Investing in women, key to development

08 2016 September
Hermes Solano

 Efforts to close the gender gap have always been considered a social policy, but the data show that gender equality would be one of the best economic policies to develop Latin America.

The OECD, for example, points out that reducing gender gaps would increase world GDP by 12% by 2030. On the other hand, the European Commission, through a study in 2013, determined that the entry of more women into the digital market could increase its GDP in 9.000 million euros.

Harvard Business Review has noted that women spend 90% of their salary on the family,in activities such as health, education and food, among others; unlike the 35% that men invest. Giving women a greater presence in the world of work would be to support consumption in these industries, and social welfare; promoting a virtuous circle, which positively impacts the general economy of the country and the region.

On the other hand, companies have shown better economic returns when there are more women at the helm. A study published in 2011 by Catalyst highlights that The companies with more female representation in their management groups, registered rates of return on invested capital of 26% higher compared to the others.

In STEM (Science, Technology, Engineering and Mathematics) areas, for example, women-led tech companies have posted superior returns to equity,compared to their male peers: 35% higher return on investment and 12% higher on sale for venture capitalists. But, paradoxically, STEM careers are the professional areas where we find the least female participation and only 7% of investors' money goes to female tech startups (Women 2.0 & Women who Tech).

It is not just about social justice, it is the economically smart decision. The World Economic Forum has pointed out the evident correlation that exists between a smaller gender gap and greater wealth (GDP), a higher level of competitiveness and greater human development, when comparing their country indices.

Although this does not prove causality, the data are consistent with the information analyzed by IDB, World Bank and FAO, among other entities, such as consulting companies, where empowerment is highlighted as a measure to obtain better economic returns and a higher quality of life.

Yes, women were left out of history for thousands of years, of the industrial revolution and agrarian reform. In the current age of knowledge, "the true winners of the future will be neither the suppliers of cheap labor nor the owners of ordinary capital, but those who can innovate and create new products, services and business models", as stated authors Brynjolfsson, McAfee, and Spence; then, This is the ideal time for the integration of women, since competitive advantages are no longer determined by physical strength, but by creativity, innovation, and intelligence, where men and women are equally capable.

Column written by Gaudy Solórzano, Manager of the Center for Collaborative and Women's Leadership at INCAE published in Summa magazine

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