By Ambassador Melanne Verveer
Originally appeared in the Huffington Post.
Women’s economic participation is a game-changer with the potential to transform entire economies and societies. The recently released World Economic Forum Gender Gap Report shows that while progress has been made in closing the gender gap, there is still much work to be done. In 2006, 56 percent of the economic participation gender gap had been closed, and that number is now 60 percent. It is critical that we focus our efforts on closing the divide in women’s participation in the formal economy in order to grow economies, create jobs and enhance inclusive prosperity for all.
As Secretary of State, Hillary Rodham Clinton put women’s economic participation on the foreign policy agenda. Recently, at Georgetown University, she reiterated why: “If we pay extra attention to getting women into the formal economy, it will be good for everybody…We have to unlock the potential of every person, and grow the economies of every nation. It’s the only way we’re going to be able to grow together.” As Secretary Clinton mentioned, if we were to close the gender gap on women’s economic participation, global GDP would grow by over 12 percent.
Some countries are tackling these issues head on. Japan’s Prime Minister Shinzo Abe has made women’s economic participation, or womenomics, an integral part of his economic stimulus agenda. With an aging workforce and a low birth rate, Japan’s labor force can no longer support the size of the country’s economy, which has been stagnant for years. By closing the gender gap, Japan could boost its GDP by almost 13 percent. Prime Minister Abe has been working to reform the tax code, improve access to childcare and eldercare, reform immigration laws, and increase female participation in government in order to improve women’s economic participation. Abe sees women’s economic participation as critical to Japan’s revitalization and long-term growth.
This issue, however, is not just the responsibility of governments. The private sector plays a crucial role in catalyzing change, and corporations have the opportunity to be on the cutting edge. Access to finance, access to technology, sourcing from women-owned businesses, and changes to corporate culture all have the potential to increase women’s participation and transform business as we know it. It has been demonstrated that diversity and inclusion are not only the right things for businesses to do, they also make the most business sense. Companies that are more diverse financially outperform their less diverse counterparts by about 18 percent. It has also been shown that companies with more women on their boards of directors experience higher financial performance.
Accessing capital is a worldwide problem that female entrepreneurs face when trying to start or grow their small businesses. Women have a much more difficult time securing loans than men. This is as true for the CEO of a tech startup in the U.S. as for the seamstress in India who runs her own shop. Globally, women entrepreneurs, who earn billions in income each year, are a largely untapped market for financial institutions. By removing barriers and helping women secure loans, not only do women-owned businesses grow, but financial institutions can increase their profits as well.
Access to technology is also becoming increasingly essential for women’s economic participation. For example, a simple cell phone can revolutionize the way women do business. For a rural woman farmer trying to sell produce in Kenya, it can mean finding out where the closest market is on a given day. Cellular phones can also help women manage their finances and protect their savings. Mobile banking can enable the majority of the world’s poor who are unbanked to access financial services for the first time. Likewise, mobile education applications provide training on important skills and resources to which women may not otherwise have access, such as financial literacy, management and leadership strategies, and networks of supporters and peers.
Many companies have started to source their products from women-owned businesses, and women often prefer to buy products from other women. Adding more women to the supply chain is an essential step large corporations can take to to leverage the power of the female economy.
Corporate culture can greatly women’s participation in the workforce. For example, policies on parental leave, telecommuting, and flexible work hours influence women’s ability to enter and remain in the workplace. Mentorship and sponsorship programs, elevating women into senior management positions, and adding women to corporate boards also further women’s ability to succeed and make a greater contribution to the economy and society.
This is an evidence-based case built on a growing body of research and data. Women are game-changers in the economic sphere; their full economic participation drives prosperity for all. Data and analysis have shown that women’s economic participation is good for families, communities, societies, and countries, and it is good for business too. We can and must capitalize on the power of women’s economic participation to transform the lives of individuals, businesses, and the entire global economy.
You can find Secretary Clinton’s full remarks from the launch of the International Council on Women’s Business Leadership at Georgetown University here.