COVID-19 has accelerated economic trends, such as virtual work and automation that will reshape the future of work. How can governments, multilateral organizations, and the private sector promote economic recovery for those hardest hit in the COVID-19 economy, including women, people of color, and lower-wage workers? What skills will become more or less in-demand? How can public and private sector leaders help drive reskilling at scale? Speakers, Kweilin M. Ellingrud, senior partner at McKinsey & Company, and Henriette Kolb, head of gender and economic inclusion at the International Finance Corporation, discuss the latest research and potential policy responses.
Rachel Vogelstein: Thank you, good morning. Welcome everyone, my name is Rachel Vogelstein. I lead the Women and Foreign Policy program at the Council on Foreign Relations, which analyzes how elevating the status of women and girls advances US foreign policy objectives. Our discussion today is focused on the future of work in the COVID-19 economy. Even before the pandemic, the rise in automation and virtual work had already shifted the economy, and COVID-19 has accelerated many of these trends which promise to persist long after the virus gets under control. How should governments, multilateral organizations, and the private sector respond to these shifts? In the wake of COVID-19, how can policymakers and leaders promote economic recovery for those hardest hit, including women, people of color, and lower wage workers? And what skills will become more or less in demand in the economy of the future? To shed light on these questions, we are very fortunate to have two terrific experts with us today. First, we are very pleased to welcome Kweilin Ellingrud, the senior partner at McKinsey who's with us. She's a member of the McKinsey Global Institute Council which provides expert input for research on global economic business and technology trends. Her areas of expertise include women in STEM, accelerating gender equality through investment strategies, women and leadership, and the future of work. Welcome, Kweilin. We are also delighted to host Henriette Kolb who leads the gender and economic inclusion group at the International Finance Corporation, a member of the World Bank Group. She serves as an advocate for gender equality issues in the private sector and works with IFC’s clients to include both women and men as entrepreneurs, employees, consumers, community stakeholders, and leaders. Before joining IFC in September of 2013, Henriette was the CEO of the Cherie Blair foundation for women, where she remains involved as a senior advisor. A few housekeeping notes: our session today will be on the record. If you'd like to ask a question, please use the raise hand function on Zoom to be placed into the queue. I will begin with a few questions for each of our speakers and then open the floor to participants. Kweilin, let's start with you. At McKinsey, you've studied the ways in which the world of work was shifting even before the pandemic in response to artificial intelligence, automation, robotics, and other changes. What are the most important trends changing the future of work and which do you expect will persist post-COVID?
Kweilin Ellingrud: Absolutely, thank you Rachel. You know, there were three broad families of trends, both pre-COVID, that have accelerated through COVID and we think will persist after COVID. The first family or group of trends would be around automation and AI—acceleration of, frankly, a lot of things that were going on before. And I’ll talk a bit about how this changes occupations, the skills that we need as well in a moment, but let me briefly touch on the two other families of trends that are happening. The second is around remote work, virtual meetings, and travel and no surprise to this group that has dramatically accelerated during COVID, right, the biggest global work from home experiment we've ever experienced. And we think that work from home will continue to persist post-COVID, not at the same levels, necessarily, but in a survey in the United States, for instance, 70% of employees said that being able to work from home at least one or a couple of days a week, was a top priority in selecting their next employer. We know that flexibility was the number one thing that employees wanted from their employers pre-COVID and they got that in spades. So we expect work from home to continue to persist. We think business travel will slowly gradually sort of get back, but not to full pre-pandemic levels. We estimate at around 80% of pre-pandemic levels business travel will top out so as opposed to four days a week or four weeks that, you know, you might take three weeks out of four of travel or, you know, you might take one less trip at the margin and that affects, of course, airlines and hotels. But it also affects the downstream businesses of restaurants, transportation. And keep in mind that business travel was the higher profitability portion of the business for many of these industries so disproportionate effect from that 20% drop in business travel. We also have leisure travel in this category of trends and we think after an initial spike in leisure travel, what we call revenge travel, where people who haven't seen their loved ones for a year, a year and a half, go back out and travel much more than even before, then we think it will settle into pre-COVID levels so leisure travel will be there. And then the third category of trends is around e-commerce and virtual transactions, and this is a holistic set of trends around e-commerce, much more buying, online restaurant and takeout delivery, online groceries, online education, which broadly has been deemed to be much more effective for older age groups than younger age groups. Telemedicine, as well, will persist a bit, but not as much as during COVID, as people have gotten more comfortable with a lot of these things. And as we do surveys across this category of e-commerce and virtual transactions, a lot of people say, you know what, now that I’ve loaded all my preferences, I’ve loaded my grocery list online, yes, I’m going to continue to do this post-COVID, not at the same levels, but occasionally, and now that I know which restaurants I want for takeout and delivery, that's a lot easier. So some of these behaviors will persist. But let's talk a little bit about that first trend, AI and automation in particular. It's going to shift jobs and occupations dramatically. In fact, in the US alone, much less globally, about 17 million people are going to need to change jobs. 15 million or so of them completely change occupations. And about 80% of those people are going to fall into just four job categories: office support largely assistance, production work which is largely manufacturing, customer service and sales, and then food workers, food services, which is waiters, bartenders etc. 80% of those 15 million transitions across occupations in just those four categories alone, so dramatic shifts in occupations. But also significant shifts in the skill mix that we’ll need. So we're going to need a lot more, post-COVID and post-automation and AI trends, a lot more skills and technological skills and social and emotional skills. Technological skills isn't, do I know how to code, it's do I know how to interact with technology to monitor machinery and then follow the directions to replace a filter or whatever it is based on the triggers that I’m getting. And social and emotional would be, can I know how to read an interaction and react appropriately. Those two skills together make up about 30% of the hours and underlying activities that we do, but we're going to need a pretty dramatic increase in those two skills alone. We’ll actually need a lot less skills in the physical and manual labor and then basic cognitive work: things where I’m looking at a set of data and making a very simple judgment, or you know, a judgment that could be much more rules-based so automation in AI and COVID will also affect the skills pretty dramatically that we’ll need going forward.
