Empowering women makes perfect business sense - it's a fact based truth

American entrepreneur Peter Thiel starts his book ‘Zero To One’ with an excellent question: “What important truth do very few people agree with you on?”

It’s surprisingly hard to answer with any meaning and when I first read the book, I struggled to come up with an answer. Not that I didn’t believe in certain things, but I assumed that most people believed in them too.

But recently I’ve been doing some strategy work on global growth drivers and I’m of the fundamental belief that the empowerment of women is the most untapped and greatest driver of global economic growth. Most people disagree.

A global view of just how untapped this resource is makes for powerful reading. 46% of women between the ages of 16-65 are currently not working at all. That is 23% of the world’s population who are able-bodied, and ably minded to work, are not working. This is despite the fact that there is a direct correlation between the empowerment of women at work (judged by more women workers, more women in senior positions, more women in political office) and significant economic growth.

Female empowerment in Rwanda and China

800,000 people were murdered in the 1994 Rwanda genocide, the country was scorched by civil war, and rebuilding it felt like an impossible dream. But their controversial leader, Paul Kagame, managed to transform the nation from an agricultural economy to a knowledge based economy, leapfrogging the industrial phase all together, by unlocking his country’s most powerful resource: women.

Barriers were removed to allow more women access to work, with governmental and legal reforms forging gender equality. As a result, women-owned farms increased by 20% and 30% of parliamentary seats had to be reserved for women. GDP between 2001-2008 grew 8% every year as a result of these policies, while poverty decreased substantially. Kagame, in 2010, called women the ‘keystone’ of Rwanda’s economic success.

While this approach was forged mainly from practical necessity rather than new pro-female attitudes (more women survived the genocide than men), it’s an important example of how female empowerment can transform an economy and as a result, Rwanda’s approach to gender equality should make developed nations like the USA and the UK blush.

Gender inequality has actually increased in the USA, as growth has slowed over a 20-year period, while Rwanda boasts a higher percentage of women leaders in both the public and private sectors than both the UK and USA.

Large Western nations cannot point to our traditional society, our saturated markets and population size as excuses either. China, faced with all those obstacles, has experienced strong growth, and women’s economic contribution is universally accredited with being a key driver. Alec Ross, in ‘Industries of the Future’, writes ‘the progress of women in Chinese society over the course of decades, is the major reason it is the economic power it is today’.

In Chinese factories, women are paid the same as men if they do the same hours and the same job. A quarter of women go to University, where they outperform men. And China leads the world in the percentage of women business founders, with more than 55% of tech start-ups being founded by women.

While these examples do conveniently support my point, it’s noticeably much more difficult to find positive growth stories and statistics in nations that have not unlocked the untapped resource of women in work.

Breaking through religious and cultural barriers in Indonesia

In nations where there are religious and cultural barriers that stop women working, the economy does not grow as fast. Pakistan, Saudi Arabia and Indonesia are three good examples where we can see the impact on either restricting or unlocking the potential of women. The results are stark.

In Saudi Arabia, many women do not drive (although a law permitting them to was passed in 2018), are not allowed leave the house without accompanying a man and are certainly not allowed to hold a job (only 16% of women work).

While in Pakistan, Malala Yousefezi was shot for standing up for women’s education and only 48% of women are literate. The nations are stagnant in their growth, (SAU annual GDP is -1.2% ,and Pakistan are seeking their 12th IMF loan in three decades). Furthermore, they cannot attract or retain the best technological or innovative talent to move forward.

Meanwhile, Indonesia (GDP +5.1% annually), faced with similar cultural tensions towards women, is a very different story. Led by the government, it has defiantly chosen to innovate traditional religious barriers to women at work.

Indonesia is not an easy place to govern, it has a 250m strong population scattered across over 17,000 islands. But they have created a women-friendly culture, knowing that the empowerment of the total population is the fastest way to grow – especially from a technological standpoint.

Female coders are championed in Indonesia and given celebrity-like status. Can you name any famous female coders in the UK or in the USA? There is a balance where the women at work in no way undermines their religious faith or practices. Mixed sex workplaces are the norm, which cannot be said for Pakistan or Saudi Arabia.

This plays out in Indonesian government too where, similarly to Rwanda, law states that at least 30% of a political party’s candidates must be women. Indonesia, in comparison to Saudi Arabia and Pakistan, is dramatically benefiting from the empowerment of women at work, both societally and economically.

The cultural role of women in Japan stifles its economy

Japanese women are some of the most well-educated in the world, but after the first few years of their careers and after having their first child, almost 70% of women drop out of the workforce (versus 25% in the UK, and 30% in the USA).

This is not restricted to particular industries, the impact is across business, medicine, academia and government.

Among executive level managers, only 11% are women. The reasons for this are both emotional and functional. Older Japanese men hold nearly all the decision-making positions and have very traditional views in how they see women. While the working environment makes it almost impossible to be a working-mother.

The average work week for many in Japan is nearly 60 hours. While culturally, after-work drinking and socialising is important to career development. It is seen as a huge part of the job, and a huge barrier if you want to see your children. This is obviously difficult for men and women, but in a society where women have always been seen as the ‘caretaker’, this has a bigger impact upon women’s career ambitions.

Unsurprisingly, there is clear economic stagnation in Japan. GDP shrank at an annualized rate of 2.5 percent in the last quarter of 2018 - the worst downturn since the second quarter of 2014. The future role of women at work in Japan continues to be debated.

Developed nations are overlooking the most powerful economic growth factor: women

When looking closer to home, it’s obvious that developed nations across the board are still not empowering women enough to reap the economic benefit.

Even though we don’t have predominant cultural/religious barriers to empowering the female workforce in the UK, and we are currently led by a female Prime Minister, we have still not worked out the best way to un-tap the potential of women at work.

There are still too many boardroom tables with little or no women present (in the FTSE 350, only 23% of board roles are held by women, and the UK ranks a lowly 41^st for percentage of female managers), there are not enough start-ups founded by women, and there are not enough women in governmental positions (32% of MPs are women).

Although I currently work for a company that can boast strong statistics in women’s empowerment (FutureBrand’s Global Management Teams are 50% female, whilst in Europe they are 60% female) I have, in my career, seen the customary obstacles that women have had to leap, and that men do not. I’ve been lucky enough to have three great line-managers in my time, all women. All three were phenomenal in their jobs and for my career development. Yet I saw first-hand, how they had to work harder, longer and smarter than men to get into those leadership positions.

The opportunities for improvement are even bigger in the USA, particularly in Silicon Valley and in Washington. Although the surge of women to Congress is a welcome development, it must not be just a symbolic one.

Whilst we are desperately trying to reimagine and unearth new growth drivers, we are missing the biggest and most obvious.

If there was another resource that was so powerful and so readily available, the government and big business would plough money into finding solutions to unlock its potential. But the empowerment of women is so clothed in emotion, tradition and cultural history that we’re not being smart enough to see the opportunity in broad daylight. We just need to look at the facts.

The underlying forces that stop the empowerment of women at work are sometimes overt and sometimes impossible to see. But both are just as powerful and both, just as damaging. Every time a woman is not promoted because she’s a woman, or a girl is stopped from going to school because she’s a girl, we take a global step backwards, we halt global momentum, we stop global progression. This is not an opinion, this is a fact-based truth.

In a few years’ time, if I re-read ‘Zero To One’ again, and I’m faced with that first question, “What important truth do very few people agree with you on?”, I hope I’ll have to think of a new answer.

A shorter version of this article was originally published in LS:N Global.