Introduction

Picture this: You’re a senior team leader, and you’re charged with winning an important project. But there’s a catch. Only half the people on your team can participate.

Would you feel comfortable with the outcome? Of course not. Yet this scenario plays out every day, in every venue, in every country in the world. United Nations statistics show that women make up about half of the world’s population. But they’re routinely denied positions of influence and leadership. Worldwide, they’re the victims of gender disparity in education, labor-force participation and career advancement.

The financial crisis jolting the world’s economies only highlights the missing voices and lacking presence of women. While many countries and businesses have made strides toward narrowing the gender gap, the vast potential of women to contribute to business and economic growth has yet to be realized. A crisis presents an opportunity for change. Now is the time in history to realize and harness the powerful and positive effect that women’s empowerment and leadership can have on the global economy.

“Women make up half of the human resources available to any country. If that half is not being channeled into the economy and not being made part of decision-making processes, then that country’s economic potential is bound to suffer. As business leaders and policy-makers seek to navigate their way through the current crisis, they need the talents of both women and men more than ever to come up with the best solutions.”

Saadia Zahidi,
Head, Women Leaders’ Programme,
World Economic Forum

Expanding women’s participation in the workforce isn’t just something that shows off a company’s commitment to diversity. It has powerful, positive and measurable results. Academics, policy-makers and business leaders assert that long-term economic growth requires the expanded participation of women in the workforce. “Greater representation of women in senior leadership positions within governments and financial institutions is vital not only to find solutions to the current economic turmoil, but to stave off such crises in future,” says Klaus Schwab, Founder and Executive Chairman of the World Economic Forum(WEF).

Since 2006, the WEF has issued annual reports based on its Global Gender Gap Index, a framework for capturing the magnitude and scope of gender disparities and tracking their progress. The index provides country rankings that allow for valid comparisons of the same variables across regions and income groups over time. Of the 128 countries covered in both 2007 and 2008, 41 show widening gender gaps. The WEF’s Global Gender Gap Report 2008, which evaluated 130 countries on such measures of gender equality as health outcomes, educational attainment, economic participation and political empowerment, found that “No country in the world has achieved gender equality. The four highest ranking countries—Norway, Finland, Sweden and Iceland—have closed a little over 80% of their gender gaps, while the lowest ranking country—Yemen—has closed only around 47% of its gender gap.”

The WEF also publishes a Global Competitiveness Index that measures the set of institutions, policies and factors that define a country’s productivity level. Examples of competitiveness benchmarks are infrastructure, labor market efficiency, higher education and training, and technological readiness. When the WEF compared its 2008 Global Gender Gap Index scores with its 2008 Global Competitiveness Index scores, and also measured the gender gap scores against GDP per capita, it found that both comparisons statistically confirmed the correlation between gender equality and the level of development of countries. “The [Global Gender Gap] Index continues to track the strong correlation between the gender gap and national competitiveness and sends a clear message to policy-makers to incorporate gender equality into their national priorities,” the WEF researchers write in the Global Gender Gap Report 2008.

According to Laura D. Tyson, a professor of business administration and economics at the University of California (Berkeley) and co-author of the WEF report, “A nation’s competitiveness depends significantly on whether and how it educates and utilizes its female talent. To maximize its competitiveness and development potential, each country should strive for gender equality—i.e., to give women the same rights, responsibilities and opportunities as men. In the current global financial and economic crisis, it is more vital than ever that women’s economic participation does not shrink, but is in fact seen as an opportunity to make headway.”

A look at what happens when women are disempowered is even more compelling evidence in favor of their inclusion in the workforce. For example, the United Nations Economic and Social Commission for Asia and the Pacific Countries reports in its 2007 annual review that restricting job opportunities for women costs the region between US$42 billion and US$46 billion a year in GDP growth. A gap of 30 to 40 percentage points between men’s and women’s workforce participation rates is common in the Asia-Pacific region. The gap in women’s education limits their participation in the workforce, causing a further loss of US$16 billion to US$30 billion to the region’s economic output.

Next section: A powerful economic force