Rachel Vogelstein: Kweilin provided an overview of some of the shifts. Henriette, I’d love to turn to you to talk about where we are in this moment in this COVID-19 economy you've been tracking at IFC the impact. Not only on the economy as a whole, but also on particular groups who have been hard-hit, including women. So how has COVID affected groups differently in the workplace, not only women but also racial and ethnic minorities, low-income workers, those in the informal economy? Henriette, can give us a snapshot as to where we are at this moment?
Henriette Kolb: Rachel, absolutely. But before I kick off though, with six moments of how the pandemic has accelerated underlying inequalities, I just want to first hope that you and your loved ones are healthy and safe and secure. Our colleagues in India. In fact, actually our offices closed because it's so currently challenging to keep offices open and able colleagues to conduct their work. And so I just wanted to say up front and we appreciate you being here, I think we have very good participation. Allocating time for conversation like that is now even further than it has been before COVID, even though we are mostly settled at home. So let me start off by six moments of how I see the gaps, accessibility and then come back with sort of a couple of moments of hope on how can we go around tackling those widening gaps. So what gaps of particularly widened: one we see a gap that has widened being finance, in particular as businesses we're moving to access working capital we've seen that women entrepreneurs in particular were having a harder time. And that related to a bunch of issues, but one certainly was that women entrepreneurs with disproportionate in having to temporarily close their business. In fact, most of our work is of course in emerging markets and we've seen gaps of 26% in sub Saharan Africa, in terms of temporary business closures. The second reason as to why women entrepreneurs have a harder time accessing finance, but not just finance, also insurance products and housing finance. Is because, obviously, in times of crisis, a lot of our financial institutions that we invest in actually hunkering down and, obviously, assuming that women entrepreneurs are more risky and less likely to bank them. The second gap, and we've just actually heard this morning, if you looked at the Wall Street Journal, is 1.5 million women and mothers, in particular, haven’t come yet back to the workforce and that's just in the US. So I've seen that care gap just being widened. At some point there were 1.6 billion kids out of school. And the majority, not all but the majority of that care work is being shouldered by women, which means that paid work is dwindling and their unpaid work has increased quite rapidly. And we foresee this to be the case for quite some time to come. That brings me to education, and actually the current situation gives you just a quick overview as to how dire it is. If you look at, for example, just Latin America and the Caribbean, 140 million kids are still out of school. And combined, if you look at one year past, we've seen Latin America and the Caribbean to have the highest closures of schools, of hundred 56 days. And then actually the second next region, South Asia of 148 days of school closure. And this transition that Kweilin described from offline to online for most of the learning environments that we invest in has not panned out and has not generated the learning results we need to see. And if you actually look before the pandemic even there we saw the number of years in schooling have not translated into actual learning. We’ve called it a learning crisis yet before even COVID hit. And then lingering on the education and digital gap for a minute what we've also seen of course that in a rush to digitize primary, secondary school and so on, so forth, that has worked better for socially affluent groups and, of course, much less well for, in particular, kids whose parents are frontline workers who don't have the time to really focus and sit at home and help them navigate the online system, but that has been compounded by online aggression, online bullying, and harassment and really made it harder for women and girls at some points also to stay connected. But if you look at the mental health coin, there again we've seen a differentiation on gender. Boys in school, having had much more challenge in terms of mental health declines then some of the girls, and this is just based on developed market data. In most emerging markets we have no data on mental health. But let me just wind up on the challenges side with two more gaps, one is, of course, the gender-based violence situation has increased drastically around the world in developed and developing markets and we've seen that both at workplace as well as in the domestic sphere. And then, last but not least, we've seen, of course, the tech gap. 23% of women are less likely to access mobile Internet, being played out in urban and rural centers for low income and underserved groups, that they have had a much harder time to access an Internet and mobile Internet reliably. And then compounding that was some of the trends that Kweilin outlined also suggests that women are at least an initial stage (inaudible) compared to their male counterparts. Because they're more likely to be concentrated in routine repetitive analytical jobs and so therefore having a harder time to actually keep those up, and so, if we look at the absolute numbers, we think that women will lose a higher proportion of the jobs, at least temporarily. Now I'd like to switch to some of the more good moments, and what gives me hope to continue to work on that space and really make sure that we're doubling down to prevent further regression. One is media attention, if you look at the reporting and the nuanced reporting around the COVID-19 impact on men and women, and then different racial minorities, as well as, of course, at low income populations, that has moved from page 15, page 16 and so on, right into the front page, and that gives me really sort of pause for hope, because if you can keep it there post-COVID, the conversation around how the trends of work impact all those groups differently and try to strive for equity collectively, I think we will be in a better place, so that's one. The second one that gives me rise for hope is shareholder interest. Not just the World Bank shareholders, which are the governments, but also if you look at the private shareholders and companies have really doubled down in terms of wanting to invest, with an ESG and an environmental and social lens. And so, actually our bond issuance on the treasury side has really skyrocketed when investors are asking, can we seem to something that creates investments and growth that is more equitable so that's encouraging. The third piece of hope is clients, even though at the beginning of the mark so March, April of last year they were maybe slower to uptake and work on inclusive dimensions of retooling their workplace, because there were so busy trying to keep the business afloat. But actually since then we have seen before COVID and during COVID data and how many companies that we invest in focus on gender equality, it was absolutely constant and, in fact, in some regions, we saw an uptick because companies wanted dedicated advice around how to close the gender gaps, because they could see that they've spent years of building a female talent line and, that being eroded in the snap of six months, and the last summer. So I’ve seen huge interest. The fourth dimension of hope is product innovation and we've seen really COVID accelerate some of that, in the sense of, before we all focus on SME credits and now we've seen insurance companies, look at insurance solution housing finance, in fact we've done our very first housing finance deal with a gender lens, 70 million for low income women in Panama. And so, that is all new, that hasn't happened before, so we see this opportunity for innovation. And then the last one is partnerships. And I think we stay tuned on that. We have obviously really some great announcement coming out shortly of the G7 that the UK is leading, but also the Generation Equality Forum that UN Women is spearheading and so we're hoping to really make a dent because the problems have gotten so big that certainly no institutional nor multilateral organization can solve for this on their own.
