I recently attended a meeting of investors, asset managers, foundations, family offices, and social entrepreneurs organised in New York by the Financial Times to explore “gender lens investing,” that is, investing in women and girls to boost overall development impact alongside a financial return. The discussions focused on this new niche as the next big thing in impact investing.
There is a growing body of evidence suggesting that empowering women is critical to boosting global prosperity. For example, new research published in the Stanford Social Innovation Review suggests that if women were to attain equal participation in the economy, they could raise global GDP by up to $28 trillion or 26 per cent in 2025.
McKinsey and Co. estimates that advancing women’s equality in Asia-Pacific countries would raise their annual collective GDP by $4.5 trillion in 2025, a 12 per cent increase over the business-as-usual trajectory. Investing in women yields multiple benefits for corporations, according to an International Finance Corporation (IFC) study.
At the International Monetary Fund (IMF), a staff discussion note has made the case that women bring new skills to the workplace. This may reflect social norms and their impact on upbringing, social interactions, as well as differences in risk preference and response to incentives.
The note’s authors argue that there is a clear economic benefit from gender labor inclusion—that is, from bringing more women into the labor force—over and above the benefit resulting from simply adding more workers regardless of whether they are male or female.