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20
June 2018
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Workforce (The Total Investment & Insurance Solutions)
Three years back, the McKinsey Global
Institute (MGI) had said in a power of parity report that advancing
women’s equality can add $12 trillion to worldwide growth. A new research
from MGI now finds that India could add $770 billion to
its GDP annually in 2025, or 18% above business-as-usualGDP by
pursuing the goal of gender parity. The
Total Investment & Insurance Solutions
This is the largest relative opportunity in Asia Pacific, an economically dynamic region in the world and an engine of growth.
The largest absolute GDP opportunity is in China at $2.6 trillion, a 13% increase over business-as-usual GDP. The Total Investment & Insurance Solutions
Anu Madgavkar, MGI partner in Mumbai, said, “India is moving in the right direction on empowering women, with the fastest progress on some dimensions of any country in Asia-Pacific over the past 10 years. Now India has an opportunity to build on this foundation by focusing not only on enabling more women to rise to leadership positions in the organised sector, but also enabling women in the informal sector — many of them in rural and urban micro-enterprises and in unpaid work — to fulfil more of their economic potential.”
But here’s the caveat: About 70% of the boost to growth, MGI said, would come from raising women’s participation in the labour market. MGI has calculated a gender parity score (GPS) for all Asia-Pacific countries. The GPS uses 15 indicators of gender equality in work and three in society — essential services & enablers of economic opportunity, legal protection & political voice; and physical security & autonomy. With a GPS of 0.3 on gender equality in work, below Asia-Pacific overall (0.44) and well behind the best in the region (0.7 in Philippines), India lags the rest of Asia-Pacific in work and in society.
While there is a significant opportunity to boost growth, raising women’s labour-force participation is not an easy task. According to McKinsey India, to seize the full economic opportunity available by advancing women’s equality, India would need to raise women’s labour-force participation by 10 percentage points, adding 68 million women to the workforce. Women today form 24% of the labour force, and account for 18% of India’s GDP. The quality of participation, too, is low with 120 million women (97% of all female workers) engaged in the informal sector, often in low-paying jobs. The female-to-male participation ratio has not shown an improvement either. It fell 0.11 points between 2005 and 2012.
Nevertheless, the report said although India is not as far advanced on tackling gender inequality as the average in Asia-Pacific, it has made the fastest progress (from a low base) of any country in the region. By focusing on increasing women’s access to digital technologies and financial products, and reducing the time women spend on unpaid care work by filling gaps in essential infrastructure, India could make progress on this count.
Vivek Pandit, senior partner at McKinsey & Company, said, “Worldwide, slightly less than four women hold leadership positions for every 10 men in business and politics. In Asia-Pacific, there is only one woman in leadership positions for every four men. This is due to cultural expectations that women should prioritise childcare over their careers, unconscious bias in the workplace and a lack of role models and sponsors. It is important to introduce inclusion programmes that challenge conscious and unconscious bias in the talent management processfrom recruitment to performance evaluation.”
For the entire region, MGI said if all countries across Asia-Pacific were to match the rate of improvement of the fastest improving country in the region, $4.5 trillion could be added to the region’s GDP annually by 2025, or 12% above business-as-usual GDP. This additional GDP would be equivalent to adding an economy that is the combined size of Germany and Austria each year.The Total Investment & Insurance Solutions
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