Women and Trade in the Digital Age

8 October 2019
ITC News

Speech delivered by ITC Executive Director Arancha González

APEC Women Ministerial, Santiago de Chili 1 October 2019

Good morning and thank you for inviting me to participate in this first event - an entire week - that the APEC is devoting to the economic empowerment of women. I would like to thank Chile for leading this initiative that puts the spotlight on a very important task that is pending not only in the APEC but also in the international community - namely equality between men and women in the economy.

I have just arrived in Santiago from Brussels, where yesterday I participated in a conference on women and trade, organised by the European Commissioner for Trade with the participation of Chilean Undersecretary for Foreign Affairs, Carolina Valdivia. At that event, we presented the results of a survey of more than 9000 companies in 12 EU countries which analysed the obstacles faced by European women entrepreneurs when trading outside the EU. Only 1 out of every 5 exporters in Europe is a women entrepreneur, a ratio that is even lower in Chile.

I flew to Brussels from New York, where the United Nations General Assembly opened last week. During the Assembly, we assessed the progress made towards achieving the Sustainable Development Goals, including Goal 5 on Equality between Men and Women, which also includes equality in the economy. This is a commitment we want to achieve by 2030, but at this rate it will take us 202 years!

If I am telling you all this, it is not to explain my travel schedule, but rather to illustrate how the economic empowerment of women is one of the major pending tasks in all our countries.

Next year marks the 25th anniversary of the Beijing Conference on Women. It was in Beijing where we clarified once and for all that women's rights were human rights and that human rights were also women's rights.

It was exactly 25 years ago, too, that the first recorded e-commerce transaction took place. A technology expert bought a CD by Sting from another technology expert - they were both men - and paid him with a Visa card using a secure payment code. That was in 1994, the year Chile joined the APEC.

Twenty-five years later, e-commerce is the fastest-growing form of international trade, accounting today for 15% of all merchandise trade. Online purchases grew by 12% in 2017, and more than half of the world's purchases of retail goods and services are made in the Asia-Pacific region. More and more women are participating in this market - twice as many as in analogue trade - but we have yet to close the gender digital gap.

Nowadays, women entrepreneurs are aware that 21st century trade is digital and that few companies can grow without using such tools as secure payment systems, efficient delivery methods and social networks. Technology is a source of competitiveness in today’s world.

When it comes to prospering in e-commerce, six elements are key: payment solutions, connectivity, trade logistics, laws, skills and financing. I will comment on each one of them briefly, before addressing the special place women have in the future of e-commerce.

During the quarter century that has elapsed since that first electronic transaction, Chile has taken various steps to become a regional economic frontrunner, and more recently to take the lead in e-commerce. Which brings me to the first key policy area: payment solutions.

Chile currently outperforms all other South American countries in payment solutions: the use of debit cards is twice the Latin American and Caribbean average, and 25 out of every hundred Chileans use a credit card regularly, compared to a regional average of 18.

For e-commerce to flourish, banking systems must promote secure electronic payments that replace more inefficient models such as cash on delivery, which still account for 65% of all digital transactions in APEC countries such as Indonesia.

The second area is connectivity: affordable and reliable information and communication technologies. The growth in Internet access is slowing down, especially in developing countries. Half the world is connected, but the other half, mainly in those countries, will not be connected in the near future unless we expedite public-private efforts. And this momentum is needed, because even among mobile device owners, women are, on average, 26% less likely to use mobile Internet than men.

The third area is trade logistics. Simplified customs procedures and access to distribution networks. This is where implementation of the recent World Trade Organisation Trade Facilitation Agreement would be of great use in reducing customs red tape and costs.

Area number four is consumer protection, data privacy and protection against cybercrime. An obsolete and opaque legal and regulatory environment that leaves people exposed and undermines their trust slows down the acceptance of e-commerce. Data privacy and protection against criminals must be a priority. The APEC e-Commerce Steering Group has demonstrated considerable sensitivity and leadership on these issues by exploring the interoperability between the EU General Data Protection Regulation and the APEC Cross-Border Privacy Rules System. This is good news for new Asia-Pacific companies that want to trade with Europe. This is also at the heart of the ongoing WTO negotiations to generate multilateral rules on e-commerce, including on data protection, in which APEC countries have a central role to play.

