Gender equality would boost GDP
Consulting firm’s report says parity can add $ 28 trillion in 2025
Denying women full participation in the global economy is costly. McKinsey & Co. has now calculated by just how much.
Full gender equality would add 26 per cent, or $ 28 trillion US, to global gross domestic product in 2025, according to a new report by the consulting firm’s research and economics arm.
While capturing that potential may not be realistic in the short term, boosting women’s equality at the same rate as the fastest-improving nation in a region — bringing Bangladesh to the level of Singapore, for instance — would increase annual GDP by $ 12 trillion US in 2025, the study said.
“Women are such a crucial part of society and they are an undertapped resource,” said Anu Madgavkar, a McKinsey Global Institute senior fellow and a lead author of the report. A $ 28 trillion US increase in GDP roughly matches the U. S. and Chinese economies combined.
The report’s release coincides with the 20th anniversary of the UN’s declaration of a Platform of Action for women’s empowerment, which aims to ensure women achieve parity in economic, social, cultural and political decision making.
Some companies are adopting policies that others could follow in advancing equality, McKinsey said. Among them, Wal- Mart Stores Inc. has a program to use women- led companies and entrepreneurs in its supply chain, and Hennes & Mauritz has set up education programs in Bangladesh, where many of its clothes are sewn. For new mothers, Vodafone Group PLC introduced a global minimum of 16 weeks of paid leave and a returntowork period of reduced hours at full pay, even in countries where the government doesn’t require it.
Such private- sector plans to advance the status of women only succeed with clear direction from senior executives, Madgavkar said.
“You really do need to set targets flowing down from the top,” she said. “Companies that don’t have targets are not that effective. Businesses can do a lot more to drive diversity.”
The report considered 95 countries representing about 93 per cent of the population. The economies were filtered into 15 indicators of gender parity, from labour force participation to legal protections and health criteria. Overall, McKinsey found women generate just 37 per cent of world GDP even though they make up half the population.
There were huge regional variations, with India the laggard. India’s women generate just 17 per cent of the nation’s GDP, compared with 18 per cent in the Middle East and North Africa and 40 per cent or more in North America and China, according to the report.
“When it comes to both economic equality and societal inequality, India has gaps on both scores,” Madgavkar said.
One area where women and men aren’t so far apart is in access to the Internet. About 52 per cent of those lacking a connection were women, the report said. Connecting to the Internet gives women access to financial services, such as banking as well as digital education, Madgavkar said. Still, more than four billion of the world’s 7.3 billion people — male and female — lack that access.
And despite the many regional variations, there were several areas in which every nation fell short, including leaders such as the U. S., Canada, Australia and New Zealand. Sharing of unpaid work such as family care, political and legal representation, and women in leadership all scored low in gender parity across the board.