The COVID-19 crisis and digital transformation: what impacts on gender equality?

The COVID-19 crisis and digital transformation: what impacts on gender equality?

The COVID-19 crisis has accelerated digital transformation, unearthing new challenges for the achievement of gender equality in labour markets.

08 Nov 2021

By Alina Sorgner, John Cabot University (Rome), Institute for Labor Economics (IZA, Bonn), Institute for the World Economy (IfW, Kiel).

- This opinion piece is part of a series of articles commissioned by UNIDO's Department of Policy Research and Statistics. The views expressed in this article are those of the author based on her experience and on prior research and do not necessarily reflect the views of UNIDO (read more).

Digital technologies are widely perceived as a promising means to promote gender equality in education, the labour market, access to financing and healthcare, among others. The COVID-19 crisis has accelerated digitalization processes in both services and manufacturing in most countries, albeit at varying speeds, triggered by the requirements for social distancing and other COVID-19-related regulations imposed by governments around the world, and by changing consumer demand throughout the pandemic. The COVID-19 pandemic has adversely affected women by exposing them to higher health risks and higher risk of becoming unemployed in addition to the burden of household and caregiving responsibilities during the lockdown. We explore some of the lessons learned about the impacts of the pandemic on gender equality and, more generally, in how far digital transformation can potentially benefit women.

The COVID-19 crisis has accelerated digitalization, but has had adverse impacts on women

The COVID-19 crisis has accelerated the digital transformation trends around the globe, as evidenced in the development and expansion of digital infrastructure; the shift to digital delivery of services by firms and within organizations, for instance, in education, healthcare and retail; and increased implementation of digital technologies in manufacturing. Although the pandemic has had a negative impact on many businesses, it has also uncovered new opportunities for entrepreneurship. It has boosted digital entrepreneurship, for instance, reflecting changing consumer behaviour during and in the aftermath of the pandemic.

The recession associated with the COVID-19 pandemic is often referred to as a “shecession”, as it has taken a disproportionate toll on women in most countries. Although the pandemic has affected women around the world differently, it has exposed previously overlooked gender biases, such as the gender-racial-gap. Looking at health risk, for instance, we find that Black women in the United States are more vulnerable and at higher risk of dying from COVID-19 than Black men or White women (Bertocchi and Dimico, 2021). The authors attribute this to higher exposure of Black women to the risk of contagion in low-wage jobs in essential services, such as the healthcare, transportation and warehousing sectors, where they are overrepresented and which preclude remote working. Historically, Black women have been engaged in precarious work. Moreover, mothers suffered significantly more job losses than fathers and women without children (Alon et al., 2021). The working hours of self-employed women—and consequently their income—decreased to a greater extent than self-employed men’s. That is, self-employed women lost working hours and income at a higher rate in addition to fulfilling family obligations, including home schooling, facing industrial gender segregation, and being more inclined to run non-employing businesses and to working part time (Reuschke et al., 2021).

What is of particular concern is that gendered attitudes seem to have changed during the pandemic, certainly not in favour of women. For instance, West German fathers’ egalitarian attitudes towards maternal employment had been steadily increasing in the pre-pandemic period but dropped considerably during the pandemic. This development is troubling, as it suggests that the COVID-19 crisis has not only influenced the short-term allocation of household chores, it has also reversed the positive trend towards more egalitarian gender roles. The reversal of this trend could leave women with less time to engage in productive remunerated work and inhibit female empowerment in the post-pandemic period (Danzer et al., 2021).  

