The power of parity: Advancing women’s equality in Asia Pacific

The power of parity: Advancing women’s equality in Asia Pacific

Advancing women’s equality in the countries of Asia Pacific could add $4.5 trillion to their collective annual GDP in 2025, a 12 percent increase over the business-as-usual trajectory.

Asia Pacific is today arguably the most dynamic region in the world, a global engine of growth driven by productivity, investment, technology, and innovation. Women can help—and are helping—to power this engine, making vital contributions to sustaining and enhancing Asia’s growth and lifting more people out of poverty. Yet gaps remain large in many countries in the region on gender equality both in work and in society. From an economic perspective, trying to grow without enabling the full potential of women is like fighting with one hand tied behind one’s back.

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Five potential areas to prioritize to improve gender parity in Asia Pacific
There has been progress towards gender parity Asia Pacific overall. But there is still much more to do. Now is the time to redouble efforts.

Advancing women’s equality in the countries of Asia Pacific could add $4.5 trillion to their collective GDP annually in 2025, a 12 percent increase over a business-as-usual GDP trajectory. This additional GDP would be equivalent to adding an economy the combined size of Germany and Austria each year.

  1. All countries in Asia Pacific could boost growth by advancing women’s equality.
  2. There is no one Asia Pacific journey toward gender equality.
  3. Women are heavily underrepresented in leadership positions.
  4. Policy makers, companies, and nongovernmental organizations can consider prioritizing measures in five key areas.
 

All countries in Asia Pacific could boost growth by advancing women’s equality

All countries in Asia Pacific would benefit from advancing women’s equality. In a best-in-region scenario in which each country matches the rate of progress of the fastest-improving country in its region, the largest absolute GDP opportunity is in China, at $2.6 trillion, a 13 percent increase over business-as-usual GDP. The largest relative GDP opportunity is in India, which could achieve an 18 percent increase over business-as-usual GDP, or $770 billion (Exhibit 1).

In a best-in-region scenario, Asia Pacific could add $4.5 trillion to annual GDP in 2025, or 12 percent above business as usual.

To achieve this significant boost to growth will require the region to tackle three economic levers: increase women’s labor-force participation rate, increase the number of paid hours women work (part-time versus full-time mix of jobs), and raise women’s productivity relative to men’s by adding more women to higher-productivity sectors. Of the total $4.5 trillion GDP opportunity, 58 percent would come from raising the female-to-male labor-force participation ratio, in line with the global average contribution. A further 17 percent of the GDP opportunity would come from increasing the number of paid hours women work, and the remaining 25 percent from more women working in higher-productivity sectors.

McKinsey Global Institute’s calculation is a supply-side estimate of the size of the additional GDP available from closing the gender gap in employment. We acknowledge that the supply-side approach needs to be accompanied by demand-side policies that could influence the ability to create jobs to absorb additional female workers and require investment. In addition, education and vocational training systems will need to keep pace with rapid technological changes that are altering the nature of work and creating new types of jobs.

 
Section 2

There is no one Asia Pacific journey toward gender equality

In its 2015 original “power of parity” report, MGI established a strong link between gender equality in work and in society—the former is not achievable without the latter. MGI’s Gender Parity Score (GPS) uses 15 indicators of gender equality in work and society to measure the distance each country has traveled toward parity, which is set at 1.00. Overall, Asia Pacific has a GPS of 0.56, slightly below the global average of 0.61—both high levels of gender inequality (Exhibit 2).

Gender inequality is high overall in Asia Pacific, with significant variations among countries.

The research examines Asia Pacific as a whole with a particular focus on seven countries: Australia, China, India, Indonesia, Japan, the Philippines, and Singapore. On gender equality in work, the Philippines stands out for its progress, followed by New Zealand and Singapore. The six countries furthest from gender parity in work are Bangladesh, India, Japan, Nepal, Pakistan, and South Korea. China does well on female labor-force participation but can improve its share of women in leadership—as can most countries in Asia. Gender inequality also remains high across the region in the sharing of unpaid care work.

On gender equality in society, Australia, New Zealand, the Philippines, and Singapore are ahead of most in the region on essential services such as education, maternal and reproductive health, financial and digital inclusion, and legal protection and political voice; countries like Bangladesh, India, Nepal, and Pakistan still have a considerable distance to travel. Achieving gender parity in digital and financial inclusion is a large opportunity in many South Asian and Southeast Asian countries. Physical security and autonomy remains a concern in many parts of the region—and globally.

Asia Pacific nations have made progress in the past decade, driven by a combination of economic development, government measures, technological change, market forces, and activism. Maternal mortality and gender gaps in education have declined in countries including Bangladesh, Cambodia, India, and Nepal. Many countries have increased women’s labor-force participation, but participation has fallen in Bangladesh, India, and Sri Lanka, a trend that may be linked to rising household income.

 
Section 3

Women are heavily underrepresented in leadership positions

Women’s relatively low representation in leadership positions—measured using the female-to-male ratio—is a global issue. Worldwide, slightly less than four women hold leadership positions for every ten men in business and politics. In Asia Pacific, there is only one woman in leadership positions for every four men. In some countries in East Asia, there are only 12 to 20 women leaders for every 100 men. This is a waste of talent that the region can ill afford, especially when many economies are aging, labor pools are eroding, and skills shortages are on the rise (Exhibit 3).

Bottlenecks in the talent pipeline vary among countries.

Most countries in Asia Pacific have female-to-male ratios of less than 0.5. Even in Australia, New Zealand, and Singapore, three of the region’s more advanced economies, the gender imbalance is notable. The Philippines, a traditionally matriarchal society whose government has been proactive in narrowing gender gaps, is the country in the world nearest to gender parity. However, even there, only 15 percent of board members are women.

