On International Women’s Day, Jamie Holtum, strategy director at FutureBrand London, shows how female empowerment drives economic growth.
Japanese women are some of the most well educated in the world, but culturally ingrained ideas of gender mean that almost 70% of women drop out of the workforce after having their first child.
When looking at the global economic drivers of growth, the empowerment of women is one of the largest, and yet still the most untapped. A global view of the issue makes powerful reading: on average, 46% of women aged 16–65 are not working at all (source: World Bank). That’s about 23% of the world’s population. This is despite the fact that there is a direct link between empowering women at work and significant economic growth. And it’s fascinating to see how this plays out around the world.
During the 1990s, Rwanda’s controversial leader Paul Kagame transformed the nation from a struggling agricultural economy torn apart by genocide and civil war into an advanced knowledge-based economy. This was primarily achieved through governmental and legal reforms, giving women better access to work. Women-owned farms increased 20% and 30% of parliamentary seats had to be reserved for women. As a result of these policies, Rwanda’s GDP grew 8% each year between 2001 and 2008 (source: HuffPost), while poverty decreased substantially. Today, the country boasts a higher percentage of women leaders in both the public and private sectors than both the UK and the US.
In Rwanda, women-owned farms have increased 20%, while 30% of parliamentary seats had to be reserved for women. As a result of these policies its GDP grew 8% each year between 2001 and 2008.
In China, where 55% of technology start-ups are founded by women – higher than any other country (source: China State Council). Their economic contributions are universally credited as a key driver of the country’s powerful economic growth. And in Indonesia, where cultural tensions around working women have traditionally prevailed, the government’s promotion of a women-friendly work culture has helped to increase its GDP by more than 5.1% in the fourth quarter of 2018 (source: Trading Economics). Women are particularly championed in Indonesia’s technological industry, with female coders are now afforded celebrity-like status. And, as in Rwanda, Indonesian law now states that at least 30% of a political party’s candidates must be women.
In stark contrast, nations where religious and cultural barriers still prevent women from working are seeing their economies suffer. In Saudi Arabia, for example, annual GDP fell to a record low of –2.3% in the first quarter of 2017, while Pakistan is seeking its thirteenth loan from the International Monetary Fund in more than three decades (source: Bloomberg).
Even developed nations like Japan are suffering from the economic consequences of failing to adequately empower their female population. Japanese women are some of the most well-educated in the world, but culturally ingrained ideas of gender mean that almost 70% of Japanese women drop out of the workforce after having their first child, versus 25% in the UK and 30% in the USA. Further, only 11% of Japanese executive-level managers are women. Unsurprisingly, there is clear economic stagnation in Japan; its GDP shrank at an annualised rate of 2.5% in the last quarter of 2018, yet recent estimates indicate that economic gender parity could benefit the country to the sum of an additional £420bn ($550bn, €489bn).
In the UK, there are still too many boardroom tables with little or no women present. In the FTSE 350, only 23% of board roles are held by women and the country ranks a lowly 41st worldwide for its percentage of women managers. There are not enough UK start-ups founded by women – and not because they are lacking in ideas – and there are not enough women in governmental positions. The opportunities for improvement are even bigger in the US, particularly in Silicon Valley and in Washington where the recent surge of women to Congress is certainly a welcome development, but one that must not just be symbolic.
If there was another resource that was so powerful and so readily available, the government and big business would plough money into finding solutions to unlock its potential. But the empowerment of women is so imbued with emotion and cultural tradition that we’re not being smart enough to see the opportunity present itself to us in broad daylight. We need to look at the facts and from there make the right changes.