Adoption of Industry 4.0 technologies will likely accelerate in the post-pandemic era, potentially putting women at risk of losing their jobs

A trend that was already evident before the outbreak of the pandemic and which is expected to intensify in the post-pandemic period is the adoption of Industry 4.0 technologies. These technologies can broadly be classified into four types: 1) connectivity, data and computational power; 2) analytics and intelligence; 3) human-machine interface; and 4) advanced engineering. According to a recent McKinsey study (Agrawal et al., 2020), the role of Industry 4.0 technologies for achieving resilience has become even more critical in the aftermath of the pandemic, with 90 per cent of surveyed manufacturing and supply chain professionals reporting that they plan to invest in talent for digitization. Adoption of certain Industry 4.0 technologies, for instance, the use of industrial Internet of Things or operator assistance through augmented reality in digital performance management, can be realized without massive technology investments, irrespective of a firm’s existing technology infrastructure.

The accelerated adoption of Industry 4.0 technologies will likely affect workers who perform tasks that can be replaced or modified by using these technologies. Some Industry 4.0 technologies will have labour-displacing effects, while others will enhance workers’ productivity or improve occupational safety. Major gender gaps are evident in terms of the effects of digital technologies on workers’ jobs. Women in developing and transition economies are considerably less likely than men to possess the necessary skills that can safeguard them from the detrimental effects of digitalization, namely analytical, non-routine manual, interpersonal, advanced ICT and socio-emotional skills (Sorgner, 2019, 2021). This observation is robust across sectors, but gender differences are more pronounced in the manufacturing sector than in services, a sector that is witnessing defeminization trends. At the same time, women are also less likely to benefit from the labour-reinstating effects of digital technologies.

Teleworking is less accessible to women and creates obstacles to their thriving

During the lockdown and with social distancing measures in place, teleworking was the only option for non-essential workers to continue working, demonstrated in the increased share of tasks performed remotely during the height of the pandemic. The ability to telework was a strong predictor of job loss during the pandemic. Teleworking opportunities vary greatly across occupations, industries and types of workers. A study conducted in the United States and in the United Kingdom found that the share of job-related tasks that can be carried out outside the workplace is industry-specific, ranging between around 18 per cent in “Accommodation and Food Service Activities” and 70 per cent in “Information and Communication”, whereas only about 45 per cent of tasks in “Manufacturing” can be performed remotely (Adams-Prassl et al., 2020). Teleworking is possible for approximately 20 per cent of manufacturing jobs in EU countries (Sostero et al., 2020). Workers’ ability to telework varies considerably within the manufacturing sector. For instance, workers in certain STEM occupations of the manufacturing sector, including “Computer and Mathematics”, “Architecture and Engineering” and “Life, Physical, and Social Science”, report that they can carry out either a “very high” or “well-balanced” amount of their tasks remotely, while teleworking is not an option for most workers in low-skill occupations of the manufacturing sector, such as “Construction and Extraction” or “Building and Grounds Cleaning and Maintenance”, which is characterized by a high prevalence of manual tasks (Adams-Prassl et al., 2020).

Even within different occupations and industries, women had less opportunity than men to work remotely, and a higher number of women also lost their job during the pandemic (Adams-Prassl et al., 2020). The ability to telework might partially explain the current gender gap in labour force participation rates. A study involving EU countries shows that the potential for women to perform their jobs remotely is actually relatively high, and that a large share of their jobs can be organized in a way that allows for more flexibility (Sostero et al., 2020). Despite the high potential for jobs commonly occupied by women to be carried out remotely, this is not always possible due to the workers’ and firms’ low digital capabilities as well as firms’ organizational culture which might not be particularly supportive of personal autonomy. Given the growing trend to perform work remotely, the obstacles to the realization of teleworking must be removed to prevent the widening of the gender gap.

While teleworking has the potential of increasing women’s participation in the labour market, it remains to be seen whether it will open up opportunities for women to thrive in the digital work environment. The following two considerations appear particularly relevant in this regard.

