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CIO Wealth Management Research a b October 2016 Women as a force for economic change Contents Foreword ........................................................................................ 3 Publication details This report has been prepared by UBS. Introduction ................................................................................... 4 Please see important disclaimer and disclosures at the end of the document. Chapter 1 Editor in Chief Carl Berrisford Persistence of the gender gap ........................... 6 Authors Interview with Hana Dang Carl Berrisford Min Lan Tan Cultural attitudes, education opportunities & Soledad Lopez career challenges .......................................................................... 8 Chisa Kobayashi Desktop Publishing Chapter 2 Margrit Oppliger Werner Kuonen The glass ceiling ............................................................... 11 Project Management Nicole Lee Chapter 3 Cover photo Towards a solution – understanding iStock what matters ...................................................................... 15 Languages English, Chinese (traditional and Interview with Yukari Inoue simplified) and Japanese Addressing traditions, identifying policy challenges, need for empowerment .............................................................. 16 Contact [email protected] Interview with the Baroness Ruby McGregor-Smith, CBE Maternity challenges, building aspirations, role models .................................................................................... 20 Interview with Essie Weingarten Entrepreneurship, leadership priorities, mentorship .............. 24 Disclaimer ....................................................................................... 26 2 October 2016 Women as a force for economic change Foreword Tom Naratil Dear Reader, Today, as investors, policymakers and business underlying structural challenges that have long owners hunt for new sources of sustainable left women on the economic sidelines and sug- growth, the economic potential of women gest a number of pathways that are critical to remains glaringly untapped. Across the academic moving forward. We also highlight a number of and corporate arenas, a significant gender gap global governmental and corporate policies that continues to create a substantial drag on the have been implemented with varying degrees of global economy. And while there’s a broadly success. Finally, we show that while the contin- shared acknowledgment of the opportunity, deci- ued economic exclusion of women is afforded sive action to close this gap has yet to materialize. even greater urgency given the current macro cli- mate and the unfavorable demographic trends in This publication – the first in a series of UBS reports many countries, debates about the best ways to that will focus on the role of women in today’s glo- tackle this pressing topic point toward specific balized world – spotlights the upside opportunity solutions. that greater access to and inclusion in the global economic mainstream would mean for women, and For UBS, a firm that is present in all of the world’s for broader society. According to research, if largest and fastest growing markets, this is an women were paid and participated in the labor issue of profound importance. We take seriously market in line with best-in-region levels, they would the responsibility we have to our clients, employ- add USD 12 trillion to the global economy within a ees, shareholders and communities to help iden- decade – an 11% jump in global GDP. There is also tify ways to unlock growth and to foster more considerable evidence that greater gender balance, widely felt prosperity. This report affirms our belief in particular within corporate boards and executive that when high-potential individuals have the teams, is associated with better financial results. Yet opportunity to leverage their unique skills and systemic and cultural barriers have made parity frus- contribute diverse perspectives, the outcomes can tratingly elusive so far. be powerful. However, there are reasons to be optimistic. In Thank you for taking the time to read this report the following pages, we identify some of the and for your interest in this important topic. Tom Naratil President Wealth Management Americas and President Americas Women as a force for economic change October 2016 3 Introduction Carl Berrisford Min Lan Tan “ We’ve all come to recognize – prime ministers, presidents, heads of companies – if we want this increase…in GDP, you have to get the other half working and participating in the economy.” — Melinda Gates, American businesswoman and philanthropist As the world grapples with a sluggish economy, the Sluggish economic climate demands urgent need to embrace change and innovate becomes a action to close gender gap. To revive the sput- necessity. But finding new sources of growth isn’t tering global economy, closing the gender gap, easy especially in the face of structural challenges, particularly in the workplace and boardroom, is not least of which are an ageing workforce and mission critical. Structural challenges in global eco- falling fertility rates. nomic and demographic trends, including declining labor participation and falling fertility rates, are It may not be obvious to many but one force forcing workforce gender issues to be addressed for economic change that could add trillions to systematically and with a sense of urgency. Accord- global GDP may just be among us – women. ing to the McKinsey Global Institute, matching female to male participation rates at best-in-region In “Women as a force for economic change”, we levels could boost global GDP by USD 12 trillion or take a closer look at how a better gender balance by 11% within a decade. This has raised awareness can significantly impact economic growth, the of the enormous opportunity that “women as a enduring persistence of the gender gap, the reali- force for economic change” can offer in a challeng- ties of the glass ceiling, and the key issues that gov- ing phase of global economic growth. ernments, corporations and individuals should con- sider as we work towards a solution. Persistence of the gender gap. We have come a long way since the United Nations started promot- We also interview four leading businesswomen ing gender equality and empowering women as a from across the globe – Vietnam, Japan, the UK millennium goal a decade and a half ago. But the and the US – who provide insights on the many progress follows a state of severe imbalance and is challenges and learnings about working women in still relatively slow even in so called developed or their region. mature economies. According to the OECD, only 50% of the world’s women are gainfully employed, We are excited to share with you our perspectives much less than the 75% for men. And women still on the topic of gender diversity as we walk you earn on average 24% less than the men globally. through our very first “Women as a force foreco - Women also remain under-represented in many nomic change” publication. sectors such as science-related research and 4 October 2016 Women as a force for economic change Introduction technology, causing an employment segregation Governments and corporations key gap. Yet, above all, the issue of the gender gap is to narrowing the gender gap. For govern- a complex one to tackle and the reasons for its ments, the optimal policy mix may extend to persistence vary around the world – and are not the spheres of education, family planning, and fis- peculiar to any culture, region or level of eco- cal and labor policy measures, and must be nomic development. designed to address the specific needs of each country – whether developed or developing. Aspi- Maternity and domestic burden are common rational gender quotas have emerged as a prac- challenges among women. In spite of the com- tice in some countries and appear to have plex and varied reasons behind gender inequality, achieved results, raising female leadership in poli- we find one denominator common across cultures tics and the corporate world. Other effective gen- and regions – that of maternity and the issue of der policies may require dedicated action towards domestic burden. This is a key consideration for women as a sustainable feature of corporate women to either abstain from the workforce behavior, including equal pay structures, a strong entirely or only seek part-time work, and the pipeline of talent in both middle and senior man- extent to which labor policies and corporate prac- agement, stronger family support policies, and tices support or discourage maternal employment mentoring and sponsorship programs to support is also of notable importance. Best-in-practice the promotion of women. policies suggest that paid parental leave rather than maternal leave can contribute to improving Lasting solutions require costs, trade-offs women participation rates in the economy. and shift in mindset.There is no one-size-fits- Similarly, ready access to subsidized and quality all prescription for addressing the gender gap, but child care plays a major role in encouraging acknowledging the persistence of the gap and its women to return to the workforce after dropping attendant economic costs is a crucial first step out due to maternity. towards a solution. According to the McKinsey Global Institute, closing the gender gap within a Addressing the glass ceiling as important as decade will cost as much as USD 2 trillion or 1.7% increasing women labor force participation.