Rachel Vogelstein: Henriette, thank you for giving us opening some windows of hope, given that really challenging landscape that you outlined. Kweilin, I’d love for you to jump in to talk about some of the gaps that have been exacerbated by the pandemic from an economic perspective.
Kweilin Ellingrud: Absolutely, I think just building on what Henriette was describing, you know, different impact by gender, by different groups what we're seeing also is that intersectionality and the additional challenge so, for example, three broad groups that we've seen be disproportionately affected, at least in the United States: mothers of young children (Henriette, as you were describing, especially given this digital remote learning,) Black women, and senior women. And for Black women, it's a coming together of both work inequities in the workplace, but also health inequities. And so Black women are two and a half, almost three times more likely to have experienced the death of a loved one during COVID than their white female peers. So they're off the charts more likely to have experienced that, at the same time they're one and a half times less likely feeling comfortable sharing that at work. And so you have these health and workplace inequities coming together in a really challenging way during COVID, and Black woman and frankly Black men, are considering either stepping out of the workforce altogether, given all of these other challenges, or downshifting, going from a full-time job to a part-time job or maybe a line role to more of a staff role, something less intense. They're considering doing that at higher rates than their white female peers. So that's been one challenge. The other challenge that was a bit of a surprise to me actually is for senior women. And senior women in organizations typically tend to take on more visible and active mentorship-sponsorship roles. They're much more likely to sponsor other people of color, other diverse leaders. During COVID they felt a lot more pressure to work more hours and this “pressure” to be always on, almost half of them have felt pressure to be always on. And have felt consistently exhausted and so disproportionate effect on those senior women as well, which was a bit surprising to me.
Rachel Vogelstein: Given the landscape of challenges that you've both outlined, I’d like to turn the solutions. Kweilin, perhaps we can start with you, I know you and I, with some colleagues recently had an opportunity to write a piece in Foreign Affairs, about how to ensure robust economic recovery for women, in particular, given the challenges they faced. I’d like to ask you to perhaps broaden the lens. What do you think it will take to get back to pre-COVID levels of employment? For women, for racial and ethnic minorities, given the sexual forms of discrimination and gap that you just outlined, low-income earners, others who've been hardest hit?
Kweilin Ellingrud: Yeah, it's going to be a really big challenge, and as you described Rachel, the question is, how do we get back to pre-COVID levels of job inequality—not, how do we get back to full equality, but how do we just make up the ground that we've just lost over this last year? And just to put that in perspective, the economy, GDP overall will recover faster than the jobs will, right, and this is quite common. You'll often hear about a jobless recovery. You heard about this in 2008. If you look historically you heard about it again in 2001. Now we've got not just the COVID effect but we've also got this accelerated automation, which is also eating away, particularly at that lower scale lower paid jobs, and so I think it's going to take even longer to rebuild those jobs. And so, if you look at how jobs and when jobs actually recover for different groups, the overall economy will recover job-wise in about 2023, earlier for GDP, of course, but women will take about 18 months longer to get back to pre-COVID job levels of inequality. And if you have less than a high school degree or less than a college degree, or you make less than $35,000 or less than $50,000, those gaps are also significant, so two, three, even four years longer than the rest of the economy to recover to those job levels. So the gaps that we're talking about are quite significant and to your question, Rachel, what can the government do, what can organizations do, I think a few broad things and Henriette touched on one of them. I think, treating care as an infrastructure investment across the United States would be a big step in the right direction, and this is, of course, cultural. It differs from country to country, but if you compare the level of care benefits that we've got in the US, compared to other developed countries around the world, there's a pretty big gap, and I think moving in that direction there's this window of opportunity where I think many people across the country have started to see care as inextricably linked from the paid work that you do. And also employers, as well as the government have stepped into much more of a personal space. I think before employers were, you know, we're going to keep this into the work realm, the employment realm. And now it's very hard to disentangle what is personal when I have to take a day off to take care of my sick kids. That line I think is blurring quite a bit, so I think number one, governments and employers could really step up on care, and this is especially in the United States but, frankly, more broadly. Second, I think, governments and employers need to step up and think really creatively on reskilling. The 17 million people in the US alone, much less more globally, who need to change occupations, most of those need to upscale at least a level or two. They'll need higher levels of education, but significantly different skills and more complicated skills. We have never embarked on a challenge of reskilling at that magnitude, 17 million workers over the next ten or so years. And to do that well and seamlessly in an employment market that is notoriously opaque, it's hard to know who's hiring. How do I over the next few years, build the skills to get to a higher paying job, that is a very challenging, not transparent market. How do we collaborate better, double build the skills and bring the transparency there, I think, is a place really ripe for government and employer collaboration.
