Bridging the digital divide for women-led small businesses: Gaps and opportunities in Ecuador
Digitalization has become a critical component for the growth and sustainability of small businesses worldwide. However, the path to effectively leveraging digital tools is often riddled with challenges, particularly for women-led micro- and small businesses. Limited access to technology, insufficient digital skills, and financial constraints make it difficult for these businesses to thrive in an increasingly digital economy.
Recognizing the relevance of these challenges to the Ecuadorian context, Mastercard Strive partnered with IMPAQTO to launch VIQTORIA. VIQTORIA focuses on the connection between startups and women-led micro- and small businesses across Ecuador. It fosters the development and implementation of digitalization projects that promote the growth and financial sustainability of these small businesses across a variety of sectors. This is achieved through a twin-track initiative that 1) incubates MSEs to digitalize and innovate their own business models, and 2) supports startups to adapt existing products and services or roll out new ones that meet MSE needs and boost their competitiveness.
To inform the design and implementation of VIQTORIA, IMPAQTO commissioned a comprehensive study that surveyed 238 women-led small businesses across Ecuador, including alumni from previous IMPAQTO programs and an additional sample of women entrepreneurs. The study provides vital insights into the current state of digital adoption, key barriers and needs, and opportunities for more effective digital support, and helped to shape the approach for program delivery.
The current state of women-led digitalization in Ecuador
The study found that, while many women-led small businesses in Ecuador have access to the internet, their use of digital tools remains basic. Social media platforms (such as Facebook and Instagram), messaging apps like WhatsApp, and e-invoicing systems are the most commonly used tools. These are primarily employed for marketing, communication, and simple business operations, suggesting a need for broader digital integration.
A significant finding was the difference in digital adoption between alumni who had participated in IMPAQTO’s programs and those who had not. Alumni businesses demonstrated a higher level of digital engagement, incorporating a wider range of tools into their operations. This difference indicated that tailored training and mentorship — central to VIQTORIA’s approach — can effectively support digital transformation.
Despite these advances, there remains a significant gap in understanding what digitalization entails. The study found that many business owners, particularly those in non-alumni businesses, are unfamiliar with more advanced digital tools. Even though 82% of businesses acknowledged that internet use has increased productivity, many struggle to integrate tools like data analytics and customer relationship management (CRM) systems into their operations due to factors that span from lack of staff training to cost constraints.
Key barriers to digital adoption
The study identified several critical barriers preventing broader digital adoption among women-led small businesses in Ecuador:
- Lack of knowledge and information: A majority (70%) of respondents pointed to a limited understanding of digital tools as a major obstacle. This gap was more pronounced among non-alumni businesses, reflecting the need for more accessible digital literacy programs.
- Cost constraints: Financial limitations are another major challenge for digital adoption. While there is a general willingness to invest in digital tools, only 45% of businesses in Ecuador’s largest city, Guayaquil, expressed a definite intent to do so, compared to 74% in Quito.
- Technical challenges: Many business owners reported difficulties adapting to new digital solutions. Without adequate technical support, integrating these tools can be daunting, leading to inconsistent or limited use. For instance, only 37% of respondents had previously used the services of digital finance and accounting solution providers, a key entry point for digitalizing operations, suggesting a gap in knowledge and access to reliable digital partners.
Motivations for digitalization
Despite these barriers, the study found strong motivations among women-led businesses to adopt digital tools. Key drivers included:
- Improved productivity and efficiency: As mentioned earlier, a significant 82% of respondents noted that digital tools have increased productivity by streamlining operations and reducing costs.
- Enhanced competitiveness: Businesses see digitalization as essential to staying competitive, with 45% emphasizing the importance of digital tools for adapting to market trends and maintaining a competitive edge.
- Business growth: Many respondents recognized the potential for digital tools to expand their customer base and grow their market presence. Nearly 45% highlighted marketing and customer engagement as key motivators for digital adoption.
VIQTORIA’s role in addressing these challenges
The findings from this study have been crucial in the design of the VIQTORIA program. As reflected in the study, developing accessible, hands-on training programs is crucial. Training should focus on enhancing digital literacy across both basic and advanced tools to ensure businesses can maximize their potential. VIQTORIA leads in this area by offering workshops and mentoring that cater to the unique needs of small businesses. Another key recommendation found in the study, and embedded in VIQTORIA’s design, is access to affordable digital tools, facilitated by the parallel work with local startups that can provide such tools. By creating a supportive ecosystem, the program enables women-led small businesses to overcome economic and technical barriers, building confidence and competence in using digital tools. Moreover, continuous support is essential to help businesses navigate digital challenges. Through access to experts and resources, VIQTORIA assists businesses in overcoming technical obstacles, allowing smoother integration of digital tools into everyday operations.
Addressing economic barriers is key, according to the study, particularly to facilitate access to digital tools. Implementing financial support programs, such as subsidies or low-interest loans for digital investments, could encourage more businesses to embrace such tools. In line with this recommendation, a key strength of VIQTORIA is its twin-track approach. It incubates small businesses, helping them innovate and digitalize their business models while also supporting startups in adapting or developing digital solutions that meet the specific needs of these enterprises.
With clear regional differences in digital readiness, as identified by the study, tailored programs can address specific local challenges. Increasing outreach and support in locations like Guayaquil, where familiarity with digital tools is lower, can help foster a more balanced digital transformation across Ecuador. This holistic strategy fosters a dynamic environment where learning and growth are driven by practical, hands-on experiences.
The road ahead: Connecting promising startups and small businesses
VIQTORIA fosters digital transformation by equipping women-led small businesses with essential tools, skills, and networks, while also stimulating the startup ecosystem in Ecuador to develop scalable digital solutions. Its dual-track approach enhances the capabilities of enterprises and drives innovation across sectors, fostering the local ecosystem and digital economy.
The program’s success is rooted in data-backed interventions that promote collaboration between startups and small businesses. Participant startups refine their products through hands-on programs like design sprints, leading to increased competitiveness and stronger local business networks. As VIQTORIA grows, it plans to deepen this ecosystem by encouraging more startups to create solutions for real-world challenges, extending its impact across Ecuador and — hopefully — the wider Andean region.
