Why women hold the key to economic growth

Why women hold the key to economic growth

What is the most underutilized asset in governments’ economic arsenal? Women. While the slowing global economy has pushed countries to explore a new cadre of sometimes unproven policies in the quest for growth, many have not yet fully committed to the full participation of women as economic actors.  

Just about everywhere, women participate less in the paid economy than men do. In Turkey, for instance, the World Bank estimates that women made up only around 30 percent of the labor force in 2014. More equal economic participation by women would yield large dividends in terms of growth: the McKinsey Global Institute recently estimated that raising women’s wages and labor force participation to match those of men would boost global output by more than 25 percent compared to business as usual. This would be like adding a new United States and China to the world economy with the global economic potential of women likened to a “third billion” that can follow India and China into the global marketplace. Realizing even half these gains would be an insurance policy against chronic slow growth. 

For businesses, too, greater gender equality translates to better performance. In a survey of nearly 22,000 companies around the world, the Peterson Institute for International Economics found that having more women on corporate boards and in leadership positions tends to be associated with higher profitability. Gender-biased firms shoot themselves in the foot by underutilizing talent. 

Far away from corporate head offices, paid work for women transforms prospects in the poorest households and communities. When women are paid for their work, and have control over how the money gets spent, they invest much more of their income in their families’ education and health than men do.  

Gender-based discrimination was always morally wrong. Today, for countries, companies, and societies alike, it is simply unaffordable, tantamount to economic mismanagement of the grandest scale. 

Turkey used its 2015 presidency of the Group of 20 leading nations to champion the importance of women’s economic empowerment to strong and inclusive growth. Ankara lobbied successfully for the creation of a W-20 engagement group to keep gender issues high on the G-20’s agenda, helping Turkey position itself as a country that wants to cultivate concrete gender credentials. 

Laying the foundations for equal economic participation by men and women demands legal and political reforms; it will also require a revolution in our minds and behavior. In too many countries, laws restrict women from taking certain jobs, or make it harder for women entrepreneurs to obtain access to land, capital, and market information. These laws need to change. There are also many practical measures, often low in cost but high in impact, that can help women thrive as economic actors. 

Governments and the private sector can facilitate access to financing, technology and business support services for businesses run by women. Small- and medium-sized enterprises (SMEs) deserve particular attention: not only do they generate the bulk of employment, the main channel through which most people share in economic growth, but women-owned SMEs – unlike male-owned ones – tend to put women in senior roles. 

Trade is an important ingredient in success for many SMEs, especially in developing countries. Businesses that import or export, or sell to companies that do, are generally more productive and more profitable than their domestically focused counterparts. The result is more and better-paying jobs, which often leads to better and more sustainable socioeconomic gains when they go to women. This is why the International Trade Centre makes a priority of empowering women-owned SMEs with the tools and market intelligence to be able to internationalize and compete in global markets. It is an investment that delivers far beyond mere transactions. 

Tapping into world markets requires networks, connections and information. Not surprisingly, this can be an especially tall order for women-owned businesses. To address this challenge, ITC organizes an annual Women Vendors’ Exhibition and Forum. The event brings together women-owned businesses with potential customers, and convenes thought leaders from governments, the private sector and civil society. It typically yields millions of dollars in prospective deals, together with pragmatic ideas for connecting more women to international markets as entrepreneurs, employees, producers and consumers. 

In 2016, the ITC is proud to team up with the Women Entrepreneurs Association of Turkey (KAGİDER) to host this year’s edition in Istanbul in September and create economic opportunities for women in Turkey, in the region and beyond. These are, after all, opportunities that we can no longer afford to miss.

*Arancha González is the executive director of the International Trade Centre and Sanem Oktar is the president of KAGİDER.