Rachel Vogelstein: Henriette, I’d love to pull you into this conversation about solutions. Kweilin touched on what governments might do, what the private sector might do. How are multilateral institutions responding? What has the focus been at IFC, and what would you like to see, not only multilateral organizations, but government actors and private sector leaders do in response to any of the challenges you've outlined.
Henriette Kolb: Just lingering for a minute on the care agenda, I think, is an important one and, frankly, it’s ridiculous it's the 21st century, and we haven't resolved one of the challenges that really keeps, at least in many economies 30 to 40% of women out of the labor force. So that's one thing that we are very much doubling down. We've been doing that since pre-COVID where we try to understand how can employers that we invest in, but also frankly as a multilateral institution, engage with working parents and provide childcare support, because we know it's out of reach for many governments for fiscal reasons that we invest in, to actually show that that immediately right. So we know that the private sector needs to needs to step up on this. But what we've really focused on is presenting what the business case is. Why would an employer focus on providing on-site childcare, off-site childcare, vouchers, back-up childcare, summer childcare, so depends of course what form is appropriate for the context and what working parents need. But why should the private sector shoulder that and what's in it for them? And so that's been very helpful in helping companies around the world, understand what that investment that is an upfront investment means in terms of long term savings: in terms of retention of talent, attracting of talent, making sure that you don't lose training costs because you've obviously inducted an employee, and if you see, for example in Japan on a great story with the bank, they actually were able to save 45 million, because the returnship of mothers went from 28% to 89% because they provided child care support. So having these concrete examples of how this is a win-win for the next generation in order to be able to meet the skills demands for the economy to grow, because they have the full labor force participation of both genders, and for the companies themselves has been absolutely critical. But, to be frank, in the beginning, when we talked child care, I see people like, you’re a development bank, why are you talking about childcare, what's that got to do with your business. And so, bringing that as important, and now, frankly, we have a whole set of bilateral (inaudible) and others who are asking how can we do more, how can we come in to help on that. That brings me to the government responsibility. What's been really interesting in this work, what we've seen is 28 countries make it already mandatory around the world to provide childcare for the private sector. But oftentimes that regulation is triggered by the number of women employees. So that's, of course, then, making it harder for companies to employ more women so, for example in Jordan, if you employ more than 20 women, you have to provide childcare. And it's really not helpful because it then doubles down and social, cultural norms. It sort of means that men are not interested in care, and yet they would want to be part of that care responsibilities and so helping governments to understand where legislation is helpful and what legislation could look like, so that it actually enables the private sector to do the right thing is quite important. We've seen in the Women, business, law report that was launched in February 2021 that actually care and parental leave is one of the topics for reforms that has accelerated during COVID which is encouraging. 14 measures were taken by governments around the world to reform on that. The UAE, for example in store for the first time parental leave. We have seen some positive changes, but again it's relatively slow and more needs to happen. Let me jump on a couple of other points that I think is quite vital. I mentioned briefly education. I think doubling down and looking on what type of investments in the education sector pay off in terms of return on investments important what we've seen as a lot of governments rush to physical infrastructure classroom laptops computers and so on, so forth, but actually the learning outcomes don't merit the investment. But an investment, for example, quite simple investment we've seen (inaudible) where you inform parents and their kids in terms of the benefits of education, the future trajectories around incomes and you help them understand why quality learning is important, has seen huge outputs and the cost intervention was relatively limited. So a better understanding of what works in the education sector and really placing, to Kweilin’s point, huge and enormous effort on human capital and not just physical infrastructure. But last is physical infrastructure, I think there I just wanted to point out a couple of things which have to do with obviously broadband access, affordability on Internet access, and the scaling parts of it. And there we have put together a big initiative called Digital to Equal. And it combines 17 of the largest platform companies, both in regions, country and then global players, to help them understand where some of the key gaps are, in their leadership and their workforce on their platforms in terms of providers in uptake of services and goods and financing and then close and double down on that. And oftentimes most companies have no idea. So when we started working with Uber and now we're (inaudible) to better understand who's riding, who’s driving, why are they riding. Is it affording mobility? Is it affording more access to workplaces? A lot of times there were no answers to the question so really finding out the evidence as to how those new forms of engagement online will pay the transport, eating really shift. Who is using those services and who is providing them and what is the takeout and is the well-being of those workers on the platform being currently fully met or are there opportunities to really expand on that. And I think there are and where we have to create group demand we can't go company by company. Does that from a scalability and affordability point of view, would probably be very tricky. I’ll pause here and then we'll come back to more solutions if we have time.