First, the rise of the gig economy is a cause of concern, as digital labour platforms, which allow firms to outsource certain tasks to a pool of workers (“crowdsourcing platforms”), might create less favourable working conditions compared to more traditional forms of employment, for instance, by encouraging informal work and weakening social security protection. The number of gig workers in manufacturing is currently quite low, with only about 9 per cent of all such workers in the United States engaged in the manufacturing sector before the outbreak of the pandemic (Statista, 2018). It is expected that this figure will grow in the future due to, among others, the difficulty of finding skilled workers to fill full-time manufacturing jobs. Consequently, manufacturing firms might increasingly hire gig workers on a project-by-project basis. Furthermore, current trends in Industry 4.0, such as cloud manufacturing, might lead to higher demand for IT and cybersecurity experts who can be recruited via digital labour platforms. A study on platform workers in Ukraine, the country with the largest platform workforce in Europe, finds that gig workers tend to be young and have a high level of formal education. The most common tasks performed by platform workers are work related to texts and IT (web programming and management); around 25 per cent state that the platform economy provides their primary income. Male platform workers in Ukraine earn more than twice as much as women, a gap that is considerably higher than in Ukraine’s offline economy, and which can largely be explained by occupational segregation and differences in workers’ choices to serve local vs. international markets (Aleksynska et al., 2019).

The gender wage gap also exists in non-remote jobs in the “gig economy”. A study of Uber drivers in the United States, for example, identifies a 7 per cent gender wage gap amongst the drivers. This gap may be attributable to experience with digital platform work and certain preferences, for instance, preference to only provide services in safer neighbourhoods and to drive at lower speeds (Cook et al., 2018). Non-remote gig economy workers on a project-by-project basis might become a new trend in manufacturing if the problem of the skilled trades gap continues in the future.

Secondly, employment flexibility is often considered to benefit working women, the assumption being that women can thereby better combine work and childcare responsibilities, improving their work-family balance. In fact, the pandemic has revealed that gender gaps in the labour market were relatively low among teleworkers compared to workers who could not work remotely. At the same time, female teleworkers also spent more hours performing childcare duties during working time and experienced higher reductions in productivity than male teleworkers (Alon et al., 2021). There is an additional risk that teleworking could lead to a rearrangement of job tasks, i.e. that female teleworkers might be assigned or may prefer to perform less “valuable” work, which could further widen the gender wage gap. Finally, teleworking might adversely affect women’s mental health, weaken their social ties with peers and diminish promotion opportunities.

In short, the digital workplace trend is likely to continue in the post-pandemic ‘new normal’ and will open up more opportunities for flexible employment. The trend will likely also include manufacturing industries that have thus far been reluctant to recruit gig workers or to provide opportunities for teleworking. Yet teleworking is here to stay, and the biggest concerns include the ability of individual workers to perform work remotely; the impact of teleworking and digital platforms on the quality of work and on workers’ well-being; and the social and gender inequalities this trend might intensify.

Digital gender divides are particularly large in developing countries, creating obstacles to the digital transformation of manufacturing

The pandemic has emphasized the importance of digital inclusion for economic resilience during crises, since many educational and work-related activities could only be performed remotely. In 2019, shortly before the outbreak of the pandemic, 58 per cent of EU population possessed at least basic digital skills (European Commission, 2020). The situation in less developed countries is complicated, however, by the lack of access to digital devices, often due to high acquisition costs, and poor digital infrastructure (Sorgner et al., 2017). Women around the world are less likely than men to use the internet, a gap that is much larger in least developed countries (LDCs) due to cultural, financial and skills-related barriers (Mariscal et al., 2019). In developing countries, where mobile technology represents the main internet access point, there is a pronounced gender gap of around 15 per cent, on average, in terms of both mobile phone ownership and mobile internet use (GSMA, 2021). These gaps are even larger in South Asia, sub-Saharan Africa, the Middle East and North Africa.

The situation is even more dire with regard to advanced digital skills. A study of the LinkedIn platform concludes that there are twice as many men as women employed in IT industries in the Americas, Europe, Asia and Oceania, while only very few women in Africa work in IT (ITU, 2020). There are a few exceptions, however; for instance, in Myanmar and Latvia, more women than men work in IT industries. Within the IT industry as a whole, a higher share of women works in the “Internet and Telecommunications” subsector, while they are less likely to work in “Computer Hardware” and “Computer Networking.” This digital gender divide could become a critical bottleneck to achieving greater gender equality in manufacturing, particularly in developing countries, and it might further exacerbate the skilled trades gap that manufacturing firms are already facing, which could potentially slow down the digital transformation of the manufacturing sector.

