Nevertheless, despite the advances and progress we see today, many women in the world still remain isolated in whole or in part from formal economic activity. Even in a globalized world, social, cultural, political and economic issues have left a billion women out of the world economy. However, these women will soon become one of the most impactful phenomenon in current global economics: the third billion.
Structural impact: women redefining the global economy
For years estimates have been developed of possible economic and social changes leading to the next wave of the inclusion of women in the global economy, and what this inclusion would mean. However, it has only recently been really elucidated how structural this effect will truly be.
The impact that the entry of women who currently do not participate in the economic system will have on the world economy will redefine world markets, add new talent and innovation drivers, and offer new perspectives to economic development in most countries of the world. Adding to this, statistical and developmental studies have emphasized the role of this group as a key to sustainable and inclusive economic growth, as well as social equality and the reduction of poverty.
It is increasingly evident that a new group of women is prepared to enter the mainstream world economy within the next decade; as workers, consumers, and businesswomen. The estimated impact of this entry will be as significant as that of the populations of China and India. This is the key behind the concept of the "Third Billion”, coined by Aguirre and Sabbagh in 2012.
The Third Billion: the new wave of economic actors
The Third Billion consists of women from both developing and industrialized countries whose economic lives have been atrophied, limited or suppressed; and are now set to become the new drivers of the world economy. Deanne Aguirre, in her article for Fortune, states that “While these women have been overlooked in many markets -- and actively suppressed in others -- they are increasingly taking their place in the global economy, as both employees and entrepreneurs. It will not be long before they take their place as executives as well.”
The study of the incorporation of women into the world of work through different national contexts and their impact on the international economy is a booming subject that will strongly condition economic and social development in the next decade. The impact of the Third Billion was most exhaustively explored in the Booz and Company report in 2012: "Empowering the third billion: Women and the world of work in 2012"; and has been reinstated in research work since then, especially in the study of women’s entrepreneurship, in works as impactful as the Global Entrepreneurship Monitor 2016/2017 Report on Women’s Entrepreneurship.
The trailblazing Booz and Company study shows that the potential of women as economic actors has not yet fully materialized. The information backing this study was established with data from the International Labor Organization (ILO), a United Nations constituent dedicated to tracking significant statistics on the global workforce. The research drew attention to three differentiated groups of women that were not truly included in the international economy, differentiating between those considered as "unprepared" (lacking sufficient education); those who are "untrained" (lack family support and that of their communities); and the significant number where both circumstances occur at the same time. Adding to this are the economic disadvantages and limitations the global economic gender gap imposes on women trying to enter the workforce.
Estimates suggest the entry of 870 million women into the economic system by 2020. This number will rise to a billion over the next decade. Most of these women (approximately 822 million) reside in emerging and developing nations. However, it is also notable that about 47 million live in North America, Western Europe and Japan. It becomes evident that the Third Billion is not a demographic bloc that can be considered homogeneous. Therefore, it will be important to take into account that the specific characteristics of the limitations that these women suffer to enter the world of work vary widely; according to the social, cultural and economic conditions of their national origin. These variances will be key to produce effective policy recommendations and customized solutions.
However, while national policy variations are needed to harness the potential of the collective, many of the issues that will have to be addressed fall within a similar set of problems and challenges, such as credit access or institutional support. Governmental prioritization of women-owned businesses for certain contracts, corporate diversification of supply chains, gender conscious venture capital investment, and mentorship programs for younger women, are only some examples of policies that can be adapted to various national contexts to foster women’s inclusion in the economic system.
Despite progress in women’s empowerment, many governments remain hesitant to invest decisively in initiatives that focus on this particular area, often citing the lack of quantifiable impact as a disincentive. With the objective of challenging this narrative, PwC’s Strategy& has created the “Third Billion index”, a quantitative scale and in-depth research project measuring 128 countries worldwide, on the basis of how effectively these nations are in empowering women as economic actors within their respective labor markets and economic systems. The index compiled data from the World Economic Forum and the Economist Intelligence Unit on both economic and social status, generating a body of quantitative work that evidences how to empower women most efficiently, and how much of a true national asset this development may be.
The central hypothesis of the index was that stronger public and private policies for empowerment would strongly correlate with a higher economic status of women; thesis which was strikingly backed with the report’s findings. Ultimately, it was found that women’s economic advancement didn’t just serve to enhance equality, it directly correlated with greater national prosperity overall.
Conclusion: women as key for social and economic progress
While the concept of the Third Billion has existed for a few years, little attention has been paid to the rise of these women as a collective, and there is much research to be done on how to optimize the inclusion of these women into the global economy. The Third Billion encompasses women with the diverse and widespread potential to become a driving force behind global markets within the coming decade. Both governments and companies who recognize this potential and put forth initiatives to harness it will gain a clear advantage in future growth and development.
The Third Billion has the opportunity and the challenge of redefining economic life; and will be key social drivers for peace, education, and poverty reduction. As stated by, UNDP Associate Administrator Rebeca Grynspan: “Women's empowerment is catalytic. Women are central actors making the case for the sustainable development triple-win strategy”. This refers to the multiplying effect women have been demonstrated to have in economic growth, social development, and environmental sustainability. Ultimately, we must be aware that we find ourselves in a turning point, where women from different backgrounds share a rapidly developing reality: they will be the world’s next change-makers, and may hold the key for a new social reality.
Bibliography & further references
1. Aguirre, D., Hoteit, L., Rupp, C., & Sabbagh, K. (2012). Empowering the third billion: Women and the world of work in 2012. Booz and Company.
2. Aguirre, D. (2018). How one billion women will shake the business world. Fortune. Retrieved 27 January 2018, from http://fortune.com/2012/10/05/how-one-billion-women-will-shake-the-business-world/
3. Aguirre, D & Sabbagh, K (2018). How to Keep the Promise of the Third Billion. strategy+business. Retrieved 14 November 2018, from https://www.strategy-business.com/article/00137?gko=5d83b
4. Global Entrepreneurship Monitor. (2017). Global Report 2016/2017. Global Entrepreneurship Research Association (GERA), London Business School, UK.