“If it turns out to be true that we each have our own private hell waiting for us, mine is going to be trying to explain to economists why they should think about women.” My opening for the launch of the report on Thursday at Chatham House reflected several anxiety-producing conversations I have had with traditional economists over the past year.
The persistent problem in these conversations has been the economists’ abiding skepticism about the importance of women in the world economy, even when you point them to any one of many authoritative projections (IMF, OECD, World Bank) about the potential for growth that lies in equalizing the gender gap. There are several causes behind this pervasive attitude within the dismal science, but I think the core issue is methodology: economists have based their measurement systems on the tracking of money and usually rely on households as the smallest unit of analysis. These methods tend to make women’s economic engagement invisible. Because of this invisibility (and due in no small measure to simple prejudice), economists go further to assume that any effect that women may have on economics, especially at the national or international level, must be trivial. (Esteemed economist to Linda in late 2016: “Why should the G20 worry about women? They have important things to think about.”) It thus is utterly mysterious to them why corporations should care about the economic empowerment of women.
I wrote this report to summarize and synthesize the Coalition’s considerable experience with women’s economic empowerment. I am hopeful it will help convince other companies to join this movement, but that it will also help other types of organizations understand what a resource businesses can be (well beyond just writing a check), as well as to be a little more informed about how corporations work in this space. Click here for the report.
So, I took the occasion of launching the “Lessons Learned from Years of Practice” report to illustrate the way women’s invisibility in economic data leads us to overlook their importance to the operation of the world economy. It made particular sense for me to do this because of a central lesson gleaned from the conversations among the Global Business Coalition for Women’s Economic Empowerment, which form the basis for the findings of the research report.
The GBC4WEE (which I will take the liberty of calling “the Coalition” here) agreed that a corporation’s first step into the work of women’s economic empowerment should always be “making the women visible.” They have learned the common assumption that women are neither present nor important in a particular business or sector is an erroneous one. A corporate team therefore begins by making the conscious effort to find them–and they nearly always learn that (1) women are present in their business, (2) they are important, and (3) something nearly always can be done that both helps the women and benefits the business.
I began by creating what I called “a patch of visibility” for the audience. That is, I illuminated the economic conditions for women within a single sector and then showed
how their systemic disadvantages hurts the local economy and makes them painfully vulnerable
how that same disadvantage sums up to a significant influence on national economies
why the corporations operate the way they do when they design programs to address the disadvantages
why the corporations care about women for both social and business reasons and
why economists should, too.
I began with agriculture because most of the world’s economies, in the past or present, have been built on farming—and that industry continues to affect all of us to a profound degree. The starting point is the place of female landholders in the industry. The Food and Agriculture Organization Gender and Land Rights Database has only made this information available in the past few years. A sample of 106 countries shows that women are 18.3% of the world’s landholders. Because men tend to own more land, that means males control 80%+ of the world’s arable surface. This is a hugely important fact, but one that we have only recently had decent data to show.
FAO goes on to explain that the comparative land poverty of women means that they are considerably less able to buy capital equipment (from plows/oxen to tractors) and capital inputs (fertilizer, pesticides). They are also far less likely to learn new techniques, because agriculture agents are prone to assume women haven’t means to act on innovations—and anyway think what is taught to men will trickle down to women (it doesn’t).
As a consequence, women produce lower yields and are more likely to lose land when there is blight or bad weather—they don’t have as big a cushion to absorb risks that men do. (Now I am talking about men versus women as a large group here. Obviously, not all men have better situations, but, as a group, they do.)
FAO emphasizes that when the resource constraints are made equal, women have proven to produce as much as the men. Equalizing resources therefore would increase women’s output by 12 to 13%. And since most of the developing nations are agricultural societies, closing this particular gender gap would increase their output by 3% to 4%. Nothing to sniff at.
Source: Food and Agriculture Organization Gender and Land Rights Database. Notice here that men control an extraordinary amount of the world’s land. This difference is due to centuries of law and practice, pretty much everywhere, that only allows land to pass from male to male. The Downton Abbey principle. Since land has been the world’s main store of wealth, just think about what this has meant for male control of capital as the world shifted from agriculture to industry.
