15 years ago in 2009, Harvard Business Review noted that "women now drive the world economy." The World Economic Forum estimates that globally, women could add as much as 26% of global GDP, which amounts to roughly $28 trillion, by 2025. That is not a number to be overlooked, especially when a comparison of developed and emerging markets happens.
In the case of emerging markets, women-owned and led companies are systematically overlooked and under-financed.
However, a strong business case exists for investing in these entrepreneurs which are generating attractive economic, social, and environmental returns.
Additionally, in the case of female investors, data shows that women are also underrepresented as investors. For example, the disparity is worse in emerging markets as compared to the US, where early-stage female investors amount to only around 20% (also an alarmingly low number). Syama Bunten, Founder & CEO of Scaling Retail, shares, “If women invested at the same rate as men we would over $3 trillion dollars in the global economy today. Imagine all of the people, businesses and ideas we could invest in to create change with that much capital. We must become financially active to see the change we want in the world. With the $30 trillion dollars, women are slated to inherit by 2030, this becomes our moment to maximize our capital through our values.”
Women’s Outperformance In The Business World
Women are outperforming across the board in the business world. Data represents the following ways women are doing this:
Another reason female founders are smart investment decisions is that women around the world are responsible for the vast majority – up to 80% – of consumption decisions.
Around 85% of the global population lives in emerging economies. It is where economic growth is fuelling a global middle class that’s growing by the hundreds of millions every year. Additionally, consumer demand is growing across all segments, including healthcare, education, real estate, agriculture, energy, tech, and fashion. Women-led businesses have firsthand insights on how to serve the changing needs of these consumers.
Clear Global Investment Fund Need
Investment funds focussed on women-led businesses are practically non-existent in countries outside of the US and Europe. Women-owned and led companies in developing and emerging economies are systematically overlooked, under-valued and under-financed, across all asset classes. Other than microfinancing for small businesses in emerging and frontier markets, there is not a single global investment fund focused on this opportunity.
As per PricewaterhouseCoopers, for example, by 2050 six of the seven largest economies in the world will be countries that are currently considered emerging markets. Standard Chartered Bank has drawn attention to the opportunity for private investors to shift investment strategies from developed to emerging markets, demonstrating the potential to boost emerging market household consumption by 4.5% annually and GDP by 3.1% annually for every year through 2060.
Women Are Solving Global Problems
On a global scale, women-led businesses are not only solving problems for millions of people but also have the potential to grow, scale and solve even more problems with innovation, creativity and investment capital.
Providing them with capital to found billion-dollar businesses in order to harness their growth potential and contribute to a better world is the right way to look ahead. As the World Economic Forum notes, this is not just for the sake of creating inclusion or equity or to “feel good” - it is a clear call to action to invest in women, the true trillion-dollar opportunity.
Further Sources Drawing Attention To The Global Call To Invest In Women:
World Economic Forum Report (June 2023)
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