As for the fifth area, e-commerce can only be effective if entrepreneurs have adequate value-added connectivity capabilities. The questions are: Do you sell directly from your own website or do you go through an online marketplace? Who do you work with: Alipay or PayPal? Which is best for online marketing: Facebook, Instagram or something new? Can you trust cloud-based productivity tools? How do you manage the customs regulatory systems and shipment papers? E-commerce entrepreneurs need to know the answers to these questions and to whom they can address them.

Finally, we need to see funding and investment flowing into innovation, creativity and new start-ups. Innovative financing models resource are essential. In addition to the general difficulties that small and medium-sized enterprises encounter when it comes to accessing sources of finance, female entrepreneurs face specific challenges. Female entrepreneurs have 23% less access to capital funds, venture capital or other risk capital funds than their male counterparts, often due to a perception of risk that has little to do with the reality of their solvency.

We know that e-commerce is a powerful antidote to discrimination, which is often the result of unconscious biases found in analogue commerce. If I may, I would like to share with you the story of Lucrecia, one of the Guatemalan entrepreneurs in the home décor industry that the International Trade Centre has supported.

For Lucrecia, founder and President of Guatemalan company Casa Cotzal, e-commerce is one of the most efficient ways to gain customers. Before she had her own website, Lucrecia relied on trade shows to connect with buyers. Now she sells home décor items and fashion accessories online to retail customers in the United States through such platforms as Amazon, Handmade and eBay.

Lucrecia works with a large network of artisans, weavers, carpenters and glaziers, most of them women. And that is corroborated by a finding from the recent survey in the European Union: women exporters employ more women. This generates a virtuous circle in terms of wages, jobs, productivity and a greater contribution to the national economy.

E-commerce is also particularly relevant for women who run micro or small enterprises, as it offers them the flexibility to balance their business, their home and their family.

We know that most unpaid work is still done by women. Data from the International Labour Organisation reveals that in the Asia-Pacific region, for example, women perform four times more unpaid care work than men. How can female entrepreneurs devote as much time to the internationalisation of their businesses as male entrepreneurs if they are expected to do more than three times as much unpaid care work?

This is another form of structural discrimination that we must address. In the meantime, e-commerce allows female entrepreneurs to expand their international business. Studies carried out by the International Trade Centre show that the participation of female entrepreneurs in e-commerce is twice as high as in analogue commerce.

In those countries where women who pursue business activities encounter prohibitions or restrictions, access to e-commerce opens up new perspectives and allows them to internationalise their business from home, as we strive to put an end to these forms of discrimination.

But we also know that women run the risk of drowning in this sea of opportunities.

In addition to external barriers, other more personal barriers such as lack of self-confidence, lack of female role models in the sector, and technological fear or ignorance prevent women from taking advantage of e-commerce opportunities. This in itself reduces ambition.

It is a cause for concern that the lack of role models not only occurs in business but even before, in schools or universities where young women or girls are under-represented in the study of science, technology, engineering or mathematics.

The International Trade Centre has sought to respond to some of these shortcomings by launching "SheTrades", an initiative that seeks to connect three million women entrepreneurs to markets by 2021. This goes hand in hand with a working agenda that is based on six pillars of public-private action, which include areas such as more inclusive trade policies, access by female entrepreneurs to public procurement or to finance. A free online platform has been set up allowing women entrepreneurs to receive training and to build a network of contacts (www.shetrades.com); and, more recently, we have launched SheTradesInvest, an alliance with impact investment funds designed to facilitate the access of female entrepreneurs to credit and capital.

We have also expanded our private sector partnerships with companies such as UPS, to improve the access of female entrepreneurs to global markets; VISA, to facilitate the financial inclusion of female entrepreneurs; eBay, to help female entrepreneurs digitise their businesses; or, more recently, Mary Key to support female entrepreneurship.

The commitment of the International Trade Centre to Chile, APEC and the international community is to contribute to building stronger economies by investing in more inclusive trade. That is why, at the next Ministerial meeting of the World Trade Organisation in 2020, we will support taking a step toward in support of enhancing the participation of women in trade on the basis of the WTO Buenos Aires Declaration of 2017.

Thank you very much for your kind attention.