There has been progress in recent years. On average in the region, women’s representation on boards increased from 6 percent in 2011 to 13 percent in 2016 (Exhibit 4). This appears partly to reflect regulations and corporate policies instituted during this period. For instance, India has made it mandatory for companies to have at least one female director, and the Australian Securities Exchange Corporate Governance Council tracks gender diversity in its constituent companies. However, women’s representation on boards in Asia Pacific is still low compared with the average share in advanced economies of 28 percent.

Women’s representation in leadership has improved.

The smaller share of women in company leadership isn’t all about the glass ceiling. The relative lack of women in the top positions in business has its roots far earlier in the talent pipeline that runs from enrollment in tertiary education to entry-level positions, middle management, and the boardroom. In the seven countries we highlight in this research, the share of women erodes the further they are along this pipeline, with different patterns and bottlenecks among countries.

A McKinsey survey found that by far the largest barrier to women moving into senior roles cited by executives—45 percent—was the “anytime, anywhere” performance model. The second biggest—cited by 32 percent of respondents—was the “double burden” of women holding down a job while looking after their families, particularly in societies where women are still expected to take sole responsibility for family and household duties. Third was an absence of female role models, followed by a lack of pro-family public policies and support, including childcare; 30 percent of respondents cited the latter factor.

 
Section 4

Policy makers, companies, and nongovernmental organizations can consider prioritizing measures in five key areas

Mapping the road ahead, policy makers, companies, and nongovernmental organizations could consider prioritizing action in five areas. Each of them applies across the region to differing degrees. Some aspects, namely female labor-market participation, are crucial for securing the potential economic benefits identified in most countries. Others, including the role that digital technologies can play, offer an opportunity to raise economic participation and earning while potentially improving gender equality in society. The imperative to shift societal attitudes toward women’s role in society and work appears in virtually all countries and can enable—or hold back—progress on all other aspects of gender inequality. Some approaches are more suitable for the formal economy, others for the informal economy. Broadly, measures need to be tailored to the cultural and economic context of each country, based on decision makers’ judgment—and experience—of what will be most effective. In the research, MGI has explored specific priorities for each of the seven countries highlighted. The following five key areas for action have relevance to all countries in the region:

  • Focus on higher female labor-force participation, with steps to address unpaid care work as a priority to boost economic growth. Enabling women to juggle their home and work responsibilities—an issue in advanced and developing economies alike—would help women who choose to work for pay outside the home to do so. The emphasis of such efforts should be to open the way for women not only to work, but to work in quality jobs. Women undertake four times the amount of unpaid work as men, and this hinders their freedom to choose to work for pay outside the home. To free more women up to work for pay requires, for instance, expanding affordable childcare, improving household and transport infrastructure, deploying digital technologies, and sharing unpaid work more equally between men and women through, for instance, policies promoting parental leave and flexible working.
  • Address the pressing regional and global issue of women’s underrepresentation in business-leadership positions. Most countries have similar barriers to women rising to leadership roles in business, namely cultural expectations that women should prioritize childcare over their careers, a lack of suitable or affordable childcare, unconscious bias in the workplace, a lack of role models and sponsors, and, perhaps critically, a failure by many companies to offer flexible working options. The fact that the barriers are similar suggests that measures that have proved successful in raising the share of women in leadership in individual companies could be the template for businesses in the region. Governments can influence the talent pipeline through education and training, legislation, fiscal measures, and political leadership. They can also improve diversity in public services in their capacity as employers. Companies need to embed gender diversity into their operations from top to bottom, with clear managerial commitment to equality in the workplace, processes to back up that standard, the provision of flexible working to ensure that employees can achieve work–life balance, and programs that explicitly provide mentorship, skills building, and networking for women.
  • Capture the economic and social benefits of improving access to digital technology. Access to technology can open many economic doors to women. The rise of e-commerce and the online “gig economy” offer many women flexibility in terms of their working hours and where they work, helping them to balance work with their family commitments. There is widespread evidence that digital technologies connect women with larger markets far more effectively than if they are offline. Digital banking levels the playing field between men and women in terms of access to financial services, and it enables financial institutions to serve more customers profitably. Digital technologies can also encourage higher labor-force participation by women. They can reduce the hours women spend on unpaid work. For example, if women have access to digital payments, they can save an enormous amount of time spent travelling to a physical bank or ATM and waiting in line. The adoption by many businesses of telecommuting also makes it easier for women to remain in the workforce if they so choose. Powerful attitudes inhibiting women from accessing the Internet need to be tackled.
  • Shift attitudes about women’s role in society and work in order to underpin progress on all aspects of gender inequality. In many countries, societal attitudes hold women back. Attitudes regarding women’s role as family caregivers are key reasons that women undertake a disproportionate amount of unpaid care work, choose to step out of the workforce, and face conscious and unconscious discrimination in the workplace. Selecting and equipping male champions to lead cultural change within organizations can be an effective way to address the attitudes underlying this bias, as can public-information campaigns. Governments, companies, the media, and individuals in every community can help to change attitudes toward women by using cutting-edge and innovative approaches.
  • Collaborate on regional solutions as powerful catalysts for gender equality. Programs and policies will largely be developed in each country with an eye to its particular context, pockets of high inequality, areas of strength, and cultural norms. But pan-Asia Pacific policies could give national efforts a powerful following wind, enabling change. Two forms of pan-Asian intervention could prove particularly effective, and regional and global bodies might consider exploring their feasibility: improving the financing of initiatives designed to tackle gender inequality including gender-lens investing and development impact bonds, and greater regional knowledge sharing.

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