Financial Times Women at the Top Conference
Ambassador-at-Large for Global Women's Issues
Thank you so much for your warm words of introduction. Let me begin by offering a word of special thanks for FT’s leadership in recognizing how critical it is to support and advance the role of women as an economic growth strategy. Let me also add that it’s good to be back in Shanghai, one of the most dynamic cities in the world - a city with a long history and a bright future. It’s always exciting to visit and witness change—major change—happening right before one’s eyes.
Today you will hear from some of the most accomplished women involved in business and the economy to be found anywhere. I suspect they will confirm what you came here already knowing: women are first-rate entrepreneurs, they are first-rate executives, and they are first-rate policymakers.
It will be our job to take what we have heard and make certain that the rest of the world hears it too.
In the context of financial uncertainty, ongoing economic challenges, and worries about the creditworthiness of national governments, it’s more than time to emphasize how critical it is for women to play an increasing role in generating prosperity for our families and future generations.
There is an unsettling term that is sometimes used to describe things that lose value over time: they’re called wasting assets. I’m sure you are all familiar with this term. Cars and machinery that age and outlive their usefulness are wasting assets. Minerals extracted from the earth that cannot be extracted a second and third time are wasting assets.
Well, unfortunately, a human being can tragically become a wasting asset, too, and we are in no position to let that happen. It’s morally wrong, and it’s wrong as a matter of common sense.
What we must pledge to the world and ourselves is that the 21st century will never treat girls and women as wasting assets…because that’s what girls and women become when they are not educated, when they are kept out of the formal workforce, when they are denied merit-based promotions, when they are refused access to credit, and when they are forbidden to inherit property and much more.
And yet there are millions and millions of women around the globe 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 short changed and we are short changed. 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 – and that is certainly true in driving economic growth and ensuring shared prosperity for all nations and all people.
We need to unlock that vital source of growth that can power our economies in the decades to come. With economies under strain in every corner of the world, none of us can afford to perpetuate the barriers facing women in the workforce. Just do the math: by ensuring women’s inclusion at all levels and in all segments of our economies, more of us can contribute to the global GDP. We would have so many more brains humming, imaginations spinning, innovations developed, technical skills employed, and hands at work – from women running small and growing businesses to leading SMEs and large companies. From street vendors to farmers in the field, women’s contributions are vital to economic growth.
To achieve the economic expansion we seek will require a paradigm shift in how governments make and enforce laws and policies, how businesses invest and operate, and how people make choices in the marketplace all over the world!
The transformational nature of the undertaking that lies ahead is not unlike other momentous shifts in the economic history of our world. In the 19th century, many nations began moving from an agricultural to an industrial economy. Then the inventions and mass production techniques of that era gave rise in the 20th century to the information age and the knowledge economy, with an unprecedented rise in innovation and prosperity. Today, information transcends borders and creates opportunities for farmers to bank on mobile phones and women micro entrepreneurs in distant villages to get vital information about their market prospects on any given day.
Secretary Clinton has called this the “the participation age,” where every individual, regardless of gender or other characteristics, is welcomed as a contributing and valued member of the global marketplace.
The case for unlocking the potential of women and including them more fully in the economic life of our nations begins with recognizing how women already are driving growth.
China has been one of the world’s greatest economic success stories in recent years, averaging around 10% GDP growth over the past three decades to become the world’s second largest economy and largest exporter. Yet as the Economist has pointed out, the increase in employment of women in developed countries during the past decade has added more to global growth than China has, and that’s a lot.
In the United States, a McKinsey study found that women went from holding 37 percent of all jobs to nearly 48 percent over the past 40 years. Other studies show that women-run SMEs are particular accelerators of economic growth – one of the highest yield investments to grow GDP. Women own nearly 8 million businesses in the United States, accounting for $1.2 trillion of our GDP. According to Guardian Life’s Small Business Research Institute, future jobs growth in the US will be created primarily by women-owned small businesses and by 2018, women entrepreneurs will be creating between 5 and 5.5 million new jobs.
The productivity gains attributable to this increase in women’s overall share of the U.S. labor market accounts for approximately one-quarter of our GDP. The fact is that American women generate more than three and a half trillion dollars per year, a sum larger than the GDP of Germany and more than half the GDPs of both China and Japan.
So the promise is clear. What then is the problem? If women are already making such contributions to economic growth, why do we need a major realignment in our thinking, our markets, and our policies? The rate of progress for women in the economies of their countries varies widely. Discriminatory laws, customs, and the values that fuel them provide roadblocks to full inclusion. Women confront significant barriers in establishing and growing businesses. I suspect that some of you are all too familiar with what I’m talking about. Women have a difficult time getting access to finances, to markets, to training, mentors and networks – and to technology. In some countries, they lack property, inheritance, and law rights.
Every year, the World Economic Forum releases its Gender Gap Report. I participated in the launch of this year’s report a few weeks ago in New York. The report measures the progress that countries have made toward gender equality. It looks at the gap between men and women in a given country on 4 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 economically competitive. As the World Bank has said, gender equality is smart economics. Greater progress is being made around the world in access to health and education than in economic and political participation. In no country has the gender gap been closed.
According to a UN report, Asian women are among the most under-utilized assets in the labor market. Not tapping women’s potential short changes them and the Asia-Pacific region, which loses well over $40 billion a year in GDP. 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 inclusive growth more broadly.
