonesia. The data will be an important ground for government and non-government to establish policies and programs that benefit women-owned businesses as a way to address the challenges faced by women entrepreneurs and women-owned businesses. In affirmative programs that are specifically designed to provide technical and financial assistance for women-owned businesses, the definition can also be useful in identifying which businesses are eligible to receive funding or other type of support either from the government or other potential donors. Researchers and academicians can also make use of the definition as reference in their researches and studies aiming at developing women-owned businesses and entrepreneurship. Proposed Definition of Women-Owned Business Based on the findings of the study, a womenowned business is described as follows: “A business in which a woman or a group of women hold(s) majority share of important roles and position1 in (1) capital/input ownership, (2) business management, (3) human resources/ workers, and/or (4) control.” The definition outlines a formal concept of business ownership that is currently unavailable in Indonesia. Four major aspects of capital/input ownership, business management, workers and control/decision making are regarded as the main criteria for an individual to own a business. To obtain a clearer picture of the aspects of the definition, the study also proposed the following operational definitions: NO ASPECTS OPERATIONAL DEFINITION 1 Capital/input ownership Ownership of any kind of resources that is essential to the establishment and development of a business which may include funding, people, raw materials, technology, energy, information, strategy, design, and networking. 2 Business management Being actively involved in the day-to-day management of a business. 3 Human resources/workers A person or persons who work(s) temporarily or permanently for another person or institution/office/ company and gain(s) some money/cash or goods as wage/salary. 4 Control (decision making) Exercising the power to make policy decisions concerning a business; a person or persons who lead(s) the running of business and hold(s) highest decision making in the business (e.g., CEO, president, executive director, etc.). Table 1. Operational Definitions of Four Key Aspects of Women-Owned Business Definition 1 Important roles and position refer the roles and functions that strongly influence the running of the business. POLICY BRIEF on gender equality, as well as an improved sex-disaggregated data to be used as basis in formulating, monitoring and evaluating development policies and programs. 3
4. Recommendation After developing a set of definition , the next required plan of action is nonetheless, to use it. As mentioned above, the definition is a means to achieve a more structured and improved methodology of data collection as well as identification of women-owned businesses in related programs and policies. Although the definition can be widely used either by the government and non-government, an emphasis is given on selected ministries to enhance the formalization and adoption of the definition. The following are some of the recommended use of the definition: • As the main architect behind the national development planning, it is recommended that Bappenas provides its support for the wide use and integration of the definition of women-owned business into relevant data collection and programs established either by the government and non-government in Indonesia. POLICY BRIEF • As part of its proposed function to improve data collection on women’s participation and contribution in business and entrepreneurship, the newly developed definition of women-owned business can be integrated into the methodology of data collection conducted by BPS, especially the 2016 Economic Census to collect data on economic activities in Indonesia including the number and characteristics of business activities at various types and sector, Profile of Micro and Small Industry, National Labor Force Survey and other relevant surveys. The data collected can be used, among others, as an important basis for financial institutions such as Bank Indonesia, Financial Service Authority, commercial banks and cooperatives to improve access of womenowned businesses to financial services. 4 • Taken into account that the Ministry of Women’s Empowerment and Child Protection’s current effort to promote the development of home-based industries that are reportedly dominated by women, the definition can be used by the Ministry in refining the data collection of home-based businesses owned by women and in selecting beneficiaries of affirmative programs tailored for women-owned businesses. The definition may also be used by the Ministry for other relevant data collection initiatives and programs. • Other Ministries and government agencies including the Ministry of Industry, Ministry of Cooperatives and SMEs, Ministry of Manpower, the National Public Procurement Agency (LKPP) and their respective agencies at sub-national level are also encouraged to make use of the definition in their relevant data collection efforts or programs as part of their commitment to improve businesses that are owned and initiated by women. • The definition is also applicable to be used as reference in affirmative programs and relevant studies on women and business initiated by the NGOs, think tanks/research institutes, centers for women’s studies, universities as well as business associations. References Badan Pusat Statistik. (2014). Survei Angkatan Kerja Nasional 2014 Triwulan 1. Jakarta: Badan Pusat Statistik. International Finance Corporation (IFC). (2011). Strengthening access to finance by womenowned enterprises in developing countries. Washington, DC: IFC. International Labour Organization. (2015). Tren tenaga kerja dan sosial di Indonesia 2014-2015. Jakarta: ILO. Rahayu, A.W. (2015, January 29). Perempuan dan belenggu peran kultural. Jurnal Perempuan. Retrieved from http://www.jurnalperempuan. org/ Supriyanto, S. (2014). Perempuan dan laki-laki di Indonesia 2014. Jakarta: Badan Pusat Statistik. World Bank. (2009). Enterprise surveys: what businesses experience. Retrieved from http://www.enterprisesurveys.org/data/ exploreeconomies/2009/indonesia#gender Millennium Challenge Account-Indonesia Reducing Poverty through Economic Growth MR21 Building, 11th Floor. Jl. Menteng Raya No. 21, Jakarta 10340 Tel. +6221 39831971 | Fax: +6221 39831970