Rachel Vogelstein: Terrific. Lot of room for improvement and important avenues to explore there. I want to open the conversation to our participants, so please do use the Zoom raise hand function if you have a question and we will begin with Emerita Torres.
Emerita Torres: Hi everyone, thanks so much, it's such an insightful and interesting conversation. My name is Emerita Torres, I’m the vice president for policy, research and advocacy at the Community Service Society of New York. We've been tracking the hardships facing low-income families and households in New York City, as it relates to COVID and the recession, so we've been really tracking this. I’d be interested to know your views on gig workers in particular, you know, the rise in gig workers and the lack of labor protections and where you see that space changing because it's really been concerning for us to see the lack of labor protections, benefits, and the like. Thank you so much.
Kweilin Ellingrud: I’ll start in. Henriette please add on, thank you for your question, Emerita there has been a significant increase in gig workers, I think something like two-thirds of gig workers also typically have another job right, so they might be a student, this might be just a supplementary income. But for many it is employment but it's not full employment, and I think that's where some of the concern comes in, is that we may actually be under-estimating our unemployment numbers. Because people have good jobs, they may be driving for Uber or Lyft, or maybe they're kind of a temporary or seasonal worker for Amazon or doing Amazon deliveries, but that is not full employment from their perspective. Right, they need more than that income to actually support themselves or their family. And I think that's where a lot of the challenges come in, of how do we make sure that we have full employment versus partial employment, with more and more of this good work. And then to your point, I think this time in the pandemic, we did see unemployment benefits going to gig workers, which was encouraging, I think a good step in the right direction. But we need to continue to see more of those benefits, given the shifting nature of employment that's kind of unfolding in this country.
Rachel Vogelstein: Kweilin, thank you and please go ahead.
Henriette Kolb: Just from a global perspective and that was what we wanted to find out when we did this big study with Uber. We looked at six markets to better understand what are some of the barriers, what are the opportunities for men and women, it was interesting that for many women actually more so women, that was their first job and that was adopted took particularly to accommodate for the flexibility. So, while in some countries we've seen sort of gig work be an opportunity to generate some form of an income, where before there was none, in other countries, indeed, some of the women who came onto the platform switched from existing jobs and actually found that there were so many benefits constraints that they were able to access in the other jobs that were less flexible so that it actually meant taking away less pay, and not necessarily more pay. So it was a very nuanced conversation, and so, for example, in South Africa, for example we did one of the market diagnostics and studies and there women felt that, indeed, it was very, very challenging to keep benefits, but in other countries where there were no benefits to start with actually being able to enter and gain some sort of skills, even if they're very specific and very limited skills was actually helpful for the transition. But I think we need to look also broaden the barriers of entering and staying successful on those platforms and I think one is financial literacy and financial assets, so, if you look at who owns a car, who has actually really sort of you know custodianship over the underlying assets what we've seen in many countries is then sort of a middle income class buys a lot of assets and then rents them to individual drivers, and so the take home pay is even less than if you own the asset so there's a lot of things at play and I think collectively, we can agree that we need to find better models of ensuring decent benefits that gig workers can accumulate, no matter where you are in the world, but it also needs to have a very nuanced and evidence-based conversation because one size does not fit all and we've seen that very clearly in the data we connected.
Rachel Vogelstein: Jewelle Bickford, the floor is yours.
Jewelle Bickford: Thank you Rachel and thank you Kweilin and it's nice to meet you Henriette. As they both know I just retired from Evercore and I’m the president of Paradigm for Parity, which is an organization that has a five point action plan to help corporations achieve both gender and racial equality. And my question to you is that you said that there are more corporations looking at inclusive behavior, but how long do you think it will take before it becomes a movement? It's so frustrating for those of us who have been involved in this for a long, long time and, can you give us a timeline? Do you think it's going to be a tipping point the way it was with LGBT or is there some hope in terms of more acceptability of what we're talking about?
