Women's empowerment economic impact | The European House - Ambrosetti

02 September 2022

Women's empowerment may generate an economic impact equal to 14% of G20 countries plus Spain's GDP

Over the last years, the pressing issues of gender equality and Women’s Empowerment have been gaining noticeable momentum in the international public debate. Building on this widespread sentiment, in 2021 the G20 hosted the first ever Conference dedicated solely to the issue of Women’s Empowerment, to emphasize the importance that must be conveyed to the theme.

On the other hand, gender disparities continue to affect all countries, with inequalities being further exacerbated by disruptive phenomena such as the Covid-19 pandemic and the Russia-Ukraine war. For example, figures show that the increase of unpaid domestic work led four time more women than men to drop out of the workforce and 1 in 2 women reported that they or a woman they know experienced a form of violence since the pandemic.

Now more than ever, it appears clear that Women’s Empowerment is a highly transversal topic, part of a broader challenge of achieving inclusive societies that are fully capable of valuing differences. In this sense, addressing gender disparities entails a concerted and comprehensive approach that will engage a broad range of actors and supporters – regardless of their gender. 

To make a concrete contribution, The European House – Ambrosetti has decided to launch a permanent and independent Observatory on Women’s Empowerment in G20 countries plus Spain (included as a permanent guest of the G20) – in partnership with A2A, ABB, British American Tobacco (BAT), Invesco, Mondadori Group, Oracle, and Pictet Group; and with the contribution of Special Advisors Arancha González Laya (Dean, Paris School of International Affairs, Sciences Po) and Minouche Shafik (Dean, London School of Economics and Political Science).

The results of the first edition of the Observatory were presented today by Arancha González Laya during the 48th edition of The European House - Ambrosetti's Cernobbio Forum. The study highlights how achieving gender equality and advancing Women’s Empowerment is not just a matter of rights, but also a fundamental step in the path towards the achievement of sustainable development – in terms of social equality as well as economic growth and country competitiveness.

The European House – Ambrosetti analysis shows that closing the gender pay gap and having the same employment rate between men and women could generate, annually, an economic impact of up to 11.2 trillion dollars in G20 countries plus Spain – equivalent to 14% of G20 GDP. To reach the employment rate target 432.9 million more women should be employed.

Today, although several efforts have been made by many countries on the matter, a general lack of evaluation and accountability mechanisms regarding Women’s Empowerment persists across the globe. In this context, the Observatory, whose activities have been shared with the Italian and Spanish governments, aims at measuring progress in the field of female empowerment and systematizing best practices – working on the principle of accountability and the measurement of social, economic and cultural impacts.

The activities of the Observatory have resulted in:

  • The elaboration of a complex composite indicator – the Women’s Empowerment Progress Index (WEPI) – which measures, monitors and tracks the progress of G20 countries plus Spain in multiple domains of female empowerment with the goal of promoting effective policies. Given the nature and goal of the WEPI, the Index has been submitted for the audit of the Joint Research Centre (JRC) of the European Commission’s Competence Centre on Composite Indicators and Scoreboards (COIN). The audit provided by the JRC underlines the quality, trustworthiness and conceptual soundness of the framework adopted for the elaboration of the WEPI.
  • The creation of a platform to map, collect and share the main public and corporate policy best practices in the field of Women’s Empowerment. Also through the realization of an impact assessment to positively benchmark and measure the degree of effectiveness of different policies, such activities are meant to encourage consistent betterment among governments and companies.

The final results of the 2022 Women’s Empowerment Progress Index show France in first place, followed by Australia and Spain, with India, Indonesia and Saudi Arabia at the bottom – although characterized by a high level of dynamism. In this picture, Italy ranks fifth with a score of 90.9 out of 100. One of the country's strengths is the share of seats held by women in board of publicly listed companies (equal to 38.8% vs. the G20 plus Spain average of 25.0%), also thanks to the implementation of the Golfo-Mosca Law; while a low female labour force participation rate (54.7% vs. 59.3% on average) and a limited share of women in managerial positions (27.3% vs. 30.6%) represent the main critical issues. 

As one cannot care about what they do not know, measuring is an essential starting point to inspire progress and stimulate healthy competition on an international level. With full consciousness that Women’s Empowerment is a complex and multifaceted phenomenon, the WEPI attempts at providing countries with a «ready-to-use tool for improvement», while giving a gentile and positive push towards progress. 

Below are the main takeaways emerged from the work of the first edition of the Observatory on Women’s Empowerment:

  • Women’s Empowerment is not only a political issue, as it is foremost a cultural one – strictly connected to continuous cultural and social shifts and to the eradication of gender stereotypes.
  • More and better data collection in the field of female empowerment is an absolute priority, as any kind of progress must be supported by quality and comprehensive data. This is especially true regarding the phenomenon of Gender-Based Violence.
  • Women’s Empowerment is a complex socio-economic phenomenon that requires the adoption on an intersectoral perspective to implement policies capable of activating long-term social, economic and cultural shifts within society.
  • Advancing female empowerment entails the adoption of policies of collaborative nature. The business community is a valuable source of knowledge and best-practices, as corporate policies can successfully complement public policies in the field. 
  • Public and corporate policies that involve legally binding obligations and/or clear sanction mechanisms show a higher degree of effectiveness compared to others, leading to a more rapid and virtuous cycle of evolution.

Based on the evidence emerged, the Observatory collected six concrete public policy suggestions and best practices to share:

1. To define of legislated gender quotas with clear targets to reach and sanctions in place for non-compliance to advance female leadership and participation in politics (e.g., Mexico).

2. To set directions and guidelines for companies, defining specific Key Performance Indicators (KPIs) and targets and supporting companies through fiscal incentives, to increase female leadership in the corporate world (e.g., Italy).

3. To focus on childcare and parenthood, and in general on work-life balance, adopting a genderless perspective that will allow for a more equal participation in the labour market (e.g., South Korea).

4. To promote women’s financial and personal independence by breaking down stereotypes, regularizing formal access to finance, training financial skills and spreading financial knowledge (e.g., Saudi Arabia and Indonesia).

5. To increase women’s participation in the tech and digital fields by focusing on STEM disciplines to strengthen the link between education and employment, stimulating recruitment through economic incentives for companies (e.g., Germany).

6. To advance national data collection on Gender-Based Violence to assess public services response and monitor trends over time, with the goal of eradicating the phenomenon over the long-term (e.g., Spain).

The European House – Ambrosetti is thrilled to continue the precious work of the Observatory, along with its partners and the over 450 members of the Ambrosetti Club, in the hope that it will become a steady point of reference for the international community and a solid source of inspiration for improvement and progress. 

Download the Observatory's report

Learn more about the Observatory on Women's Empowerment