Further, this agricultural gender gap unnecessarily reduces the world food supply. The knock-on effect is to increase food insecurity, which then stimulates conflict. And the human rights impact is significant: the United Nations says that 150 million of the world’s chronically hungry could be fed if all we did was to equalize the gender gap in agriculture.
Yeah. It’s big. And it’s getting worse: as men migrate to cities for better-paying jobs, more and more farm work is done by women. To the degree that they continue to have less access to inputs and technology, the world’s food supply will eventually be reduced. Already, the world supply of some crops is in jeopardy. (On the “endangered list”? Chocolate and coffee. OMG. You should care. So should economists.)
Now think about it. Big grocery retailers, like Walmart and Marks & Spencer, sell a lot of chocolate and coffee. They need a stable and high quality supply of produce. Big food and beverage manufacturers similarly need a stable and high quality supply of the produce that makes the ingredients for their products. Coca-Cola needs fruit for juices. Mondelēz International (the new name for Cadbury’s/Kraft/Nabisco) needs cocoa for chocolate. So, if you want to protect Double-Stuf Oreos and your crucial cup of morning Joe, you need to be paying attention here.
Please note: Coca-Cola, Walmart, Mondelēz, and Marks & Spencer, are all members of the Coalition. The report details their programs for helping women and thereby protecting these supplies.
One thing they have found is that women often are more active than men in the planting, cultivation, harvesting, sorting, processing, and packaging of produce for market. But it’s the men who actually take the food to market and they usually pocket the money they get. They often work though agricultural boards and coops that do not allow women. This means that women are effectively shut out of volume markets. It also means that if you are only counting the transfer of money, you are going to think that the men are the economic force—even though the women did most of the work to bring the crop to market. Yet again, the women’s contribution has vaporized under the narrow lens of traditional economics.
But even more females are hiding in the shadows. Women, because they are seldom land-owners and often lose what land they have, are usually laborers on farms. FAO estimates they do at least 47% of the world’s farm work–probably more, because they are often unpaid family workers and do not report themselves as farm laborers. Women who work on farms are often not paid directly (the man of the house gets the money or a male labor broker does). Even when they do get paid, they are very often required to turn the money over to the male head of household (husbands, fathers). The upshot: if you are measuring only money and only at the household level, you once again do not see the women. Yet they are at least half the agricultural labor force. Half. Please explain to me why this fact is trivial.
Another worrisome problem lurks here. When women own nothing and cannot control any income, they become utterly dependent on men. Try to imagine how dependent on others and vulnerable you would be if you really had no access to money. The very thought is terrifying, right? Unfortunately, this particular vulnerability too often means women are victims of domestic abuse situations they cannot leave. The most recent estimates say that domestic violence costs nations between 1% and 2% of GDP.
Women try to hide whatever money they have—in a chink in the wall or under the bed—but if it is found, the cash is often taken away from them. Studies show, however, that if women can earn money and keep control of it, they will inevitably spend it on education, nutrition, and medical care for their children. The long-term effect on productivity, as well as the costs associated with poor health, is massive.
You can perhaps see why there is a concerted effort, internationally, to get women bank accounts. But laws have often forbidden women from getting accounts without the permission, presence, and often the signature, of their husbands. They usually cannot get credit in their own names. Even where laws have been changed, banks often still customarily require a man to support a woman owning a bank account. Not only that, many women around the world are forbidden from leaving their homes without the permission of their husbands. (I mean, really, lots of them. It’s truly shocking.) So, they can’t get to a bank. Full stop. And get this: women very often do not have sufficient identity documentation to open a bank account. Not even a birth certificate. (I wish I had a dollar for every rural woman I have met who does not know how old she is.)
