As political leaders around the world continue to struggle with economic headwinds, many of them are neglecting one of their most significant opportunities: raising the status of women, especially those in emerging economies. Nearly 1 billion women could enter the global economy in the next decade, moving into roles as employees, executives, and entrepreneurs. So far, many of these individuals have been economically stunted, underleveraged, or held back, to the point where they are invisible to the global economy. By standing in the way of women, countries are letting a valuable resource sit idle.
The Third Billion: Empowering Women, Powering the Global Economy
What will be the impact of nearly 1 billion women entering the global labor force by 2020? Watch this video to understand how global, social, and economic growth will rise with the arrival of the Third Billion.
Who are these women, and why is their status so important? According to data from the International Labour Organization, a United Nations agency that tracks global workforce statistics, roughly 865 million women will be of working age (between the ages of 20 and 65) by 2020, yet will still lack the fundamental prerequisites to contribute to their national economy. Either they don’t have the necessary education and training to work, or—more frequently—they simply can’t work, owing to legal, familial, logistical, and financial constraints. Of these 865 million women, 812 million live in emerging and developing nations.
We call this group the Third Billion, because its economic impact will be just as significant as that of the billion-plus populations of China or India (see “The Third Billion,” by DeAnne Aguirre and Karim Sabbagh, s+b, Summer 2010).
This is a far more complex problem than fostering economic growth in a single country, because women are scattered around the globe and they face a range of obstacles. In both developed and developing economies, women have lower rates of labor-force participation and receive lower pay than men for the same work. The economic gains among this group have often come despite strong societal forces opposing them. Indeed, the factors that keep women out of national economies are so widespread and interconnected that governments and companies seeking to help the Third Billion have hardly known where to start.
Now, however, a new body of quantitative evidence shows, country by country, how best to empower women and leverage this valuable asset. A clear set of policies has emerged that will put more women into the workforce and foster more women-owned businesses, leading to stronger and healthier societies and more competitive national economies.
Policies That Empower
These guidelines were a result of the Third Billion Index, an in-depth research project conducted to assess the performance of more than 100 countries in economically empowering women. To reach these conclusions, our team of Booz & Company researchers started with economic data from the World Economic Forum and the Economist Intelligence Unit, both of which study the workforce gender gap and women’s economic issues.
Each organization publishes a gender parity index that is fairly broad. Between them, they cover all aspects of women’s well-being—including access to healthcare, legal rights, and political participation. However, we excluded those issues from our analysis, in order to focus specifically on the world of work. In doing so, we did not wish to downplay these issues; instead, our goal was to isolate the factors that directly correlate to economic empowerment for women, akin to controlling for certain variables in a laboratory experiment.
Our model looked at the performance of countries based on three specific groups of “inputs,” or policies put in place to bolster women’s economic power. These were equal education opportunities for girls; access-to-work laws; and entrepreneurial support (such as credit, training, and other forms of assistance).