We also know that women disproportionately spend more of their earned income on food, healthcare, home improvement, and schooling, which has a multiplier effect in local communities.
Let’s be clear: economic orders do not appear out of thin air. They are made and remade through countless decisions, small and large, by economic policymakers, political leaders, and business executives. So if we want to see opportunities for women improve, we must begin with sound economic policies that explicitly address the unique challenges that limit women. There are many reasons why. A Goldman Sachs report shows that a reduction in barriers to female labor force participation would increase America’s GDP by 9 percent. It would increase the Eurozone’s by 13 percent, and Japan’s by 16 percent. Unlocking the potential of women by narrowing the gender gap could lead to a 14 percent rise in per capita incomes by the year 2020 in countries as diverse as China, Russia, Indonesia, the Philippines, Vietnam, and Korea.
Of course, rising income means increased spending, which in itself helps to fuel more growth. Women constitute the world’s biggest emerging market. A Boston Consulting Group survey concludes that, globally, women will control $15 trillion in spending by the year 2014. Yet only about 3% of global Fortune 500 companies are led by women. So companies with leaders who actually understand women’s experiences, perspectives and motivation will have a competitive advantage over those who don’t do so.
In short, companies which integrate more effectively into the way businesses invest, market, and recruit will benefit in terms of profitability and corporate governance. In a McKinsey survey, a third of executives reported increased profits as a result of investments in empowering women in emerging markets. Research also demonstrates a strong correlation between higher degrees of gender diversity in the leadership ranks of business and organizational performance. The World Bank in its Women’s Development Report finds that by eliminating discrimination against female workers and managers, companies could significantly increase productivity per worker by 25 to 40 percent. And the Harvard Business Review just ran a piece that reports if a group includes more women, its collective intelligence rises. When we liberate the economic potential of women, we elevate economic performance.
Take an important sector of our economy – agriculture. We know women play an important role in driving agriculture-led growth worldwide. In some places, they are the majority of small farmers. They sustain every link in the agricultural chain.
But women farmers are up to 30 percent less productive than male farmers, and that’s not because they are working less or are less committed. It’s because women farmers have access to fewer resources. They have less fertilizer, fewer tools, poorer quality seeds, and less access to training or to land – and to decision making. The Food and Agriculture Organization data shows that when the resource gap is closed and resources are allocated equally, women and men are equally productive in agriculture.
So we have an opportunity to accelerate growth in developing economies while at the same time producing more food for our planet. According to the FAO, if we could close the resource gap holding women farmers back in developing economies, we could feed 150 million more people worldwide every year.
We must do better. This is why the US has placed a major focus on women’s economic empowerment. The US has led efforts to put the issue of women and the economy on the APEC agenda.
In September, the first ever APEC Summit on Women and the Economy took place in San Francisco. Government ministers and high-level private sector representatives from the represented economies adopted the San Francisco Declaration to overcome the four major challenges that inhibit women’s full participation in commerce – access to capital, access to markets, access to skill building and women’s leadership.
At the APEC leaders’ annual meeting which just concluded in Hawaii, the leaders addressed women’s role in the economy as one of the key cross-cutting issues to achieve inclusive, sustainable growth and pledged to monitor the implementation of the San Francisco Declaration.
We are also working to enable more women to benefit more broadly from trade agreements. For example, through Pathways to Prosperity we are connecting policymakers and private sector leaders in 15 countries across the Americas to help small business owners, small farmers, and craftspeople do more business, both locally and through regional trade. Similarly, the African Women’s Entrepreneurship Program reaches out to women that are part of African Growth and Opportunity Act countries to provide them with information and tools to take advantage of what AGOA has to offer.
We have also worked to advance women through public-private partnerships. Tech Women is a program bringing together women in technology from Silicon Valley to share their experiences and skills with women in the Middle East.
Fortune’s Most Powerful Business Women have partnered with State Department to provide leadership training, capacity building and mentoring for emerging business women from around the world.
Today more and more businesses get this. They realize that investing in women is not just the right thing to do, but the smart thing.
Goldman Sachs is training the next generation of women business leaders in developing economies with its Ten Thousand Women initiative. I was happy to attend this past Saturday’s graduation of 82 small-businesswomen in Chengdu at the South Western University of Economics and Finance with whom Goldman Sachs partnered. Coca Cola’s “Five by Twenty” campaign aims to support five million women entrepreneurs worldwide by 2020. And, Wal-Mart has announced that it will use its purchasing power to support women entrepreneurs by doubling the amount of goods it will buy from women-owned businesses globally to $20 billion by 2016.
In addition, Wal-Mart will invest $100 million to help women develop their job skills, including women who work on the farms and factories overseas that are Wal-Mart suppliers.
I know that in many ways I am preaching to the choir at this conference, but where choirs are found, you usually do find a preacher nearby, and I’m happy to play that role if I am able to help catalyze your commitment to what we’ve discussed today. The role of women in global economic life is not an abstraction—it’s a reality grounded in action. Magnificent conferences like this serve so many purposes—to share information, to network, to build alliances and explore ideas—but they also are meant as springboards to taking concrete steps…to knocking down barriers…to hiring and promoting women…to challenging old ways of thinking that in this dynamic “participation age” simply must give way.
We don’t have a life to waste, or a minute to waste. We must act. And we must act now. Thank you very much.