Why Women Are Key to Economic Growth

Melanne Verveer
Ambassador-at-Large for Global Women's Issues 
Mexico City, Mexico
August 17, 2011

It is a special pleasure for me to be back in Mexico. Our countries share a great friendship and enjoy a strong bilateral relationship - one of the deepest economic bilateral relationships in the world. I'd like especially to thank Rossana Fuentes, the editorial vice president of the Expansion Group, for inviting me to join you for this important celebration. I met Rossana at the International Women Media Foundation's forum earlier this year in Washington, D.C. I remember she came right up to me after a speech I gave and she said, “You must come to Mexico!" She described this wonderful event and insisted that I be here. Clearly, she was very persuasive in her advocacy, which probably doesn’t come as a surprise to any of you! And I also want to extend my appreciation to the Expansion Group for hosting this impressive tribute to women’s leadership. Under the vision and leadership of Manuel Rivera, lberto Bello, Adolfo Ortega, and Maria Luisa Diaz de Leon, Expansion and CNN Expansion.com have become the go-to source for business news in this country. Expansion provides executives and entrepreneurs with the information they need to grow their companies and build their careers. You also play an important role in the Mexican economy—seeking out and providing the information that is essential to an open, competitive market and a transparent and thriving economy. We all benefit from your leadership.

I want to thank the U.S. Chargé, John Feeley, who is here tonight, and the staff of the U.S. embassy, which has done so much to assist in my trip here. I’ve had a series of important meetings today – many with some of the women in business we honor, as well as more tomorrow. I also want to welcome the many women ambassadors who are here this evening. It is terrific to see so many distinguished women serving in the diplomatic corps. And I want to welcome the Treasurer of Mexico, Irene Espinosa Cantellano, and the only woman governor, Ivonne Ortega Pacheco.

Expansion’s leadership is on full display tonight as it brings us together to highlight and celebrate the many contributions Mexico’s women have made to the economy, this country, and to the broader global community. Congratulations to each of Expansion’s 50 Most Powerful Women of 2011.

It is fitting that on this visit to Mexico, I find myself in the company of remarkable women. This is what I have to come to expect in Mexico.

When I first visited your country as a young college student one summer a few decades ago, I lived with a wonderful Mexican family whose daughters were models of community service. I followed their example and worked that summer in a dispensaria in a barrio. My Spanish today isn't much better than it was then, but I still remember saying many times a day over and over in the course of my work, "una cucharita cada cuatro horas!" But, I learned an even bigger lesson for life from my Mexican sisters about making a difference. Each of you is making a difference and working toward leveling the playing field for women.

You have shattered the glass ceiling that keeps women from breaking into the higher ranks of leadership. You are pioneers and history-makers. Among you tonight are: the first woman to become a member of the Mexican Stock Exchange; the only woman to head a bank in Mexico; and many heads of top companies.

I am pleased to see that some of the world’s Fortune 500 companies are looking to Mexico’s women for leadership – from MetLife to GE, from Siemens to Walmart and more. In these challenging economic times, you have shown that Mexico’s women can be counted on for the vision, creativity, and resourcefulness that companies need to prosper in the global economy.

But even as we celebrate your accomplishments, there are still so many women around the world, who possess enormous potential to drive progress in their societies, and yet continue to be one of the world’s greatest untapped resources. They are shortchanged – and we are shortchanged. As Secretary Clinton has noted, “Until women around the world are accorded their rights and afforded opportunities to participate fully in the lives of their societies, global progress and prosperity will have its own glass ceiling.” When women progress, all of society progresses - men and women, boys and girls.

Tonight I would like to talk about a few of the reasons why women’s participation and leadership are so vital.

First, women drive economic growth. Mexico's economy, like all of the world's economies, depends upon the work of women. This includes the women who are running small and growing businesses and the women who, like you, are running some of the largest companies. It also includes the fruit sellers in the market place and the farmers in the fields. As Cecilia Ramos Avila, Mexico's first female executive director of the Inter-American Development Bank, observed: “This country survives because of the work of women, not just in the workforce but in the households.” And that could be said the world over.

Mexico is a country that understands that. You have led the way with the program Oportunidades. I was delighted to meet with the Director of the innovative program today. This initiative has created a model for other countries to provide cash assistance to female heads of household, improving their families’ health, education, and nutrition. Programs like this are only possible with leadership that understands the important role that women play – we rise or fall as one community – that we are all in this together.

Indeed, for most of us in this room, it is simply common sense that women's contributions are vital to economic growth. We know because we have lived it. But just in case, there are a plethora of significant studies to prove it. Every year, the World Economic Forum releases the Gender Gap Report, which assesses the progress that countries have made toward gender equality. It looks at the gap between men and women in a given country on four indicators: access to health, education, economic opportunity, and political empowerment. Where the gap is closest to being closed – where men and women are more equal – those countries are more prosperous and competitive. Greater progress is being made in access to health and education than in economic and political participation. The results from Mexico show the gender gap has nearly closed in both health and education, although only 46 percent of women are in the labor force compared to 84 percent of men.

