The $28 Trillion gender diversity problem
May 28, 2020 | BLOG
22 years of being in industry gives you a reasonable timeline to look back and evaluate how things have changed. Whilst we have made great progress in technical innovations over the past 2 decades, it continues to shock me at the lack of progress we have made in bridging the gender diversity gap. In 2018, the Fortune 500 companies had only 24 female CEOs. That puts the diversity ratios at just under 5% of the Top 500.
Add to this, it has been repeatedly proven that organisations focussed on improving gender parity far outperform those that have a wider gender gap. In the 12-year period between 2002 and 2014, the 80 female CEOs in the Fortune 1000 outperformed the S&P 500 by 226% (Source: Quantopian). This is further corroborated in a study by Catalyst where Fortune 500 companies with the highest percentage of women on the board outperformed those with the least representation by 53%.
Whilst we cannot ignore the serious moral issue surrounding this imbalance, it doesn’t come without considerable economic loss.
Consider this – the 2025 Global GDP is expected to cross a $110 Trillion and it has been growing at about 3.5% YoY since 1961. If we were to bridge the gender gap over the next 6 years, our global economy would grow by 12.5% by 2025. This equates to 4X growth delivered through gender parity and brings an additional $28 Trillion to the global economy or an incremental 25% of global GDP.
That in itself is the single largest contributor to global GDP growth in the last 1000 years.
This issue gets exacerbated due to the gender gap in the tech industry.
Over the past 40 years, the technology industry has come to be known as an enabler of businesses. As we prepare to deliver the 4thindustrial revolution, the tech industry is carrying with it a promise to deliver accelerated and in some cases exponential business growth, thereby ensuring it is the front runner to help shape our collective future.
But, given its current growth trajectory and the resources needed to make a real impact, it is likely to fall short. At its very core lies its biggest weakness – the tech industry has one of the least impressive gender diversity ratios amongst its industry peers.
On one hand, at a global scale, women make up 50% of the world population and correspondingly, are 50% of the global workforce. Yet, according to the PWC Gender Diversity report (2017), only 15% of the working women population are in technology roles. Add to that, women leaders make up only 5% of global tech leadership.
Let’s be honest with ourselves, the challenge that lies ahead of us is immense and perhaps not fully understood. Our planet can hold 3 Billion people at best and we are pushing 12 billion by the end of the century. This maths problem in itself will lend us a multitude of problems that will take generations to solve – from climate change, to feeding a growing population, to keeping the earth from turning into a colossal garbage dump.
These problems are all very real and threaten our very life on earth. They cannot be solved if we are not operating at full strength.
It is time to make hard changes. We need a collective effort to make this work and each of us can do our bit and take small steps. Start with first acknowledging the gap. The subsequent steps should revolve around helping bring more women into industry, engage, enable and train women into tech & STEM roles and finally coach and mentor women into leadership positions.
Coming back to the moral issue I mentioned earlier – we have been blessed with two beautiful children – a boy and a girl. They both are being given equal opportunities and a good education with access to skills that interest them.
However, what keeps me up is that even with all the right opportunities presented today, if we cannot achieve gender parity over this next decade, my daughter and the rest like her have a 5% chance to shape their future.
And just how unfair is that …