Implications of the COVID-19 crisis and accelerated digital transformation for the empowerment of women

Paying more attention to gender biases within certain population groups. While the recession caused by the COVID-19 pandemic is referred to as a “shecession” because it has indisputably affected women more severely than men, the pandemic has also revealed that some groups of women are more vulnerable than others. Particular attention must therefore be paid to measures directed at eliminating gender-racial gaps, gender biases within minority groups, and gender biases in families with children, among others. This calls for access to disaggregated data that allow for an analysis of more narrowly defined gender gaps.

Industry 4.0 is accelerating, but so is defeminization in the manufacturing sector. Women are more likely to be adversely affected by Industry 4.0 technologies designed to replace workers. Women are underrepresented in human-machine interface jobs, which are in high demand and offer opportunities for growth. With Industry 4.0 jobs becoming safer and more attractive for women, they need to acquire the necessary skills to benefit from Industry 4.0 advances. Failure to do so could exacerbate the skilled trades gap the manufacturing sector is already facing.

Realizing the potential for women to perform their jobs remotely. Teleworking seems to have a positive impact on women’s access to the labour market, and allowed many women and men to continue working during the lockdown. While existing technologies enable a large share of women to work remotely, opportunities for teleworking in manufacturing are relatively limited. In addition, firms’ organizational culture as well as firms’ and workers’ low digital capabilities continue to represent an obstacle to the full realization of engaging in teleworking.  

Being mindful of gender gaps in the gig economy. Recruiting gig workers on a project-by-project basis could become a new trend in manufacturing. Persistent gender inequality in the offline economy is reflected in the gig economy as well, where certain gender gaps, for instance, wage gaps, might intensify. While some of these gaps can be explained by women’s personal preferences or choices, others are clearly driven by the lack of experience with digital platforms and can be resolved with appropriate training programmes.

Digital work offers flexibility, but often also increases women’s burden. Flexible work arrangements are important for improving the inclusion of women in the labour market. At the same time, the burden of women teleworkers rose during the COVID-19 pandemic, as household chores and childcare duties were not equally distributed within the family. Thus, promoting flexible work arrangements, such as teleworking, is certainly important, but it by no means suffices to actually empower women.

Addressing the digital gender divide. Digitally excluded people were affected far more severely by the COVID-19 crisis than others. While the road to achieving the digital inclusion of the entire population is still long—even in the most developed countries—the digital gender gaps in LDCs are especially large. Women in these countries must gain equal access to the internet, digital technologies must become more affordable, and gender equality in at least basic digital skills must be achieved.

Monitoring reversed trends in egalitarian gendered attitudes. The COVID-19 crisis has revealed how fragile the positive achievements are that have been made in recent decades in terms of promoting more egalitarian attitudes towards gender-specific roles. The reversed trend in egalitarian gendered attitudes must be closely monitored to prevent a manifestation in increased gender inequality in economic outcomes.   

- Note: It is now abundantly clear that the COVID-19 pandemic has had an impact on nearly all aspects of our lives and has caused us to rethink “business as usual”. As we adapt to the "new normal", appropriately channeled opportunities can help us improve the way we do business and the way we live. The United Nations Industrial Development Organization is preparing its latest flagship report, the Industrial Development Report 2022, which will provide a comprehensive assessment of the pandemic’s impact on global manufacturing and the prospects for the future of industrialization in a post-pandemic world. Scheduled to be launched on 1 December 2021, the report will make a key contribution to countries' national and international strategies for an inclusive, sustainable and resilient industrial recovery to build back better from the COVID-19 pandemic.

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