This year, the new G20 agenda featured simply ‘women’ as a vector and driver for overall economic growth. This means that official data is finally confirming what the Western world has already been noticing and experiencing for decades now: women are good for business. According to reports by the Organization for Economic Cooperation and Development (OECD), the workforce participation of women (and thus, their economic contribution) still remains below their potential. In OECD countries (most of the so-called ‘developed world’), full convergence of men and women’s work participation may be achieved in the next 15 years, which could mean that 12% more business women could be expected to join the economy in this time frame. This creates a huge potential for growth in the economy if the skills and qualifications of these women will be used wisely.
In spite of the closing gap between men and women’s educational levels, in the last two decades the workforce participation of business professional women has flat-lined nonetheless, failing to deliver the increase we all expected. This means that the problem with the current economic make-up wasn’t just that women lacked the skills to participate in it (since that was solved via education), but also the fact that they weren’t supported to reach their full potential in medium and upper management positions. This lack of support and opportunities is one of the most destructive trends the economy is currently suffering from, not just for the personal trajectories of these women workers, but also for the overall chances for growth of the entire economic system.
But all that is about to change: according to a report produced by collecting data from major institutions like the World Bank, the OECD, the IMF and so on, called ‘the WG3 effect’, the world is realizing that including more women in the workforce is one of the strongest growth factors we can benefit from. This is due to the enormous potential already existing in this emergent layer of professional women, already skilled to participate (thanks to the closing educational gap), but which are still partially kept back by the obtrusive policies regulating the traditional work fields. With a little support for women who are qualified to reach their full potential in management level positions, the report predicts that such business women will then become one of the most important GGGs (Global Growth Generators).
What Can Be Done to Increase the Participation of Business Women in the Economy?
While all the reports which converged into the main paper cited here are indeed helpful, there is still far more research to be done in order to have a clear picture on the role of gender in macroeconomics. The gender variable has been included in studies far too little, and most causal relations often cited by traditional literature are in fact only correlation mistaken for causation, and which needs to be researched further.
This is one of the reasons for which this most recent study is such a welcome breakthrough: for the first time, enough data from multiple sources is gathered into one big analysis which clearly shows the immense potential of women as key factors for global economy growth. The next decade will be crucial for the world’s economy, and its growth will directly depend on how well we manage to integrate professional women workers in the workforce. This means that making qualified women feel welcome in all business structures is crucial, as well as giving them enough opportunities of advancement, so that they feel motivated to give the job their best, instead of feeling stuck in dead-end positions which are traditionally deemed more appropriate for their gender. The new mantra of the economic global system should be this: ‘diversity is profitable’. At least as far as gender is concerned, the new OECD report proves it over and over.
In short, this is what could be done to ensure a greater female labor force participation, and thus plant the seeds to local and global economic growth:
- Better policies: In most OECD countries, the report shows that the participation of women in the labor market is directly hindered by bad policies, starting from gender discrimination id childhood education and up to limits on physical movement;
- Better support: The other major factor limiting the participation of business professional women on the market is actually comprised of several outcomes of the bad policies mentioned above, according to the report; such outcomes can include lower female presence in top jobs, a bigger wage gap, poorer education achievement for females and so on.
The first thing you can do, as a company, is to make sure your middle and upper management levels are open to business women joining their ranks. Being perceived as diverse and open to all will also act as a super motivational booster to all current employees, and attract further talent with true potential of turning things around for the better. Furthermore, you can take a hint from the Peterson Institute for International Economics, which claims that paid paternity leave can be a key factor in the development of better skilled women workers and the support they need to reach their full potential.