8 - Women and digitisation: Promises and challenges of internet use in the Indonesian labour market

Summary

The rapid pace of digitisation has important implications not only for economic growth, but also for the labour market. Digitisation has the potential to radically transform the labour market by creating new job opportunities, improving access to job searches, changing the future of work, and making the labour market more innovative and inclusive for marginalised groups of workers. However, in the context of developing countries such as Indonesia, several barriers to harnessing the full potential of digital technology exist. Unequal access to information and communication technology infrastructure, poor digital literacy and skills, and social norms that prevent the whole population from participating equally in the digital economy may cause a winner-takes-all phenomenon that could lead to further widening of existing inequalities.

The potential effects of the internet on the labour market are multidimensional. Previous research indicates that high-skilled workers are more prone to experiencing the favourable impact of the internet on the labour market (Akerman et al. 2015; Yang et al. 2023). Meanwhile, negative employment effects for low-skilled workers are also likely as the internet replaces the performance of routine tasks through automation. Specifically for women, internet and digital technologies can offer solutions to workrelated problems such as time constraints from the burdens of child care and other domestic responsibilities (ADB 2014). In patriarchal societies where job segregation is strengthened by cultural stereotypes and educational paths, digitisation might hold a promise to eliminate some gender disparities in the labour market. Evidence indicates that internet availability benefits highly educated and skilled women by providing work flexibility, improving job searches and enabling home-based businesses (Dettling 2016; Masroor et al. 2020; Viollaz and Winkler 2021).

Widespread use of internet and digital technologies might affect lower-educated and unskilled women in the labour market in offsetting directions: obviously it creates new job opportunities, but some jobs will become obsolete since tasks originally conducted by humans face varying degrees of automation risk. Chang and Huynh (2016) estimate around 56% of employment in Indonesia is at high risk of automation in the next couple of decades, a figure that is higher than that of neighbouring countries such as the Philippines (49%) and Thailand (44%). Two sectors with the highest risk of automation are accommodation and food services, and trade (ibid.). These are also the sectors where female workers dominate employment.