Why Funding Young Women’s Digital Literacy is Key to Economic Resilience
By Patty Alleman, UNICEF, and Lily Han, CFA, Volta Capital
Whatever the future of work brings, we know that it will require digital literacy to find and participate in the economic opportunities that arise. Digital literacy covers a wide range of competencies such as computer literacy, robotics, artificial intelligence (AI) application. In a recent poll by the World Economic Forum, 84% of employers plan to digitize more of their work processes following the COVID-19 pandemic and expand remote work opportunities for up to 44% of their workforce. As jobs are increasingly digitized, remote, and automated, digital skills have become an imperative on the pathways to employment- including and beyond the tech industry, and from the ground floor to the C-Suite.
However, every year, adolescent girls, and young women in low- and middle-income countries miss out on $15 billion of economic opportunities due to a gap in internet access and digital skills relative to their male peers. Despite the gains in STEM education in many developing countries, less than 5% of women in higher education choose ICT studies and so lack the advanced digital skills to participate in the digital economy. And less than 50% of women in developing countries have access to internet connectivity, due to unequal distribution of digital infrastructure across the globe.
Although the reasons why the gender gap in digital literacy skills vary, chief among them is limited infrastructure and services that intentionally reach adolescent girls and young women early, at an affordable price and tailored to their needs. In response, there are a growing number of models that provide digital skills development, match people to digital jobs, create digital infrastructure and tools, and serve as market enablers. Such models that specifically target girls/young women are proliferating; but there is an even bigger pool of those that are proven to work for a general population, and with some targeted incentives can explicitly work towards more equitable access. Access to capital is a challenge cited by many of these models to their ability to design with and for adolescent girls and young women and reach scalable impact; however, undoubtedly it is also a lack of understanding of the wealth of evidence that a one-size-fit-all model will have limited impact for all.
Rethinking investment in young women
Last year, our pathways to employment report, launched with GenderSmart and UNICEF, highlighted the need to rebuild the social infrastructure around adolescent girls and young women by recognising the wealth of actors and the value of connecting human capital as well as a re-shifting how we invest in the products and services that reach them. The persistent gender digital divide calls for the application of a gender lens to how we provide and use funding to close this gap. In some cases, models that could close the gender gap in digital literacy skills find themselves caught in a catch-22 where they are too social for commercial capital and too commercial for social capital. Meanwhile, there is a gap in the type of catalytic funding needed to incubate new ideas, connect to existing evidence bases, establish new learning, and enable the market for more investable solutions.
These types of funding gaps are exactly the kind of challenges that blended finance can be used to solve for. Specifically, three such blended finance solutions to fill these gaps are:
A digital literacy outcomes fund to aggregate existing sources of grant funding for highly impactful models with limited revenue-generating potential, while ensuring such funding is only spent on the models that can achieve the best outcomes/impact
A digital literacy incubator fund that supports innovation and experimentation on new intervention models, or with existing models to get them to better reach young women, offering start-up capital and SME financing, blended with technical assistance funds
A digital literacy partnerships investment fund for scaling investable businesses, using targeted financial incentive features to get existing businesses to target young women & digital literacy outcomes
A Call to Action
Our next step is to partner with interested funders in designing 1-2 of these mechanisms, with the goal to launch an actual investable mechanism by the end of this year. Of the three concepts, an outcomes fund seems to have the most market traction because a great deal of grant funding has already helped define what outcomes are needed, but now need models that take these learnings into scalable solutions that can attract a range of capital to realise such outcomes.
Moments of crisis are often catalysts of change. While the pandemic has uncovered multiple limitations to the way we organise our economies, it has only accelerated the impetus for a workforce that is responsive to everything from e-commerce to telemedicine, to big data and beyond. This presents the opportunity for funders across the spectrum of capital to partner in launching concrete blended finance mechanisms that will tangibly galvanise this market shift, while ensuring inclusivity for girls and young women in particular.