Step back and assemble a holistic picture in your mind. This situation requires reform at the system, as well as the individual, level. But the points of action are shot right through the system and, because there can be resistance to the notion that women should be equal in the financial domain, reform can produce risk of unintended consequences. Thus, interventions must come in from multiple directions, they must be surgical in precision, and they must be exhaustively tested before being carefully and deliberately scaled up. This is why you get some companies working on new international credit sources for women (Goldman Sachs), some working on mobile banking solutions (ExxonMobil, Qualcomm), and some working on identification (Mastercard and Marks & Spencer). In some cases, these companies are benefiting their own businesses in various ways when they do this work (Mastercard, Qualcomm, Marks & Spencer) and in some cases the work is done philanthropically (Goldman Sachs and ExxonMobil).
Goldman Sachs, Exxon, Qualcomm, and Mastercard are all members of the Coalition.
The same banking barriers apply to women entrepreneurs. Entrepreneurship is important to growth because it builds the business base. On the ground, however, it is often the only way women can earn outside farm labor and it also helps smooth the impact of agricultural seasonality on rural households. It is even more essential for women entrepreneurs to have both bank accounts and small business credit. But female entrepreneurs in developing countries are underserved by banks to the tune of $285 billion. A report by Goldman Sachs and the International Finance Corporation estimates that closing the gender gap in small business credit would increase developing country GDP significantly and also increase household incomes by 12%. Every member of the Coalition is involved in some way in the push to support female entrepreneurs.
But it is remarkable the degree to which female entrepreneurs are invisible. Government registries very seldom note whether a business is owned by a male or female. Banks do not sex-disaggregate their data, largely because they don’t think it is worth it, so they do not even know whether they have women in their customer base, nor whether the terms with which women are treated are equal. (Nor do they have any actual data to support the widespread prejudice that women are higher risk customers.) Thus, everything we know now about women entrepreneurs has been assembled, gradually, over the last ten years. There are still many black holes in the available data. But one thing is quite clear: women face barriers in entrepreneurship that men simply do not face. And that matters for national growth, as well as for local economic prosperity and stability. Several members of the Coalition, including ExxonMobil and PwC, as well as Goldman Sachs, are producers of the very reports we now rely on to understand not only the situation of women in the economy, but what works to help them.
Source: FAO Gender and Land Rights. Notice these are developed nations. The average female landownership among them is 16%–less than the global average.
You can begin to see from this little “patch of visibility” why there would be significant growth potential, coming from several different sources, if the gender gap in economics were closed. It is not hard to understand it, once you have some data and take the trouble to look. Please have faith in me that I could have done a similar exercise for other industries, as well as the advanced nations. It’s a global phenomenon.
I really think it is important to get this word out. I know the Chatham House Gender and Growth Initiative is focused directly on convincing top level national economists and finance ministers to invest in women for the purposes of growth. It is a worthy initiative that those working in this movement should enthusiastically support.
Please notice, however, that most of what I have just outlined takes place in the domain of the private sector: credit, bank accounts, fixed asset purchase, property ownership, and so on. There is no way to make a lasting impact on these points of contact without involving business. Of course, none of these programs can be done by the companies acting alone. In each and every case, the Coalition members work in partnership with governments, international agencies, and NGOs. And the members strongly agree that future efforts must remain cross-sectoral.
My report, however, makes the case for a different kind of role for business within the movement to empower women economically. This is one in which gender equality can be made sustainable by building it into the systems of business, rather than being content with one-off patches that are tested but never scaled. There is an opportunity here to make change worldwide and permanent, if we can work more effectively with the private sector.
The speech (youtube version shared below) gives more arguments than I had space to express in this already-too-long blog. The report details, in particular, the Coalition programs, their impact, and the reasons why they undertake this work.
Much of the data in the blog, the speech, and the report, however, was first put together as I prepared for the book I am writing, called The Double X Economy, which is under contract to Faber & Faber, with translation rights currently being sold around the world.
I perhaps should also explain that the formation of the Global Business Coalition for Women’s Economic Empowerment, as well as the report I am writing about here, occurred under the auspices of a research grant through the University of Oxford. However, going forward, I will be continuing the work associated with the GBC4WEE under the auspices of Chatham House, where I am now a senior consulting fellow, and its Gender and Growth Initiative.