In the area of education, your country has been making great strides. 58 percent of Mexico’s women of 25 years or older have received at least a secondary education, an important step at remaining competitive in today’s economy. Educating a girl is the single best development investment that can be made, with the highest rate of return in benefits to her and her future family. An extra year of education, for example, beyond the average boosts a girls' eventual wages by 10-20 percent.

You know, Mexico and the U.S. comprise two of the 21 economies in the Asia Pacific region, the region with the world's most dynamic economy. Yet a 2007 United Nations study found that the Asia-Pacific region loses over $40 billion a year in GDP because women's potential is not being tapped. That’s right – over $40 billion a year! Women simply must be an important part of the new growth paradigm if the Asia-Pacific region is to expand and spread the benefits of globalization and inclusive growth more broadly. Recognizing the importance of women's economic participation in the region, the U.S. is organizing the first APEC Women and the Economy Summit in San Francisco in September. It will include both ministerial-level government officials as well as high-level private sector participants. As Mexico has always been a leader in multilateral fora on issues ranging from climate change to human rights, we look forward to Mexico's continued leadership in ensuring that women and the economy are high on the APEC leaders’ agenda.

Studies, like those by Goldman Sachs and others, show that women-run small and growing businesses are particular accelerators of economic growth – one of the highest yield investments to grow GDP. Yet women confront significant barriers in establishing and growing their businesses. I suspect that many of you are all too familiar with what I’m talking about. Women most often lack access to finance, but also to markets, to training, to mentors, to networks, and to technology. They also frequently face discriminatory regulations, policies and practices that are deeply entrenched. In some countries, they lack property, inheritance, or land rights. Fortunately, we can do more than talk about such obstacles. Together we can do something to address them.

The United States is working to elevate this issue of women and economic growth in the G20. Last year on the margins of the G20 Summit in Korea, the U.S. partnered with prominent leaders on the G20 and Women Initiative. This year, one of the G20 working groups has taken on the issue of women's financial inclusion, to identify the barriers and opportunities to help women-owned businesses launch and grow. Mexico’s leadership as host of next year’s G20 Summit will be critical to advancing efforts to address the barriers that too many women entrepreneurs face.

One initiative that we’ve seen work in the U.S. is to identify and certify women-owned businesses, especially as larger companies move to capture the benefits of a diverse supply chain. Certification and training enable small and growing businesses to better compete for contracts, boost their productivity, and match up with corporations seeking their services. Because of these efforts, American companies run by women are leveraging billions of dollars in the global economy.

Second, promoting women is good business. Study after study has shown that fully integrating women in business at all levels has positive impacts. According to the research, companies with women on boards of directors outperform those with no female representation by 41 percent. Furthermore, women control the overwhelming majority of consumer spending. The numbers are dramatic: according to the Boston Consulting Group, women control roughly 12 trillion U.S. dollars of total consumer spending globally, and that number is only going to rise as women’s incomes expand. It is estimated that 4 out of every 5 buying decisions in the world involve women. In short, women constitute the world’s biggest emerging market. Companies with leaders who actually understand women’s experiences, perspectives, and motivations - companies which hire women to serve as executives, product designers, and marketers – those companies will have a competitive edge over those who don’t do so.

Women also comprise the majority of students graduating from undergraduate and master’s degree programs. This is a trend not just in Mexico but in many countries today. To remain competitive in the talent and knowledge-driven economy of the 21st century, companies simply can't afford to ignore the workers who have the talent and education to succeed in the workplace.

All of the studies and data are certainly helpful in making the case for women in business, but it really just comes down to this simple proposition: organizations that capitalize on the talents and experiences of women will have a competitive advantage over those who don’t. All of you here are proof of this.

Fortunately, today there are more and more businesses that get it. They recognize the importance of investing in women not just because it is the right thing to do, as important as that is, but because it is also the smart thing to do. For example, Coca Cola has launched an initiative called “5 by 20” to empower 5 million women entrepreneurs by 2020. Goldman Sachs is providing 10,000 women in the developing world with short-term business and management education programs through its “10,000 Women” program. McKinsey & Co. has developed the Centered Women Leadership curriculum to help develop women’s leadership in businesses to enable them to overcome limitations and barriers in order to better business and organizational performance. Exxon Mobil has launched a program to address the gender divide in access to technology to advance innovation. These are but a few of the growing number of large corporations that understand the importance of investing in women’s entrepreneurship.

