With a slowdown in China and flatlining in Europe, the world economy is facing some uncertainty. The search is on for new sources of growth – in developed and developing economies. There is one resource that is both universal and under-utilised: women.
The gender gap is such that in India, women account for just 17% of GDP according to new research by the McKinsey Global Institute. In the Middle East and North Africa, the figure is 18%. By doing better on gender equality, world GDP could be 11% higher in 2025 than would be expected from business as usual, McKinsey finds.
Although under-represented in the workforce, with a global labour force participation rate of 47% compared to 72% for men, women are very much over-represented in some areas, as companies with supply chains in developing economies will be aware.
Supply chain challenges
About 90% of Cambodian textile workers are women, for example. And women are crucial workers in many agricultural and commodity supply chains – frequently with poor conditions and very low levels of pay.
The McKinsey paper highlights India as a country where equality for women is low in both society in general and the workplace, and where a “lack of skills” combined with “cultural norms” constrains the opportunities for women.
Even in parts of the world that are already more equal, the gains from doing better could be significant. In western Europe and the United States, women currently account for about 40% of GDP, but even in those economies the GDP boost by 2025 could be 9% and 11% respectively, according to the McKinsey research.
These matters have long been discussed at the highest political levels. The United Nations post-2015 Sustainable Development Goals include a specific set of gender equality objectives. These are the “most critical” of the SDGs, according to Phumzile Mlambo-Ngcuka, UN under-secretary-general, because without gender fairness “we will not be able to achieve the world we hoped for”.
The G20 is also getting in on the act. In early September, a G20 Women-20 (W20) “engagement group”
was formed. Its objective will be to boost by 100 million the number of women participating in the global economy.
The W20, which consists of prominent women from academia and business, will propose policies, promote access to finance for women entrepreneurs and look at targets – such as objectives for the number of women on company boards, or targets to reduce the number of jobs without social security.
The W20 seems to have identified some of the right issues. A key one is a focus not so much on the elimination of workplace discrimination, important though that remains, but rather enabling women to move up the skills and entrepreneurial ladder.
In this connection, the W20 priorities include increasing female ownership of businesses, facilitating women's access to finance to start new ventures and boosting women's positions in business networks.
For corporations, there is much to do in these areas. They can put their own houses in order with gender equality at management level. They can also introduce policies and practices that will, for example, treat women-owned suppliers – including, crucially, in developing economies – fairly. In fact, there is a UN Global Compact and UN Women initiative
By ensuring equality not just on the factory floor, and at suppliers across the globe, but also in business creation and entrepreneurship, companies will do much to help women – and to contribute to the broader cause of reviving world growth.