Renewing AmericaRenewing America

Article

PrintPrint EmailEmail ShareShare CiteCite
Style:MLAAPAChicagoClose

loading...

Women Are the New Global Growth Engine

Author: Isobel Coleman, Senior Fellow and Director of the Civil Society, Markets, and Democracy Initiative; Director of the Women and Foreign Policy Program
September 15, 2010
Forbes Online

Corporate executives take note: In coming decades, the majority of global population growth will occur in countries where gender disparities are greatest and where conservative traditions and customs work against women's rights. Entrenched gender discrimination remains a defining fact of life for most of the world's bottom 2 billion, and that is not only a critical human rights issue but also a pressing economic issue. It causes staggering losses in productivity, economic activity and human capital.

Conversely, the empowerment of women--as customers, employees, entrepreneurs and participants in local, regional and global supply chains--is akin to stumbling on an enormous emerging market. Indeed a recent Booz Allen study suggests that women represent the "third billion," potentially equivalent to the billion-plus-population markets of India and China. Yet that potential will only be realized if women are better educated, are healthier and more secure and are more enabled by their communities to participate in the global economy. That is why the Clinton Global Initiative has chosen "Empowering Girls and Women" as one of the four themes for its annual meeting next week.

Multinational companies searching for growth in the developing world should realize that breaking down barriers and creating opportunities for women makes strong business sense. Just as corporations have found that "going green" can add real profits to their bottom lines, companies that recognize women's empowerment as critical for increasing labor-force productivity, improving the quality of global supply chains and expanding their customer base and distribution networks will enjoy a competitive advantage. With the right brands and promises of investment and employment, the private sector can be a powerful partner to governments and non-governmental organizations in a transformative push for improvements for women.

Some companies are already deploying their assets to improve the lives of women in emerging markets. Tupperware is one, the iconic American company that invented the party-based sales model--by women, for women--back in the 1950s. Today Tupperware is replicating that model overseas. Nearly 50% of its revenues come from emerging markets such as Egypt, India and Indonesia. In India alone, its all-female sales force numbers more than 50,000. As bread-winners, managers and trainers of other women, Tupperware ladies enjoy greater self-confidence and stature and become leaders in their communities.

Standard Chartered Bank, which generates 90% of its income from operations in Africa, the Middle East and Asia, is another company that understands the positive effect of women's empowerment on profitability. To differentiate itself, it focuses on women in markets where they have traditionally been underserved. In India and Pakistan, the bank operates all-female branches; in Africa, it runs the "Diva Club," a savings program that encourages women to save in groups and facilitates networking among them. Standard sees these programs as valuable in building customer loyalty and creating a first-mover advantage. Along the way, the initiatives also bring underserved women into the financial mainstream, helping them become savers for their families, expanding their decision-making and building their businesses through improved financial literacy and access to credit.

Here are five principles to keep in mind for companies that operate in emerging markets and are just now considering women's empowerment.

First, define and measure success appropriately. Obstacles to female empowerment differ across regions, so a company must identify the relevant issues in each market. For example, do female employees need a male family member's permission to work? Do they have access to financial services, so they can actually control their incomes? Do they have transportation and safety constraints different from men?

Second, although donating money to women's empowerment initiatives is a good start, incorporating such objectives into business practices is even better. Bringing business women into the global supply chain has significant potential. Hiring women as salespeople also holds great possibility, as Tupperware's experience shows.

Third, companies should provide skills and resources to female entrepreneurs and business leaders. This can mean expanding financial services to female clients--not just credit but savings products, too--as Standard Chartered Bank has done. Or it might mean support for an existing organization that helps women obtain access to health care, identity cards, or property rights. Leadership training, as well as secondary and university education, is central to developing the next generation of female business leaders, managers and activists.

Fourth, do not shy away from taking on issues. Although companies understandably resist being associated with controversy, they do have an interest in engaging in thorny subjects such as domestic violence (the lost productivity of both men and women in the aftermath of domestic violence is enormous) or women's access to reproductive health care (runaway population growth can strain resources and threaten a country's stability).

Fifth, corporations should not try to reinvent methods that have already been perfected by others, simply to appear innovative and committed. Instead they should look to partner with the many excellent nonprofit organizations that have been working on issues of women's empowerment for decades. Organizations such as CARE, Vital Voices and Women's World Banking are eager to join with the private sector to develop programs that can take advantage of corporations' expertise and assets, including their brands, employees, supplier bases, technology and funding.

Closing the gender gap and improving women's rights in emerging markets may take generations, but the benefits will be huge, and not only for individual women and their families but also for global markets. As companies seek new sources of revenue in developing economies, they will find that gender disparities pose an obstacle. The sooner and harder the private sector works to overcome gender inequality, the better off the world--and companies' own bottom lines--will be.

Isobel Coleman is a senior fellow at the Council on Foreign Relations and director of the Council's Civil Society, Markets and Democracy Initiative. Her latest book is Paradise Beneath Her Feet: How Women Are Transforming the Middle East (Random House, 2010). This year she is also serving as a track leader for the Clinton Global Initiative.

This article appears in full on CFR.org by permission of its original publisher. It was originally available here.

More on This Topic

Audio

Diversifying Global Supply Chains

Speakers: Astrid Pregel, Anabella Ruiz de Freeman, and Elizabeth Vazquez
Presider: Isobel Coleman

Astrid Pregel, Anabella Ruiz de Freeman, and Elizabeth Vazquez discuss the opportunities and challenges to integrating women-owned businesses...

Video

Empowering Women Globally

Interviewer: Isobel Coleman
Interviewee: Alyse Nelson

Alyse Nelson, Co-Founder and CEO of Vital Voices, discusses the organization's work to empower women around the world with Isobel Coleman,...