Women Rising in Worlds 2 and 3: The Third Billion

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Working women in emerging markets are making unprecedented strides in education and income, giving them vast new opportunities as citizens, consumers, employees, and entrepreneurs. Some business and political leaders refer to these women as “the third billion” — an “emerging market” equal in numbers and potential to China or India, with up to a billion women who are willing and able to contribute to the global economy.

“Increasingly, women are making the greatest strides in the rapidly growing developing world,” observes Zina Klapper, a journalist and deputy editor of NewGeography.

Over the next decade, the empowerment of the third billion will measurably boost GDP across Worlds 2 and 3; improve health and well-being; and reshape consumer markets and business practices. For example, women’s rise is already enlarging and strengthening the middle classes of Brazil, India, Vietnam, and the Philippines.

However, these women also face daunting challenges if they are to continue to fulfill this potential. Gender bias at both the legal and cultural levels, family care issues, and a dearth of social, governmental, or financial support are among the structural issues threatening their ongoing rise. On the bright side, companies can be major players in helping women address these problems—with major returns as they enable women to become more competent, effective, and prosperous consumers, employees, and suppliers.

3 KEY FINDINGS

  • Women in Worlds 2 and 3 continue to make strides in education and income, and by some measures have surpassed their peers in World 1.
  • Women’s entry into the formal global economy has major long- term benefits for societies and companies.
  • Global companies are making strong efforts to empower women in developing markets and groom them as managers and executives.

TRENDS IN THE RISE OF WORLD 2 AND WORLD 3 WOMEN

For many women in Worlds 2 and 3, the early 2000s have been both the best of times and the worst of times. Globalization and shifting cultural attitudes have helped them make significant strides in education, business, and work—in some ways, even surpassing their counterparts in World 1. These trends are snowballing as more take advantage of the growing opportunities afforded by their governments and by global organizations that recognize their value.

But even women with advanced education and training must contend daily with legal, cultural, and financial barriers in the male-dominated business worlds of most emerging markets. According to a Booz & Co. analysis of International Labor Organization data, some 860 million women were excluded from full participation in the global workforce as of 2011, and this number is forecast to rise to 1 billion in the next decade.

Growth opportunities: Many women in the emerging world are educated and ambitious— in some cases, even moreso than those in World 1.

More are going to school. As in World 1, education is a remarkably powerful driver of women’s rise in Worlds 2 and 3— boosting wages, lowering birthrates, increasing consumer and social clout, and improving health and education even into the next generation.8 Women now outnumber men in higher education in one-third of emerging economies, including most of South America, the Russian Federation, and Southeast Asia, as well as parts of Eastern/ Central Europe and Africa.9 In Brazil, 60% of college grads are women; in the United Arab Emirates, 65%—versus 58% in the US.10 In Africa, women still severely lag men in income but are making strides in education; e.g., gender parity has been largely achieved at the primary- school level in Africa, a strong predictor of women’s later educational achievement.

More have executive aspirations. Sylvia Ann Hewlett, president of the Center for Work-Life Policy (CWLP) and co- author of Winning the War for Talent in Emerging Markets, cites a CWLP study that found that 85% of educated women in India, 92% of those in the UAE, and around 65% in Russia and China consider themselves “very ambitious” and/ or aspire to top jobs—versus some 36% of qualified women in the US.

More are managers and executives. Women in the BRIC nations are being hired for senior management at far higher rates than their peers in the US.

  • Brazil ranked fourth in female managerial representation (after Finland, Norway, and Turkey) out of 34 countries surveyed by the World Economic Forum in its 2010 Corporate Gender Gap Report. Women held 45% of managerial jobs and 30% of executive positions in Brazil, compared to 20% in the US, while some 11% of companies in Brazil had female CEOs.
  • In India, women represented 15% of senior executives and 11% of CEOs in the same survey.
  • China accounted for seven of the 14 self-made female billionaires on Forbes magazine’s 2010 list of global billionaires. Moreover, 91% of Chinese companies have women in senior leadership (the second highest percentage in the world), and 32% of senior managers in China are women, compared to 23% in the US and 19% in the UK.

Female entrepreneurship is flourishing. One upside of women’s marginalization from the formal job market is a mass turn toward entrepreneurship. (See sidebar, “Sweet Entrepreneurship.”) Women are starting businesses at a fast clip in Latin America, India, Southeast Asia, and Central and Eastern Europe.18 In fact, formal small and medium-size enterprises (SMEs) generate up to 45% of jobs and 33% of GDP in emerging economies—and women own 31–38% of these SMEs.19 Some countries in Worlds 2 and 3 have recently achieved near-gender-parity in entrepreneurship: Panama, Venezuela, Jamaica, Guatemala, Brazil, and Thailand. Only Switzerland and Singapore in World 1 enjoy this distinction.

More women are becoming political leaders. Women’s representation in parliament is a decent proxy for their legal status, many statisticians believe. Globally, the share of parliamentary seats held by women rose rapidly in the 2000s, to about 18%. Four South American nations now have women presidents, and in 29 countries—many in South America and Africa—women now compose 30% or more of federal representatives.

3 BUSINESS IMPLICATIONS

  • Global organizations that operate in emerging markets desperately need more skilled, experienced managers. Women are an under-utilized, potentially high-value source of talent. With training and encouragement, women in these areas can develop into motivated, competent employees—or business owners who can serve as suppliers for global organizations. However, tapping their full potential will take effort. Companies may get the best results if they treat the hiring of World 2 and World 3 women as a focused, medium- to long-term investment with programs specifically designed to find and groom talented recruits and provide the special support such women often require (e.g., eldercare solutions, safe short- and long-distance travel options, or cross-cultural communications training).
  • ROI is higher in countries with better human capital, Goldman Sachs has noted. As women in Worlds 2 and 3 gain education and skills, they will increasingly form “a pool of well-skilled but inexpensive female labor”—which in turn will tend to attract more investment to those areas. As Goldman Sachs points out, light manufacturing industries in Southeast Asia that relied on women’s labor were crucial to that region’s rapid growth.
  • Employers can drive change more readily than governments can, further strengthening the case for businesses to proactively work to develop female talent in their operating regions. Specific actions companies can take include:
    • Offering education and on-the-job training, especially in skills related to finance, communications, and management
    • Seeking talent at the university level, where companies can position themselves as women-supportive (e.g., in 2008 Google India launched the Women in Engineering Award to identify and encourage female students in engineering and computer science)
    • Expanding access to credit, whether through banks or company-owned credit unions, and sponsoring networking programs and events to help women find peer support and role models (e.g., in the UAE, General Electric organizes small, cross-functional groups of women employees and assigns them a coach)