Can women be the key to moving the world forward and out of recession? Goldman Sachs’ economists seem to think so, judging by their recently published report entitled “The Power of the Purse: Gender Equality and Middle-Class Spending”.
The report reveals the enormous potential for companies in specific sectors due to the expected growth in female consumer spending in emerging markets – countries such as China, India, Russia, Vietnam, Mexico and Brazil.
Goldman Sachs, by identifying what they dub the “sweet spot”, is especially interested in the countries where the middle class is projected to rise the fastest, along with significant improvements in the status of women.
It detects significant improvements in women’s status due to changes in health care, fertility rates, education, legal protection, and political involvement, as well as a slight increase in the proportion of women working (with fewert women working in low-pay sectors in some countries).
And the report says female spending patterns in emerging markets will be similar to those in developed nations, where women are responsible for three-quarters of consumer spending on child care, food, and education.
“Goldman Sachs … reckons that improvements in female status and earnings potential are likely to support the development of human capital and bolster economic growth.
The interesting point in a business context is what it means for companies and investors. Improvements in gender equality in the developing world coincide with the emergence of an expanding global middle class, with annual incomes of $6,000 to $30,000, whose numbers will swell over the next two decades from 1.7 billion to 3.6 billion. Industry sectors likely to gain are food, healthcare, education, clothing and consumer durables. Financial services should also do well, since women are more likely to save than men, partly to offset their economic vulnerability.
This is a vast new market, and the companies that benefit most will be those recognising the value of these potential female customers and employees. Another argument, if one were needed, for more women on male-dominated company boards.”
Along similar lines, I’ve also just downloaded Harvard Business Review’s paper on “The Female Economy”, which, in urging companies to re-position themselves out of recession by changing their female attraction strategy, comments that:
“As a market, women represent a bigger opportunity than China and India combined. So why are companies doing such a poor job of serving them?”
Why, indeed – take note and heed, those who manufacture pink laptops and cars with special lipstick holders and the like.