WOMEN: THE FASTEST-GROWING GLOBAL ECONOMY

A SNAPSHOT REPORT BY
NASEBA INSIGHTS FOR WIL ECONOMIC FORUM

[cp_modal display="inline" id="cp_id_eb3b8"][/cp_modal]

The more women in the workforce, the faster economies grow

Women’s participation in the world economy could add as much as US$28 trillion to annual global GDP[1]by 2025 with studies confirming the powerful multiplier effect of women’s empowerment on economic growth.

Companies committed to gender equality outperform their peers with a study of just under 22,000 global, publicly traded companies in 91 countries reporting that where women occupy at least 30% of leadership positions, this adds 6% to net profit margins.[2]

Women represent less than 5% of Standard & Poor’s 500, yet studies show that companies with female leaders tend to perform better financially. Businesses that increase leadership opportunities for women increase organisational effectiveness, and it is estimated that companies with three or more women in senior management functions score higher in all dimensions of organisational effectiveness.[3]

The wider impact on society and the global economy is the realisation of other sustainable, long term benefits, with societies where greater gender equality is in place offering better socio-economic opportunities for women and, most importantly, showing faster and more equitable growth in general. The positive ‘side effects’ include gains in poverty reduction, environmental sustainability, consumer choice, innovation and decision-making.[4]

GCC COMMITMENT

All six GCC countries are pursuing economic diversification visions and moving towards knowledge-based economies, with women’s economic empowerment a key commitment.

Currently female participation in the workforce ranges from 15% in Kuwait to 63% in the UAE.[5] The UAE and Saudi Arabia are among the GCC nations leading the drive to increase women’s participation in the workplace through their respective Vision 2021 and Vision 2030 strategies.

The Middle East and North Africa region closed more than 60% of its overall gender gap in 2017 (the global figure is at 68%).[6]A total of 11 countries in the region improved their overall score, with the UAE ranking higher than other nations and also set to show further improvement in 2018.

However, the ratio of women to men in senior positions in the region stands at an average of 9% compared to 35% in the Americas, 29% in Africa and 21% in Europe.

The UAE already ranks second in the Middle East for wage equality for similar work, according to Dubai Government data, and the newly launched Gender Balance Council has been mandated to enhance the public sector working environment by providing women with equal opportunities. The country aims to raise its ranking to one of the top 25 countries in the world for gender equality by 2021.

In Saudi Arabia, where major socioeconomic change is underway, the plan is to increase women’s participation in the workforce from 22% to 30% by 2030, while Bahrain puts female contribution to the economy as increasing at around 5% per annum, with a 2020 target of 45.6%. Kuwait has also committed US$4 million to the development of women’s skills and boosting economic participation.[7]

Saudi Arabia and the UAE are also key financial supporters of the Women Entrepreneurs Finance (WE-Fi) Initiative. Housed within the World Bank, it aims to support greater women’s workforce integration by supporting women’s entrepreneurship. The WeMENA Initiative is another World Bank-sponsored business model competition focused on empowering and supporting women entrepreneurs in developing innovative and financially sustainable businesses.[8]

At Government level, the UAE is a role model for the region with almost 30% female Federal National Council members (higher than the US) and representing 20% of the diplomatic corps.

GCC IN STATS
0%
30% Female Members in UAE Federal National Council
0%
Working women in UAE
0%
Working women in Kuwait
0%
GCC Countries With Plans to Improve Women in Work

IMPORTANT FACT

Companies with gender, ethnic and racial diversity are at least 15% more likely to reap above average financial returns.[18]

INVESTMENT IN WOMEN

Supplier diversification and access to ‘best in class’ businesses are a key driver for the push for investment into women-owned businesses. Investing in women also unlocks new market opportunities by snowballing access to goods and services for women at opposing ends of the income spectrum.[9]

In emerging markets, female-owned SMEs have unanswered financial needs estimated at US$300 billion per annum, highlighting further investment opportunity into women-centric companies.

In 2016, Gulf based SME businesses headed up by women were valued at US$385 billion – a major contributor towards the region’s vision for economic transformation.[10]

Increasing diversity in employment opportunities, technological advancement and the democratisation of information is cited as a catalyst for women entrepreneurs, with sector growth from four to 10% registered between 2011-2014.

