Booz & Company
Dr. Mounira Jamjoom
With a staggering 1 billion women around the world set to enter the global economy in the coming decade, Booz & Company provide an analytical look into this complex group’s potential and the common challenges that it faces
Dubai, UAE, 22 October 2012: If female employment rates were to match male rates in the UAE, the country’s GDP could see a boost of 12 percent; in Egypt, it would grow by 34 percent. These figures indicate the pivotal role that women in the work force can play in spurring economic growth. Yet – despite amounting to almost 1 billion worldwide and rivaling the populations of India and China – this fast-growing group of people has not received sufficient attention from key decision-makers in many countries. In light of this, management consulting firm Booz & Company have created the Third Billion Index – a ranking of 128 countries based on how effectively leaders are empowering women as economic agents.
The Index is a composite of established data on women’s economic and social status; it aims to isolate factors that facilitate women’s access into the larger economy as well as determine how additional advancements and further integration can be achieved.
The Third Billion Index ranks 12 Middle Eastern and North African countries:
|109||United Arab Emirates|
|123||Kingdom of Saudi Arabia|
SPOTLIGHT ON THE MENA REGION
Twelve countries from the Middle East and North Africa (MENA) region are featured in the inaugural Third Billion Index – and they include the UAE, the Kingdom of Saudi Arabia and Egypt. The analysis highlights these nations’ remarkable socioeconomic transitions and also serves to combat some of the popular stereotypes about their women. It also spearheads discussions about the best path forward for the region as a whole and its women in particular.
In effect, this is a region with tremendous potential that has not yet been realized. Women’s regional labor force participation is at just 26 percent, and they hold ownership positions in only 20 percent of businesses in the MENA region. Furthermore, only about 9 percent of women in this part of the world actually start businesses.
In terms of the categories of this report, the UAE, the Kingdom of Saudi Arabia and Egypt are all “at the starting gate” – which signifies that their issues pertaining to women in the workforce have yet to broach. These countries face substantially different challenges at the macroeconomic level, and the members of the Third Billion in each also face unique circumstances. Nevertheless, their governments and companies have a great opportunity to boost their own economic growth by opening new doors for women.
The Federation assumes the 109th place on the Index Score. In the past decade, the UAE’s rapid advancement on the world stage has been accompanied by a host of public declarations from government leaders about the importance of women in society and the economy. And, although workforce participation among UAE women has increased in the last ten years, these women have largely opted to work for the federal government and state governments rather than in the private sector. One exception to the public-sector employment trend is the banking sector, where Emirati women currently represent 37.5 percent of the workforce.
Today, increasing women’s workforce participation must be a joint effort between the public and private sectors. This begins at high school and university levels, with communication about the types of careers open to women, and guidance as to the skills and qualifications they will need to compete in those sectors.
After all, with high levels of education, strong personal ambitions and leadership support, Emirati women have the opportunity to advance rapidly as both workers and entrepreneurs. But laws related to maternity leave and non-flexible working hours deter their ability to efficiently pursue their careers. Changes regarding policy, infrastructure, and culture are also required. Women in the UAE need more inclusive workplaces and dedicated entrepreneurial resources to reach their full potential.
Saudi Arabia was ranked 123rd on the Third Billion Index score. Despite the nation’s multitude of cultural and legal restrictions, females constitute 57 percent of university graduates today. And, in recent years, the Saudi government’s determination to reduce its dependence on foreign workers and nationalize its workforce has led to measures to attract more women into the workplace. In July 2011, the country introduced female nationalization targets for private companies. In addition, the nation recently took steps to empower female lawyers, who could not argue cases in court prior to reforms.
The challenge is to create even more opportunities for them in the marketplace. This can be steadily resolved through a number of measures: the Saudi government can create incentives for private-sector companies to hire women and institute a high-level task force to explore their needs in the labor force. “The public sector can also effect social change by emphasizing the essential value of women’s contributions to society and the economy,” said Dr. Mounira Jamjoom, Senior Research Specialist at Booz & Company’s Ideation Center. “Companies, too, have a major role to play; they can continue women’s education with training and mentorship.”
With the combined efforts of the public sector, Ministry of Labor and companies, as well as an adequate entrepreneurial ecosystem in place, the country’s women could bring the economy to the next level.
Egypt’s overall index score placed the country in the 108th spot. If women are to play a more active economic role in Egypt, the government must craft policies to formally correct societal and legal constraints. In actuality, women’s participation in the workforce and ability to start businesses should be the most urgent items on the national agenda. And, the state needs to create jobs, grow its economy, and incite innovation to enable this.