Kweilin Ellingrud: Thanks for your questions, Jewelle. I'll share a few thoughts, Henriette, and please add on I think it's going to be a while right, and you can pick your favorite number, depending on the source, whether it's 100, 180 whatever it is, number of years till we reach equality, gender equality, in the C-suite. I think it's something like 95 years till we reach Black CEO equality, for example, at the kind of 1% a year rate that we're improving. So the rate of improvement is slow. Here, though, along the lines of what Henriette was describing in terms of silver linings, I think there's two main silver linings that I would point to during COVID. One is there has been an increase in the budgets and focus for not just gender diversity but racial diversity and that intersection of them. And this is true around the world. In developing countries, frankly they're starting off a lower base oftentimes, even more so than in developed countries. But across the board, we would say, the majority of companies have increased their focus on diversity, equity, and inclusion, and are spending more financial resources on that as well. Now to your point, how efficiently and effectively, quickly, can we translate those dollars and focus into real impact, that's a more challenging kind of longer term road. The other, though silver lining is I’m seeing a lot more intersectionality to this. Before many organizations would have had a gender approach to kind of address some of the pinch points in the talent pipeline for women, a separate approach or maybe kind of employee resource groups by race and now I’m seeing a much more, much higher likelihood to bring those two together, and I think that's a much more effective approach so there's some hope. But to your point, I think, without some pretty drastic action, this is going to take a pretty long time. And the organizations, if we look globally, we've done some research on which companies have actually really moved the needle. About 50% of companies don't actually improve their gender or racial diversity much at all. They're just treading water, trying to replace the very diversity that they hired in the first place. That's half of the companies. So how do you not be in the bottom half, but be in the top half? Only about 15% of companies, both were in a pretty good starting place and made a lot of improvement by gender diversity and I think it's something like a third made improvement on racial diversity. So how do you get to that top 15%, 35%? I would say really clear aspirational goals, number one, similar to Paradigm for Parity, and some of the bold goals that you set there, and then cascading accountability across every line of business, every function. And having that conversation about performance, not just, did you get the results, but did you get them in the right way and I think that's when the rubber really hits the road and it starts to hit pocketbooks. That's when we start to shorten the timeline from 100-plus years to a decade, five years, right, but we really start to accelerate that improvement. And then one last point, at least in the US, where we've seen the most improvement over the last six years that we've been doing a women in the workplace benchmarking in partnership with Lean In is just at the senior levels we've seen maybe 5% improvement across the whole talent pipeline from entry level all the way up. And then at the C suite so direct reports to the CEO and at the SVP C-level right below C-suite we've seen about 20% improvement. Keep in mind that's where one different higher of this woman, instead of this man can swing numbers by 20% right, 10 or 20% given the small numbers at least we've seen 20% improvement at that most senior level but not really across the rest of the pipeline.
Henriette Kolb: I’d be a little bit more pessimistic even than Kweilin. I think if we go one by one company could be at this for another thousand years. But I think the shift has to come from smart legislation and I’m not seeing one should regulate to death, but I think in the UK, for example, having companies having to disclose the wage gap has led to at least that level of transparency running an annual regression analysis on the wage gap between men, women. And so I think if you look at the business woman and the law report only 10 countries in the world, currently have complete clarity when it comes to legal access. The rest don't. And if we don't reform quite significantly in particular around the eight areas that affect women's work and the economy, more broadly, I think we could be individually gainfully employed for sure for very, very long period of time. So my view would be that you need to do a couple of things to meetings in one is push ahead with legal reform. And the fastest performance really come out of Sub Saharan Africa and the OECD and then really stretch it out to the other continents and make sure that you know also our clients our government clients understand why reform is helpful from a macroeconomic perspective and for growth. So that would be one and then second is look at the sort of company in a 360 degree, and I think to Kweilin’s point it's fairly you know easy or manageable where you have data to adjust for labor force gaps. At the workforce and the leadership level and even that's taking some time, but then you go one step below and you say supply chain, who are we buying from? And, frankly, the World Bank group was the first to put out sort of very publicly, we sort of dissected our own spend, which is about 1.8 billion per year. And we realize the buying frequent 4% from women-owned enterprises 3.4%. Yet that is actually a percent higher than sort of the large corporations that (inaudible), which is something fantastic work in that space. So we've doubled and said we're going to go and really duplicate and double that number that brings us to seven something percent. I mean it's still a dwindling number, but you know that financing access to finance is not enough, it needs to go hand in hand with contracting and diversifying our commerce and so that's why I think looking at e-commerce is really important, because their SEO business models have been built out. We should get swiftly and then will be much easier because data is built into onto the platforms to better understand wholesaling, what categories or profitability what's the gross merchandise value. That actually the cells are taking away and so on, so forth, and then course correct hopefully very swiftly, so I think e-commerce is really of importance in there oftentimes our clients and let him yet it's hard enough to have a functioning supply chain. Let alone, where I’m buying from, and why should I even care about the gender of the purchase or the minority or whatever, so that argument is much harder to make, and so I think we need to do a lot better in that space. One thing that I would say that I’ve seen positive movement in the private sector almost more than in the public sector is on gender based violence and creating safe workplaces and taking mental health as a key pillar to that. And we've tried to shift the conversation from just talking about sexual harassment, because then you had a conversation that was very sort of pitting men, as you know, predominant perpetrators and women is dominating victims and then of course transgender also being high victims of gender based violence, but really shifting and seeing what does it say forecasts look like integrate pulling into it and we've done some sort of analysis on wage bill losses and productivity losses of companies in the Pacific, in particular, but other regions as well to quantify what is that in lost worker days, bullying and harassment, and then put together sort of you know, an approach for the company to establish not just a safe working policy but also an entire program because we all know, if it keep it at the policy level oftentimes it's really not having the impact that they can see and we've seen that, you know, learning on HIV, AIDS policies and programs, a lot of organizations were quick to them or have policies, but if you don't have very sort of concrete programs and measure the impact it's not going to get you there.
Rachel Vogelstein: Reason to be concerned about the pace of progress, but a lot of ideas for how to accelerate it so thanks to both. I’m going to turn now to Ambassador Kelley Currie, the floor is yours.
