Why do only some women entrepreneurs turn digital access into economic growth?
Studies show providing digital inclusion is half the story; more important is creating spaces for entrepreneurs to build and develop social capital and the capacity to take advantage of the access.
Women entrepreneurs need more than just digital skills. They also need strong networks to help their businesses grow. Image: Canva
Picture a home baker in Indonesia.
She starts by selling her cakes through a neighbourhood savings group. Word spreads. She opens a WhatsApp channel that eventually draws hundreds of regular customers. She joins an online small and medium enterprise (SME) community, which connects her directly to a local distributor.
What drives the growth of her business?
It is not just her product or her digital literacy. It is her network.
This story is becoming more common across Indonesia, where 64.5 per cent of micro, small and medium enterprises (MSMEs) are owned by women, according to the country's national statistics agency (BPS, 2024).
Yet this trend remains far from universal.
The question that policymakers should be asking is not just how to get more women online, but why some women entrepreneurs are able to convert digital access into real economic growth, while others cannot?
The answer, increasingly backed by research, points to social capital: the networks, trust, and mutual norms that help people identify opportunities, share resources, and build businesses together (Beninger et al, 2016; Hammad and Naggar, 2023; Littlewood and Khan, 2018; Putera et al, 2023).
What the data shows
In Indonesia, 44 per cent of MSMEs operate in the food and beverage sector (BPS, 2024). Digital technology adoption is rising, with MSMEs among the primary drivers of this trend.
The digital transformation of Indonesia's MSME sector is a genuine policy achievement. National development plans (RPJMN 2025-2029) have rightly prioritised digital inclusion as a tool for economic growth and gender equity. Adoption rates are rising. More businesses are coming online.
Having said that, adoption alone does not guarantee growth.
Scholars in entrepreneurship theory have noted that what separates entrepreneurs who seize opportunities from those who do not, is not just access. It is the capacity to act on that access, and social capital is a critical part of that capacity.
Why do networks and trust matter for entrepreneurs
Digital platforms have changed how social capital can be built.
Instagram, TikTok, WhatsApp, and marketplaces such as Tokopedia and Shopee are no longer just sales channels.
They have become social infrastructure, allowing entrepreneurs to reach beyond their immediate communities and build the kinds of bridging connections that were previously accessible only to those with existing advantages.
Yet, the evidence also shows that simply having access to these platforms is not enough.
Building meaningful networks requires skills, confidence, time, and trust; all of which are resources that many women entrepreneurs, particularly those managing both household and business responsibilities, do not have in abundance.
Research from multiple contexts shows that women-led ventures benefit from social capital not just as a business tool, but as a direct driver of entrepreneurial confidence and decision-making (Jaim, 2020; Shahzad et al, 2025; Stoker, 2025).
Networks provide information about market trends, peer learning, emotional encouragement, and access to finance, all of which are particularly constrained for women in many communities.
What governments must do differently
The evidence points clearly toward what a more comprehensive approach should look like. Governments need to treat social capital not as an incidental byproduct of SME programmes, but as one of the core intended outcomes.
This is something to be designed for, invested in, and measured.
In West Java Province, Indonesia, there is a flagship programme called UMKM Naik Kelas (SME Upgrading) run by the provincial Department of Cooperatives and SMEs since 2019.
Based on the Programme Report in 2025, the scheme has reached 3,443 MSME participants across all 27 regencies and cities in West Java, which is supported by 150 field facilitators and 27 regional coordinators. Its activities covered business profiling, financial literacy, digital marketing, public speaking, export readiness, and business matchmaking.
The foundational work for human capital, including connectivity, digital literacy, licensing and marketplace access, has been, or is being done.
Building durability into networks
The next challenge is relational: ensuring that the networks women build through digital platforms translate into durable, collaborative economic relationships.
If there is a community or networking gathering among MSMEs, that activity should not remain periodic.
Instead, it should become a core routine that is just as important as any other human capital development program.
Women-led SMEs in Indonesia disproportionately face barriers rooted in social norms, limited mobility, and restricted access to the informal business networks that male entrepreneurs more readily navigate (Setyaningrum, 2023; Tambunan, 2019).
A programme that builds skills but not networks leave these structural barriers largely intact.
Governments need to institutionalise community-building mechanisms by supporting structured entrepreneur networks, alumni communities, and continuous peer-learning platforms, both offline and online.
Therefore, strengthening human capital through training, mentoring, and digital capacity-building initiatives is crucial. Nevertheless, SME development policies should also place greater emphasis on fostering social capital as a foundation for long-term sustainability.
Strong social capital enables trust, collaboration, knowledge exchange, and mutual support among entrepreneurs, ensuring that the benefits of human capital investments extend beyond the duration of formal programs and contribute to more resilient and sustainable SME growth.
------------------------------------------------------------------------------------------------
The author is a lecturer at Indonesian public university, Universitas Padjadjaran. She was previously the Head of Implementation and Tribe Lead of Citizen Engagement and Services at Jabar Digital Service, a GovTech delivery unit under the West Java Provincial Office of Communication and Informatics.
