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 / Spring 2013 / Issue 70(originally published by Booz & Company)


How to Keep the Promise of the Third Billion

The precise blend of policy initiatives and private-sector efforts to economically empower women and prepare them to enter the workforce will vary according to local needs. In general, however, most countries will have to address a similar set of challenges.

The burden of care. In rich and poor countries, the responsibility for children, the sick, and the elderly falls almost exclusively on women. Women in the countries of the Organisation for Economic Co-operation and Development (OECD) spend about 2.4 hours more than men on unpaid work (including care work) each day. In less-developed countries, unpaid work also includes household chores that compensate for a lack of infrastructure, such as getting water and finding fuel. One study found that if care work were assigned a monetary value, it would constitute between 10 and 39 percent of GDP.

Many of these practices are grounded in deep cultural norms. In China, for example, eldercare is viewed as a woman’s tianzhi, or heavenly duty. As a result, some 95 percent of Chinese women have eldercare responsibilities, and 58 percent help support their parents financially. In Brazil, education policies add to the burden on women. The standard school day is just four hours in some regions of the country, requiring that women take care of children during the remainder of the day (and leading to lower education outcomes as well).

Governments can intervene to better care for these populations and free women to work if they choose. This intervention need not take the form of state-run facilities. Even policy shifts can spread the responsibility for care. For example, several years ago, Germany began offering a bonus of two months’ pay if fathers took paternity leave; the number of fathers exercising this option doubled in the first year. The private sector can take steps to address this issue as well, through more flexible work schedules and by offering on-site day-care facilities.

Lack of credit. Credit is another universal issue affecting women. Many women’s lending programs thus far have been limited to microcredit—systems based on small loans backed up by community activity. These are better than nothing, but their impact is often limited to small, informal businesses in the service sector, rather than startups in key sectors such as technology. In other cases, lending policies unfairly burden women. In China, for example, many lenders base loan decisions on collateral, rather than cash flow. This particularly affects Chinese women, who have far lower rates of property ownership than men in the country.

Clearly, governments cannot—and should not—simply force banks to lend to a specific business segment, including women-owned businesses. Those kinds of heavy-handed interventionist approaches have the potential to damage the credibility of recipients. Yet regulators can at least ensure that the playing field is level. A recent study in Italy found that women running small businesses were charged higher interest rates than men for overdraft privileges, even though the women had slightly better credit histories than the men. Moreover, for key industries that a country seeks to foster, such as technology, the government can create tax breaks and other incentives to direct capital to areas where it can do the most good.

Insufficient representation in upper management. The glass ceiling persists. Study after study shows that boards of directors and C-suite executives are still overwhelmingly male, even in countries where women now represent a higher percentage of college graduates than men and even more of the overall labor force in many countries. Thus, the European Commission is exploring the use of quotas to promote gender parity on boards. Some countries, including France, Iceland, Italy, Norway, Spain, and Sweden, have adopted such quotas voluntarily. Deutsche Telekom has promised that by 2015, 30 percent of its leadership positions will be held by women.

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