- New figures indicate the pivotal role that women in the work force can play in spurring economic growth
- UK already “on the path to success”, reaping the benefits of investing in the right foundations
- UK ranked 13th in the Index with women’s gross impact on GDP standing at 8% • MENA is the standout region with tremendous potential for growth
If female employment rates were to match male rates in the UAE, the country’s GDP could see a boost of 12 percent; in Egypt, it would grow by 34 percent. These figures indicate the pivotal role that women in the work force can play in spurring economic growth. Yet – despite amounting to almost one billion worldwide and rivaling the populations of India and China – this fast-growing group of people has not received sufficient attention from key decision-makers in many countries. In light of this, management consulting firm Booz & Company have created the Third Billion Index – a ranking of 128 countries based on how effectively leaders are empowering women as economic agents. The Index is a composite of established data, compiled by the World Economic Forum and the Economist Intelligence Unit, on women’s economic and social status. It aims to isolate factors that facilitate women’s access into the larger economy as well as determine how additional advancements and further integration can be achieved. These factors include women’s level of preparation for joining the workforce, the country’s access-to-work policies and entrepreneurial support, as well as observable aspects of women’s contribution to the national economy such as inclusion in the workforce, the degree of advancement in the national economy and equal pay for equal work in practice.
The results of the index lead to several revelations about government practices and women’s economic progress. “There is a clear correlation between the front-end processes and policies regarding women’s economic opportunities – the inputs - and the actual success of women in their national economies – the outputs. We discovered this by clustering the 128 countries into five broad categories based on their index rankings,” explained Penney Frohling, Partner with Booz & Company.
The countries with a strong set of both inputs and outputs are labeled “on the path to success”; these are typically developed economies, including the UK. Moreover, the countries “taking the right steps” have implemented a slate of input policies and are just beginning to see their efforts pay off. They vary widely in other political and social dimensions and include Malaysia, Tunisia, and Venezuela. On the other hand, a small number of states, comprising China and Cambodia, are “forging their own path”; they are seeing modest output results, but have not yet established a strong foundation of inputs.
The next group of countries, classified as “average,” consists of those that have taken slow steps to improve inputs to women’s economic progress. Nations such as Columbia, Serbia and Thailand belong to that realm. Lastly, there are nations that have not yet approached the problem at all; those are said to be “at the starting gate” and include most of the Arab states in the Index, as well as Indonesia, Laos, and Nigeria. This category accounts for the largest number of the 128 countries, suggesting an immense economic opportunity in many parts of the world.
The Effect on “Outcomes”
Perhaps the most significant finding from the Third Billion Index is the impact of “inputs” and “outputs” on “outcomes” – the latter of which refers to broader indications of well-being, including per capita GDP, literacy rates, access to education, and infant mortality.
“The data also shows a very strong correlation between index scores and beneficial outcomes. This relationship indicates that positive steps intended to economically empower women not only contribute to the immediate goals of mobilising the female workforce, but also lead to broader gains for all citizens,” said Ms. Frohling.
In truth, all countries have unique requirements and must combine specific input policies to create a solution that can best address women’s needs. However, Booz & Company’s research has also found several common challenges that women face – regardless of their country’s stage of economic development or its performance in empowering women.
To date, many women have lacked the fundamental requirements needed to contribute to their national economies. They either haven't had the necessary education and training to work, or - more frequently - they simply couldn't, because of legal, familial, logistical, or financial issues.
Enabling Women for the Future
In all areas of women’s economic empowerment, there is therefore a need for detailed, updated, and gender-disaggregated data – so interested parties can better understand the issues that women face and more effectively frame solutions. This includes data on access to capital, property rights, and small and medium-sized enterprise (SME) ownership. Addressing these matters will require a set of solutions tailored to individual countries, with cooperation from various entities. Yet the universality of these challenges certainly shows that solutions in one part of the world will likely apply elsewhere as well, and that best practices will transcend borders.
Click here to download the PDF full report by Booz & Company.