Women: Worth potentially more than $12 trillion by 2025, says McKinsey - Women's Agenda

Women: Worth potentially more than $12 trillion by 2025, says McKinsey

In business, big numbers get attention. Especially when they indicate opportunity.

Such numbers don’t get much bigger than the latest released by McKinsey Global Institute, which finds that if all countries made rapid gender equality improvements, the world could see as much as $12 trillion added to its GDP by 2025.

That’s a significantly higher estimate on the economic potential of gender equality than first thought. It is, as McKinsey found, the equivalent of the current GDPs of Japan, Germany and the UK combined.

So there’s the big number declared. But how do we actually get there? Is it even possible?

McKinsey defines “rapid improvement” in gender equality as seeing every country in a region meeting the country that’s currently performing best in that region. They call this the “best in region” scenario. Given that means such levels of equality are already occurring somewhere in the region, the $12 trillion figure is certainly possible.

Now take a different and more ambitious potential scenario, one where women have equal amounts of participation in labour societies as men, and the estimated GDP benefits climb even higher to $28 trillion. This scenario is significantly more difficult to qualify as ‘possible’, but it’s certainly one that showcases some serious opportunities.

McKinsey finds the path to gender equality can come through six interventions, which it determined after examining 75 potential interventions and 150 successful examples globally that have narrowed gender gaps. The six key interventions include: financial support and incentives; economic opportunity; capacity building; technology and infrastructure; as well as laws, policies and regulations.

The great thing about these interventions is that they don’t necessarily rely on governments (although that certainly helps) but can be pursued by businesses, NGOs, within the community, or via partnerships between all such sectors. Indeed, many of the examples cited by McKinsey came from big business, including one from Rio Tinto, with its flexible work policies highlighted as an excellent technology and infrastructure example of supporting employees with families.

These six interventions should not be viewed as challenges or things that will get in the way of ‘business as usual’, but rather opportunities for ‘business that’s better’. They’re interventions that make good economic sense, things that will ultimately see more women enter and stay in the workforce.

The report titled, The power of parity: How advancing women’s equality can add $12 trillion in global growth, examined 95 countries (accounting for 93% of the world’s population and 97% of GDP) across 15 indicators covering gender equality on economic, social, legal, political, and physical measures.

From there, it established a Gender Parity Score (GPS), measuring how far a country has moved on gender parity. While economic development helps countries close gender gaps, as McKinsey senior fellow Anu Madgavkar notes: a number of other indicators are also essential, including education levels, financial and digital inclusion, legal protection and unpaid care work.

The latter is particularly challenging. McKinsey finds 75% of unpaid work is still undertaken by women across the world, including childcare, domestic chores and looking after the elderly. It values unpaid work as being worth $10 trillion a year, or 13% of global GDP.

In developed countries, McKinsey finds that women contribute between 33% and 42% of GDP. In Australia, that figure is comparatively low, at just 35%. This is despite women making up 46% of our labour force. Ranking us on a number of gender inequality indicators, McKinsey finds inequality in political representation as ‘extremely high’ compared with other developed nations. It also sees unpaid work, leadership positions, the perceived gender wage gap for equal work, legal protections and violence against women as serious areas of concern for us locally.

Our new Prime Minister Malcolm Turnbull has put innovation at the heart of his leadership. Is there any better innovation than finding as many avenues as possible to work with the entire population, rather than merely certain segments within it?

Check out the full report here

Key figures from McKinsey

• If every country met the gender equality standards of the best performer in their region, global GDP would increase US$12 trillion by 2025
• If every country saw women reach parity with men on workforce participation, global GDP would increase $28 trillion
• Women only generate 37% of global GDP, despite representing half the world’s working population
• 75% of global unpaid work is currently being done by women, worth an estimated $10 trillion a year
• More than half (54%) of the potential increase in GDP can come from increasing women’s workforce participation
• The world could benefit from 240 million workers through higher female workforce participation
• Women make up just 22% of ministerial and parliamentary roles worldwide
• 723 million women are affected globally by violence

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