Women are the largest economic opportunity The most convincing business case for women comes from Silverstein and Sayre (2009), who show that women are a bigger economic opportunity than India and China combined. In 2009, women globally earned $13 trillion which is double the combined gross domestic products (GDP) of China and India ($5,6 trillion). This female income was estimated to be $18 trillion by 2014.
By Maggie Mzumara
Many institutions now recognise that women’s growing affluence and influence cannot be ignored and have identified women as the next big market opportunity as they explore different ways of capturing and capitalising on this “market segment” to take advantage of the demographics.
Women control majority of consumer spending
Not only do women earn more than India and China combined, but women also globally control at least 64% of the consumer spending (Silverstein & Sayre, 2009). Having women on boards will give corporations the competitive advantage to create products and services that will better meet their customers’ needs. In some countries, women drive over 70% of household spending decisions but have many unmet needs from financial education and advice to providing products they require at key inflexion points in their lives: caused by divorce, death of a spouse, marriage, first home purchase, birth of a first child, college commencement, first job etc (Accenture, 2006). Therefore, the opportunity to win market share and create new markets are abundant. Moreover, given these demographic trends, corporate leadership should reflect the diversity of the customer base.
Women creating their own wealth and setting up in business
According to Barclays (global) research (2013), women are creating their own wealth through earnings, savings and income from setting up business thus given rise to kitchen table tycoons. Trends suggest an increase in self-employment where women are setting up both lifestyle and fast growth companies.
Women are living longer
Demographics suggest women are living longer than men and one impact of this is that they become beneficiaries of a double inheritance from both father and husband where the cultures and laws permit. Again, the financial advisory role is important to serve the unmet needs of this demographic and provide an opportunity to service this growing segment. Women often set up and manage businesses that are survival led and necessity driven, which tend to be for the long term.
Women improve corporate performance
Women are shown to have positive effects that improve corporate performance. Catalyst (2007) compared Fortune 500 companies on the representation of women on their boards and their corporate performance. They found that when comparing the worst and best quartile of female representation, this had significant effects on the corporate performance. Return on equity increased by 53%, profit margin by 42%, and return on invested capital by 66%. They also found that a minimum of three women on the board gave the best results. McKinsey (2007) confirms this relationship. They find that companies with the highest gender diversity teams, as compared to the industry average, see a much higher return on equity (10%), a higher operating result (48%), and a stronger stock price growth (70%). In addition, having at least one woman on the board decreases bankruptcy by a full 20% (Wilson & Atlantar, 2009). Interestingly, companies with more women on their boards see better corporate governance and ethical behaviour (Franke, 1997).
Women strengthen the economy and increase next generations’ welfare
Investing in women leaders has great effects on a country’s GDP and the welfare of next generations. Booz & Co (2012) calculated the possible increase on GDP through the entrance of new female participants to the economy. For India, South Africa, and the United Kingdom, these increases would be 27%, 10% and 5% (stats specific to Zimbabwe were not available at time of going to press). Moreover, women re-invest a far greater amount of their earnings on their children’s education and health than men do, whereas men spend greater amounts on entertainment (Goldman Sachs, 2009). Thus, helping women earn their own income has a direct effect on the next generations and offers resilience.
Women are increasingly well-educated
In many countries, over 50% of graduates are women, and Zimbabwe is one such.
Sourced from: Gita Patel, Sophie Buiting — The Commonwealth Secretariat, Social Transformation Programmes Division.
l Maggie Mzumara is a media, communication & leadership strategist. She is founder of the Success in Stilettos, a platform dedicated to the development of women leadership. She is also founder and publisher of the Harare South Western News — a community newspaper founded to empower and lend a voice to under-represented communities in high and medium-density suburbs in Harare. She can be reached on email: firstname.lastname@example.org Twitter @magsmzumara