Women hold the key to reviving the world’s sluggish economies and narrowing the gender gap in work could add substantially to annual growth rates in the UK over the coming decade.
New data from the McKinsey Global Institute, the business and economics research arm of consulting group McKinsey, suggest that if women participated in the British economy to the same degree as men, economic output would be 26 per cent, or £600bn a year, higher in 2025 than current estimates for that year.
More modest, and conceivably more realistic projections, point to a 6.8 per cent gain, McKinsey suggests. This would be achieved if all regions of the UK matched the pace of improvement of its fastest improving regions over the past decade. This would equate to boosting growth by 0.7 percentage points per year — around a third faster than currently projected.
“Moving towards gender equality is not only a moral and social issue,” says Vivian Hunt, managing partner at McKinsey. “It is a business issue, one that is critical to future economic growth in the UK.”
Other McKinsey analysis shows the UK to be one of the worst performing European countries for gender parity. It has a lower proportion of women employed in science, technology, engineering and mathematics (Stem) careers than anywhere else in Europe.
McKinsey is not the only one to point this out. “Three times more boys than girls take computing and 50 per cent more boys than girls study design and technology,” says Emma Codd, managing partner at Deloitte. “These early decisions drive fundamental skill differences” for those entering work. Deloitte highlights the importance of increasing women’s participation in Stem jobs to help close the gender pay gap.
Naomi Climer, president of the UK’s Institution of Engineering and Technology, says many small things need to be done in different places — from primary school through to employers. “With a concerted effort we can narrow the gap over the next decade”.
Overall employment rates of women have increased over recent decades, but they remain lower than for men. Those employed work fewer hours and are more likely to be in low-paying, low-productivity jobs.
The UK, like many other developed countries, has been struggling to tackle persistently low growth in the aftermath of the financial crisis. The UK’s productivity lags behind those of most of its peers, according to the Office for National Statistics.
Increasing women’s hours of work and participation in higher paying sectors could help boost economic growth. In general, this means moving away from less productive service work and into more productive manufacturing and energy jobs. The difficulty is how to bring about such changes.
The productivity gap between men and women widens most dramatically after women give birth. This suggests that improving policies focused on sharing responsibility for childcare or subsidising childcare provision, as well as programmes to help mothers return to work, would be a good places to start.