How Digital Transformation Shapes Male and Female Entrepreneurial Potential Differently

The study finds that digitalization boosts entrepreneurial opportunities for both women and men, but often widens gender gaps in economies where men already dominate. It concludes that technology alone cannot close disparities without policies addressing structural and cultural barriers.

The Asian Development Bank, together with the University of Pécs and Imperial College London, has released a working paper exploring how digital transformation is reshaping entrepreneurial potential for women and men across 78 economies. Drawing on the newly developed Female Entrepreneurship Index (FEI) and Male Entrepreneurship Index (MEI), the study assesses whether technology acts as an equalizer or an amplifier of gender disparities. The results are revealing: digitalization improves entrepreneurial opportunities for both genders, but its impact varies depending on the entrepreneurial balance of each society. In contexts where men already dominate the field, digitalization widens the gap in their favor. Where women lead, the spread of digital tools does not significantly shift the balance. This finding highlights how technology interacts with preexisting inequalities, reflecting not just opportunities but also entrenched divides.

Empowerment and Its Limits

The paper situates its analysis within a broader body of research that presents digitalization as both liberating and limiting for women. On the empowering side, studies from Ghana, Iran, and Latin America show that women use digital platforms to overcome cultural restrictions, expand networks, and gain visibility in international markets. In countries with rigid gender norms, such as Saudi Arabia, online tools allow women to run businesses, achieve financial independence, and challenge stereotypes. In tourism sectors across Latin America, women report that digital technologies help them reduce reliance on intermediaries, broaden customer bases, and increase independence. Yet cyberfeminist critiques point to a darker side: offline inequalities often spill over into online spaces. Women’s access to ICT training, financing, and networks remains limited, and cultural expectations burden them with a “digital double shift” of combining entrepreneurship with domestic responsibilities. Even in digital finance and crowdfunding, masculine-coded identities often attract more trust, showing that the supposed neutrality of digital platforms frequently reproduces old biases.

Measuring Gendered Impacts

To move beyond anecdotes, the authors adopt a rigorous econometric approach. The FEI and MEI serve as dependent variables, while digital readiness is measured by the Network Readiness Index, with controls for GDP per capita, competition (firm density), women’s political empowerment, and sex ratios at birth. The results reveal that digitalization is a strong and positive driver for both male and female entrepreneurship, but with key differences. For women, competition plays a more decisive role. In markets with higher firm density, digital tools become vital for finding opportunities, building networks, and carving out niches. For men, competition fades into the background once digitalization is considered, suggesting they are less constrained by structural barriers to begin with. GDP per capita and digital access remain crucial for both, while political empowerment, a proxy for gender equality, produces a surprising effect: it benefits male entrepreneurship more than female. The study suggests that more politically equal societies tend to be institutionally stronger, and this general stability disproportionately benefits men, who are already better positioned to exploit opportunities.

Widening Gaps in Male-Dominated Economies

A central question of the research is whether digitalization narrows or widens gender gaps in entrepreneurship. By directly comparing FEI and MEI, the authors find that in economies where men already dominate, digitalization increases the MEI-FEI gap. Structural break tests confirm that in 48 such economies, digitalization amplifies existing disparities. By contrast, in 30 economies where women are more entrepreneurial, digitalization has no significant effect on the balance. In short, technology amplifies prevailing conditions rather than transforming them. These results challenge the common narrative that simply giving women access to digital tools will reduce inequality. Instead, the study underscores that the benefits of digitalization flow along established institutional and social channels, often reinforcing men’s advantages in capital, networks, and high-tech sectors.

Policy Beyond Wires and Screens

The policy implications are clear: digitalization alone will not close gender gaps. While it enhances entrepreneurship broadly, its benefits are not distributed evenly. Women continue to face structural barriers, from a lack of digital literacy and training to cultural norms that discourage technological or entrepreneurial ambition. Without targeted support, digitalization risks entrenching inequalities. The paper argues that governments and development institutions must design policies that go beyond expanding infrastructure. This includes closing digital literacy gaps through targeted training for women, building inclusive networks that ensure equal access to finance and mentorship, and addressing systemic gender inequalities in politics and economics. Creating competitive ecosystems where women can thrive is particularly important, as competition appears to stimulate female entrepreneurial potential more than male. The study concludes that technology is not neutral; it acts as both a catalyst and a mirror. It catalyzes entrepreneurship by lowering barriers and enabling innovation, but it also mirrors the inequalities of offline life. For women, digitalization offers opportunity, but whether it translates into empowerment depends less on the technology itself and more on the institutional and cultural context in which they operate.