According to data from the UN’s International Labor Organization, which tracks global workforce statistics, about 865 million women will be of working age (20 to 65 years old) by 2020. However, they will not have the opportunity to join the global workforce for two main reasons: lack of education and proper training; and cultural, familial, and logistical constrains.
To better understand the economic effect of this phenomenon and how to improve the integration of women into the workforce, Booz & Company developed the “Third Billion Index.” They chose this name because they believe the economic impact of women’s incorporation into the workforce is equal in its importance to the economic impact of the growing population in India and China, also known as “The Third Billion.”
The index analyzes how the policies each country implements to empower women and offer them equal opportunity in the workforce correlates with better economic status for women. It also checks whether and how greater economic status for women translates to greater per-capita GDP, higher literacy rates, and lower infant mortality rates. Unsurprisingly, they found positive correlation between all three; women’s-empowerment policies support better economic status for women, which in turn means a better society and economy for everyone.
Booz & Company identify four main common challenges countries face on the path to gender equality in the workforce.
The Burden of Care: In both Western and Eastern societies, the burden of care for the children and the elderly of the family falls mainly on the women. Taking care of the family is culturally a woman’s task. Governments can change this by creating better care facilities for such populations or by promoting initiatives among private businesses designed to create a more equal distribution of the burden between men and women.
Lack of Credit: Women’s lending programs are usually limited to microcredit, which limits the options for women entrepreneurs starting their own business. Also, in some countries the conditions for getting a loan often unintentionally cause discrimination against women. In this case, governments should offer special tax breaks and other incentive in industries that are the most relevant to women in their country.
Insufficient Representation in Upper Management: Studies show that even in Western countries where women are more educated then men, the glass ceiling remains. Women still find it more difficult to get into senior positions. In this case governments and private companies should define quotas to promote gender equality in leadership positions.
Lack of Support for Entrepreneurs: The needs of women entrepreneurs differ from country to country. In Western societies women might need a more technologically oriented support system, while in developing countries they might need to learn basic business skills. Either way, governments should answer those needs by creating agencies aimed to offer SMB owners the knowledge and tools needed to strengthen their businesses.
As I mentioned earlier, by 2020 almost a billion women will be of working age but will not work. Whether they lack the skills or are traditionally destined to care for their family, these women will be denied of the opportunity to help the world economy grow. Cooperation between governments and businesses aimed to empowering women can significantly change this.