Kelley Currie: Hi. Thank you, this has been such an enriching discussion. I wanted to pick up on some of the things that were just discussed in the last response, because one of the things that we found when I was working on this at the Office of Global Women's Issues, one of the focuses that we did, was on entrepreneurship and I haven't heard much mentioned about, I mean, maybe I missed it, but I think that that's really critical because women are able to adapt and be more flexible when they're being entrepreneurs. And we've worked on some of the low-cost solutions to this, access to finance, creating e-commerce platforms that were focused on helping women get access to market, access to credit, things like that, and I think that if you think strategically and I totally hear you about the long slog in terms of getting gender parity, it is going to be a long slog and it's going to rely on us moving from a kind of linear and geometric progression on getting women in positions of corporate leadership, etc., to getting that to be an exponential growth rate in order for the culture to really change to a point where we are able to really achieve parity. And I feel like (inaudible) efforts remain box checking exercises, even in both public and private sector enterprises, so it's really critical that we look at the whole range of options and entrepreneurship, has to be a major part of the conversation and so. I wanted to just ask about that because I am worried about solutions that focus on requiring developing countries, in particular, to make major financial investments and support systems that aren't necessarily sustainable. Beyond some kind of surge in donor support and then what happens after that evaporates and so I just wanted to raise some of those issues, thank you.
Kweilin Ellingrud: Thank you Kelley. Absolutely agree, I think entrepreneurship is a powerful lever. I think when you become an entrepreneur, and my mother was an entrepreneur for decades, I think you leave one set of challenges which you might encounter in the typical kind of Fortune 1000 workplace, which is quite unequal and you encounter a new set of challenges. So how do you get financed at the same level, how do you grow at the same rate, right? We know that if you cut entrepreneurship by gender financing access to opportunities growth, a lot of the supply chain bigger opportunities that Henriette was describing for the World Bank value chain, for example, are not done equally, and I think those are the gaps on the entrepreneurship side that we want to close because small businesses around the world are such an important engine of employment, and I would say, diverse employment and ideally an inclusive environment. But closing the gap on wealth gaps and how do you grow those businesses, at the same rate, is an important piece to make sure that the businesses that we do have are surviving and we've done some cuts on small businesses, even in the US and COVID it has disproportionately affected women-owned small businesses, minority-owned small businesses, because those were the businesses that were concentrated, number one, in services sectors that were disproportionately affected and number two had less of a cash cushion to survive what has now been a year-long either total or partial close. And that's been quite challenging. So how do we close those gaps to make sure that the engine of entrepreneurship can grow employment, grow businesses, grow GDP, at the same rate that the potential shows? Henriette, I don't know if you've got thoughts. I know, there was a connection issue but Kelley's question was, if you've got thoughts on entrepreneurship and using that to close gender, racial gaps around the world. That was the question.
Henriette Kolb: Okay, thank you so much. Even this year I don't know what happened but back online, which is great. So Kelley, thanks for the question and I think one area that we've seen is expanding quite drastically investing and so that's something, I mean, it's not where climate is, but it is growing in terms of what assets are under sort of ownership with a gender lens in there, what I think is promising and I'm hoping we will all collectively do more, and that is, in particular on the startup capital side. So, if you look at private equity and venture capital, what we've seen is that only 7% of the volume in emerging market goes to women-owned enterprises. And all of those decisions have to do with the near network effect because really you have investment decision making committees being very male-dominated. But in funds where you had at least 30% of women on the investment committed decision making committee, you had actually returns of 10 to 20% higher returns, but also the volume of 12% going to women entrepreneurs so that's still not a lot but it's almost doubled so gender diverse teams in private equity venture capital would lead to more equitable financing, at least from a gender dimension. And we're seeing early starts and fits around racial equity investing and I think it'll be interesting to see what comes out of the challenge that MacArthur foundation is running at the moment in terms of racial equity challenge and investments that follow that be very interesting to watch. And then of course we need data to really sort of hone in on who's in your portfolio in terms of who you're buying from but also who you're financing and what type of capital is accessible because currently, if we again continue to just copy paste the market, we would just replicate very much biased systems and that are excluding voices and perspectives that are not currently in the mainstream, and I think we cannot afford to do that so getting the data to actually see who is excluded. What inclusion would mean and then come out with very strong best practices and showcase them would get us closer to where we need to be but that's a great question.
Rachel Vogelstein: Thanks for that. I'm going to turn the floor to Suzanne Petroni.
Suzanne Petroni: Hi, thanks so much, really appreciate this conversation. Wanting to build off the positive focus, the silver linings, piece of the discussion, and think about this crisis as an opportunity to build back more equal. Perhaps even an opportunity to leapfrog global progress. And thinking specifically about low-income countries, what is the one specific, I’m going to use your term Kweilin, drastic action that you would recommend? For example, at the G7? So there's partnerships that are going to be forming around specific actions, what's the one thing they can do that can really, not just build back in the slow pace that we expect, but to leapfrog things? And I’ve heard some ideas, so I think I know what you might say, but I’d love to hear crystallized. Thank you.
Henriette Kolb: So mine would be care and investment in care infrastructure. I think that would be the lever that would require the change in order to get more women into the labor force, in order to get children more active and learning opportunities, because we know it as a lot of years last so early on. But also, frankly, from a sort of occupational segregation point of view, to get more men into the care economy, so we often ask how can women get more into male-dominated jobs, but I think asking the reverse questions and really trying to see how we can get more men to join the care economy would be incredibly helpful, because we of course know that diverse workforces, no matter the gender balance, are performing better and more inclusive than more a creation of sense of belonging, both for the care providers, but also, obviously, for the people who are being cared for, is an existence so to me that's the one and only issue that I would really emphasize. And I know you said one drastic action, but everyone does it and they get away with it, because nobody can stop me because we're online, so you can’t put me back down to my seat so I’ll have a second one, which is transport. Because I do feel if we're not getting a lot smarter in terms of climate engagements on transport and mobility and for travels to where and how I think we will be in very dire straits, and I think the transport patterns are so heavily male dominated we've just done some work on this in Afghanistan. In terms of cities and how women travel differently and make different choices and spend different amounts of money on safe private transportation compared to using more affordable, maybe more climate fatty public opportunities, I think that's to me, my second my smaller second one, but over to Kweilin.