The female small business success rate currently stands at 40%, a rising figure that is also prompting demand for more formal entrepreneurial education and training.[11]In the UAE specifically, 50% of SME sector businesses are owned by women.[12]At a global level, while micro and SME businesses are predominantly female-led, only one in five exporters is a women-owned business.[13]

Arab women start-ups continue to make waves in the region with growth on an upward trajectory. Joy Aljouny co-founder of delivery service Fetchr topped the 100 Startups in The Arab World list for 2017, securing funding of US$52 million, while e-commerce platform Mumzworld, raised US$4.3 million. Out of the top 10 Arab female entrepreneurs in the list, funding was raised in excess of US$72.8 million for primarily services oriented businesses in shipping, shopping, social media development, moving and home services and personal help.[14] Another regional success story, Donna Benton, founder of The Entertainer, which registered turnover of US$35.4 million in 2017, recently sold an 85% share in the business to Bahrain’s GFH Financial Group for a reported nine-figure sum.

ACTION AGENDA

Commitment and action to empower women in the value chain presents an invaluable opportunity to not only support gender equality but to also utilise a sizeable untapped pool of creative talent to reach new audiences and, ultimately, develop and sustain mature and efficient supply chains to secure long-term business success.

With many industries facing talent shortages, addressing the needs and barriers facing women along company value chains will be a key differentiator in the marketplace.[15]

Systems and processes within organisations need to be addressed/upgraded to support the transition to a gender equitable work environment. This includes actively adjusting company policies, practices, and investments that impact women along the value chain.[16]

For women-owned micro and SMEs, companies such as Walmart are supporting female economic empowerment. The company commissioned the sourcing US$20 billion worth of products from women-owned businesses for its US operation, and is doubling sourcing from women suppliers in other countries where it does business.[17]

DIVERSITY & INCLUSION

Business success building, not quota filling

Diversity and inclusion initiatives have traditionally been put in place to comply with corporate governance and self-regulation – falling under the Corporate Social Responsibility (CSR) label. Simply hiring minorities, women, people of determination to fulfill a quota or tick a CSR box is not acceptable in the 21st century corporate arena.

Building effective, cohesive and, ultimately, profitable teams, businesses and economies requires a focused diversity and inclusion policy

D&I thought for the day

  • Diversity in the workplace is a variety of different voices each bringing a unique perspective, experience and skill set
  • Leveraging diversity is a conduit to produce better products and services to support financial success
  • D&I is the democratisation of ideas and creativity that resonate in today’s globalised world
  • D&I is not just an HR policy, it’s a business success driver
  • D&I policies and practices address the needs of the individual but support the goals of the organisation

[1]McKinsey Global Institute – BSR Women’s Empowerment in Global Value Chains report

[2]Noland, Moran, and Kotschwar, 2015 – BSR Women’s Empowerment in Global Value Chains report

[3]McKinsey & Company: Women Matter 2014 – UN Women Facts and Figures: Economic Empowerment factsheet

[4]World Economic Forum Annual Meeting commentary, 2018

[5]Chartered Institute of Personnel & Development (CIPD)

[6]World Economic Forum Gender Gap Report 2017

[7]Gulf Business report, 2018 – Closing the Gulf’s gender gap

[8]World Bank – Why Supporting Women’s Economic Inclusion is Vital for the GCC, 2017

[9]McKinsey Global Institute – BSR Women’s Empowerment in Global Value Chains report

[10]Al Masah Capital study, 2016

[11]Al Masah Capital study, 2016

[12]UAE Ministry of Economy

[13]World Economic Forum Annual Meeting commentary, 2018

[14]Forbes Middle East

[15]World Bank, 2012 – BSR Women’s Empowerment in Global Value Chains report

[16]BSR and ICRW, 2016 – BSR Women’s Empowerment in Global Value Chains report

[17]Walmart, 2015 – BSR Women’s Empowerment in Global Value Chains report

[18]McKinsey & Company, 2015 – Why Diversity Matters