Why Empowering Women Makes Economic Sense
Nicola Wattson 24 March, 2017 at 05:03
Women account for half of the world’s working age population, but only 55% actually participate in paid labour, in stark contrast to 80% of men. However, 75% of unpaid work is done by women, and they are paid less for the same work, only now earning what men did a decade ago! The global economy suffers as a direct result.
A McKinsey Global Institute report estimated that women generate only 37% of global GDP. However, if their unpaid work were to be counted, they would be contributing a further 13% or $10 trillion! They further estimated that if women were to work to the same extent as men, then between $12 trillion (best in region scenario) and $28 trillion (full potential scenario) could be added to global GDP by 2025. The full potential impact is about the equivalent size of the combined US and Chinese economies.
Both developed and developing countries and regions have a significant incremental GDP opportunity from closing the gender gap once and for all.
Recent research by the IMF supports this view and demonstrates the significant macroeconomic gains to be had from increasing women’s participation in the work force.
– If Latin American countries raised their female workforce participation (54%) to the average of the Nordic countries (61%), their GDP per capita could be up to 10% higher.
– If Canada, which has one of the highest female workforce participation rates in the world, closed its current gap of 7 percentage points between women and men with degrees then it would see a rise of 4.5% in GDP.
– Japan’s growth rate is steadily falling (0.5% est. in 2017) with the aging of its population, and it is growing older faster than anywhere else in the world! If Japan raised its female workforce participation levels to those of Northern Europe it could boost GDP growth by up to 0.4%.
– If one more woman is added to senior management or the corporate board, whilst keeping the size of the board unchanged, then an 8-13 basis points higher return on assets is realised.
– This last point is further supported by the Peterson Institute for International Economics who found that having at least 30% of women in leadership positions added 6% to a business’ net profit margin.
Getting women into the workforce is a critical issue in enabling economies to grow. For developing economies the reasons are obvious, and for many developed countries it will be the only way forward in light of aging populations and the consequent shrinking of the workforce. Women are the solution. Investing in them makes sound financial sense as well as morally!
But, it’s not just gender inequality at work that’s the issue; gender inequality in society is still prevalent in most countries. A World Bank study of 173 countries found some form of legal discrimination against women in 155 of them, ranging from a lack of property rights, to needing a man’s permission to obtain ID, to having at least one law that impedes women’s economic opportunities.
McKinsey found through their analysis that an increase in gender equality in society is clearly linked with an increase in gender equality in work. Brands have the power to influence society’s attitudes for the better, to raise awareness and to change mind sets. These seven examples are all great examples of brands that have chosen to empower women and girls in inspiring ways.
1) P&G – #WeSeeEqual:
P&G have launched a corporate campaign promoting a gender equal world that is “free from gender bias and with equal representation and an equal voice for women and men”. The ad features men and women of all ages in situations that challenge gender stereotypes.
2) Sport England – This Girl Can: Phenomenal Women
Sport England has released their latest ad in the highly successful ‘This Girl Can’ campaign that seeks to increase the proportion of women participating in sport. The 2015 campaign encouraged a remarkable 2.8 million women to get more active. The ad features ‘real’ women and girls taking part in various sporting activities whilst the poet Maya Angelou recites her iconic poem ‘Phenomenal Woman’.
- UBS – A women’s perspective: Life’s Questions