Egypt’s government can undertake a number of steps to encourage private firm managers to employ women, such as subsidizing the cost of motherhood for a limited period of time; enforcing equal opportunity laws; and, offering better training and education schemes in partnership with the private sector to prepare women for new opportunities in growth fields such as technology. Flexible work arrangements such as telecommuting are also promising options, especially given Egypt’s advanced level of telecommunications infrastructure. Such an arrangement offers women increased access to a greater number of employment opportunities, while saving them transportation and child-care costs. Finally, Egypt’s well established NGO sector can also contribute to the economic empowerment of women by establishing connections with the private sector to foster corporate social responsibility (CSR) initiatives in this regard.
STRIKING OVERALL CONCLUSIONS
The results of the index lead to several revelations about government practices and women’s economic progress. “There is a clear correlation between the front-end processes and policies regarding women’s economic opportunities (inputs) and the actual success of women in their national economies (outputs). We discovered this by clustering the 128 countries into five broad categories based on their index rankings,” explained Dr. Karim Sabbagh, a Senior Partner with Booz & Company.
The countries with a strong set of both inputs and outputs are labeled “on the path to success”; these are typically developed economies. Moreover, the countries “taking the right steps” have implemented a slate of input policies and are just beginning to see their efforts pay off. They vary widely in other political and social dimensions and include Malaysia, Tunisia, and Venezuela. On the other hand, a small number of states also comprising China and Cambodia are “forging their own path”; they are seeing modest output results, but have not yet established a strong foundation of inputs.
The next group of countries, classified as “average,” consists of those that have taken slow steps to improve inputs to women’s economic progress and have, subsequently, seen commensurate output results. Nations such as Columbia, Serbia and Thailand belong to that realm. Lastly, there are nations that have not yet approached the problem at all; those are said to be “at the starting gate” and include most of the Arab states in the Index, as well as Indonesia, Laos, and Nigeria. This category accounts for the largest number of the 128 countries, suggesting an immense economic opportunity in many parts of the world.
The Effect on “Outcomes”
Perhaps the most significant finding from the Third Billion Index is the impact of “inputs” and “outputs” on “outcomes” – the latter which refers to broader indications of well-being, including per capita GDP, literacy rates, access to education, and infant mortality.
“The data shows a very strong correlation between index scores and beneficial outcomes. This relationship indicates that positive steps intended to empower women not only contribute to the immediate goals of mobilizing the female workforce, but also lead to broader gains for all citizens,” said Dr. Leila Hoteit, a Principal with Booz & Company.
All countries have unique requirements and must combine specific input policies to create a solution that can best address women’s needs. However, Booz & Company’s research has also found several universal challenges that women face.
“The first obstacle is the care economy,” said Dr. Sabbagh. “Around the world, women are the primary caregivers for children, the elderly, and the sick, and this burden hampers their economic development. Companies and governments should provide high-quality, accessible care for vulnerable populations.”
Enabling Women for the Future
Additionally, in every country in the world, women require investments – financial, educational, and cultural – in their future. “Allocating capital for investment in women’s businesses is fruitless if women do not have the education and training to run a business successfully, or the cultural perception that they can compete economically with men,” added Dr. Hoteit.
“Lack of credit is another common hurdle,” said Dr. Jamjoom.“Although micro financing has helped launch many women-owned businesses, these schemes also risk limiting such businesses to tiny operations in the service sector, instead of helping foster larger operations.”
More so, in all areas of women’s economic empowerment, there is a need for detailed, updated, and gender-disaggregated data – so interested parties can better understand the issues that women face and effectively frame solutions. This includes data on access to capital, property rights, and small and medium-sized enterprise (SME) ownership. Addressing these matters will require a set of solutions tailored to individual countries, with cooperation from various entities. Yet the universality of these challenges certainly shows that solutions in one part of the world will likely apply elsewhere as well, and that best practices will transcend borders.
Ultimately, the Third Billion consists of many individual women around the world – each with her own personality, needs, obstacles, hopes, and desires. Yet the global economy does not have the luxury of addressing this crucial group one woman at a time. Only sweeping institutional changes at the national, regional, and global levels can help women everywhere reach their full economic potential and make the contributions necessary to keep the global economy moving forward. These advancements will not solely benefit each woman directly, but also the community around her, the national economy she is supporting, and the world at large.
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