Secretary Clinton is a strong proponent of public-private partnerships, recognizing that government, civil society, and business are all much stronger when we can work together to address our global challenges and advance progress and prosperity. At the State Department we have launched several initiatives to advance the status of women through public-private partnerships.

Tech Women is a program in which women in technology from Silicon Valley share their knowledge, skills, and experience with women in the Middle East. Fortune’s Most Powerful Businesswomen has partnered with the State Department and Vital Voices to provide leadership training, capacity building, and mentoring to emerging business women from around the world. AVON, which has made the fight against violence against women a key aspect of its business, has made grants possible through the State Department's Secretary's Fund to prevent gender-based violence in the border state of Chihuahua by educating maquiladora workers on violence, as well as their rights and choices. These companies are proving it is possible to do good – and do well at the same time.

Third, women hold the keys to creating stronger, more prosperous societies. Studies show that there is a positive correlation between investments in women and poverty alleviation and a country's general prosperity. Women spend upwards of 90 percent of their income on their families and communities – on improving the health and education of their families.

Last year marked 15 years since the 4th UN Conference on Women took place in Beijing. Working from Mexico’s UN mission in New York, a young diplomat named Patricia Espinosa – today Mexico’s Secretary for Foreign Affairs - was instrumental in negotiating the Platform for Action that 189 nations signed, including your country and mine. It continues to be a blueprint with which we measure progress for women’s rights as human rights – in access to education, health, women’s full participation in the economic and political lives of their countries, and their ability to be free from violence.

Together, we have made extraordinary progress in the years since. Today, the number of people living on less than $1.25 a day around the globe has fallen by nearly 400 million. Almost two-thirds of developing countries have met the goal of eliminating gender disparity in primary education. AIDS-related mortality has decreased greatly. Overall, more women are contributing to the economic, social, and political life of their societies.

And yet we know that our agenda and our work remain unfinished. We can be proud of what we have achieved, but we cannot yet be satisfied.

President Obama created the position I hold as the U.S. Ambassador-at-Large for Global Women's Issues because he, like Secretary Clinton, recognizes that we cannot hope to tackle the most difficult challenges that confront the world - whether they have to do with the economy, with peace and security, or with the environment - unless we ensure that women participate fully on every level of society in every nation around the world. That is why women and girls are a cornerstone of U.S. foreign policy, both in diplomacy and development.

In my position, I am privileged to meet with women around the world who are on the frontlines – addressing some of the toughest challenges. Challenges like the global epidemic of violence against women and girls. This is a serious human rights issue, a public health issue, a law enforcement issue, and an economic productivity issue. It takes a toll on women and their families and shortchanges their prospects. Putting an end to the violence in all its forms from human trafficking to femicide and domestic violence requires the efforts of all of us – men and women, government, civil society, and business. We need strong efforts to prevent violence, to protect the victims, and to prosecute the criminals who perpetrate the crimes.

Similarly women’s talents, perspectives, and life experiences are too often missing from the political sphere where critical decisions are made every day. With women holding roughly 25 percent of the seats in the Mexican Congress, Mexico plainly has much to be proud of: this represents a higher share than many of your regional neighbors – including my own country. Studies show that the greater number of women in high-level government decision-making, the lower level of corruption which takes a toll on governance and markets around the world.

Today a young girl in Mexico who aspires to a career in public service sees many role models – women like Rocio Garcia Gaytan, the Director of the National Institute of Women, with whom I met earlier today. She was instrumental in persuading all three branches of the federal government to sign a National Agreement for Equality, which makes equal opportunity and treatment of women a national priority. And Mexico has made much progress on the UN’s Gender Index. Policies and laws that women like Rocio have advocated for are having a substantial impact.

Or Marisela Morales, Mexico’s first female Attorney General. Secretary Clinton was proud to present Marisela with the International Women of Courage award earlier this year for her tireless work on behalf of citizen security, human rights, and the promotion of justice.

Each of you is a role model for young women who hope to be leaders themselves. For women like Rocio, Marisela, and all of you whom we honor tonight – you have been blessed with opportunities to flourish. But as Secretary Clinton often says, “Talent is universal but opportunity is not.” Imagine if all mothers got the health care they need to give birth to healthy babies. Imagine if women were able to procure credit to launch and grow their businesses. Imagine if teenage girls, including those from the poorest regions, were given the chance to attend secondary school.

It’s been said, "Some people see things as they are and ask why; others imagine how they could be and ask why not.” You are people who imagine how things could be and you are leading this change.

I know that each of you as women of achievement will continue to lead your companies with great distinction, but I am confident you will also raise your voices in the corridors of power on behalf of those who have no voice; to share your considerable talents and experiences with those who are aspiring to fulfill their own potential; and to ensure that your businesses are partners with government and civil society in creating a better society for all.

Congratulations and best wishes to each and every one of you. Felicidades and buenos suerte!