Kweilin Ellingrud: Delving into something that Henriette had mentioned earlier, I would say, smart regulation and around the world, we have seen quotas significantly improve gender equality, racial equality pretty rapidly. The US is much less comfortable with quotas than other countries around the world, but I think in targeted places, smart regulation so that we can see accelerated progress on things like equality in the workplace, pay gaps, those kinds of things I think could be quite game-changing. The other would be around supply chain diversification. Cuts by gender, by race, etc., because I think that has such a strong trickle-down effect to spur the entrepreneurship and the business growth across the entire value chain. And that could be really powerful to the conversation we were just having about entrepreneurship as an engine of employment growth, etc., but diverse entrepreneurship. Thank you Suzanne for your question.
Rachel Vogelstein: I have a question to both of you to close that our conversation and build on the challenge that Suzanne just outlined, about kind of what would be most important to focus on and just recognize that here in the United States, President Biden is putting the finishing touches on his first address to Congress in his new role which will be tomorrow night. We know from the reporting that he's planning to unveil a plan to address some of the challenges you've outlined, particularly with respect to the care infrastructure here in the United States. It would be great to hear from both of you, what would you like to see the US government or other governments do to address the constellation of shifts and challenges that you've outlined and for the US to think about what the US could do not only at home, but also using its leadership on the world stage. Kweilin, why don't we start with you?
Kweilin Ellingrud: Sure, I think investing in care significantly at the federal level, at the state level, in collaboration with employers as we've talked about today, I think could be a real unlock, not just for women working at higher levels, but also for men. And a lot of the dual career couples that we have across the United States, so I think, care and treating care as a real infrastructure item is critical and a huge step in the right direction. I also think pushing more on the reskilling that we talked about will be critical, I think, doing care and other infrastructure, without reskilling at scale, education collaborations between the federal, the state, and large employers. Making education cheaper, making it more modular so it's not just a four year degree, it's not just a two year degree, it's a bit more akin to, you know, German vocational schools are more targeted, badges, for example, that we've seen started to be introduced. We've seen some employers really innovate, I think. IBM, Google, Hilton, a number of others have said getting a four year degree is no longer a requirement to work for us. We will test in a very hands-on way your skills, whether it's programming, whether it's project management, whatever it is. We will take a look at your underlying skills and I think a shift away from formal education for just formal education’s sake and getting underneath at the skills and how do we build those skills in a more flexible way, in a more digital way, now that we've gotten a head start on that I think will be critical. So, care and reskilling at scale.
Henriette Kolb: For my perspective it will be, I think, for the longest time we have siloed interventions around equality and economics and then health. And I think we need to bring those together so sexual reproductive rights, together with women's economic empowerment, together with mental health. I think that's one thing that I’ve seen you know, create the impact that we need to see in terms of the depth and, once this if we continue to sort of single out these quite linear tracks of individual sectors, I don't think we see the impact on how our changes that we need to. And to that comes political power right so to your point on quarters and signs of for them in we've seen where women are in Parliament of our globally is still you know just hovering around a quarter, but of course in countries where there are quarters, we have seen women being propelled into Parliament in making the decision that then also leads to more inclusive economies and society so there's a direct correlation between participation at the political level and then obviously what comes from it and then talking about legislation, I think then, obviously President Biden has done so much on this topic of violence against women and really making sure that governments around the world have a smart way of integrating not just the right laws into the books but really importantly in that sort of you know, broader call, to obviously train law enforcement and the judiciary to really then respond to the laws in a way that are thoughtful and the way that are really focusing on the victim and are victim-centric. I think we have a long, long way to go and to me that is an incredibly important topic, I mean you know you had reports in the past few months, I mean. From you know, Sarah in London was working home at 9pm and being murdered to you know I could count, you know so many names just in terms of my both hands. That needs to stop it needs to stop, and it needs to be appreciated that this cannot happen and that violence starts with language, and I think again looking at how we all use language is something that's important that can be integrated into our curriculums and in our workplaces. So, this would be just some of the thoughts and I know we're almost out of times so I could I could share a few more. The last point I’d say is in this time where people are maxed out and just generally a breaking point. I think being kind is something that's a very sort of (inaudible) thing to say, but I do think it's incredibly important and taking the person first and then their role. And their value, second, in the sense that you know, maybe business comes second for quite a bit and the person is what is most important to me as an employer, so I think re-centering conversations is really important to help ourselves and everyone else muddle through what is a really tricky time for everybody.
Rachel Vogelstein: Important reminder and challenge for all of us, and it is clear that a lot of work lies ahead to address the challenges of the COVID-19 economy of today and the future economy of tomorrow. But Kweilin, Henriette we are grateful to you for your leadership and for illuminating the path forward so thanks to you both for joining us today and to all of you for joining us here at CFR. Good afternoon.