Where do women earn the most, how do they invest, what prevents them from earning more, and what is the situation with women’s well-being in Ukraine? Today I want to talk to you about the role of women in world business, about gender stereotypes, and how the world community is gradually coming to gender equality.
The international consulting company BCG has released a new study in the Women in Wealth series – “How Women Will Manage Their Capital in the Next Decade.” As follows from its results, in the last four years (2016-2019), the average annual world capital growth in the hands of women amounted to 6.1%, adding an average of $5 trillion annually. According to research in the next 3 years, we will observe a growth trend exponentially.
Where do the richest women live?
According to the data at the end of 2019, women owned $70 trillion – 32% of the global total. The largest share falls on the countries of North America ($35.4 trillion) the USA, followed by Western Europe ($14.3 trillion), and Asia (excluding Japan, $13 trillion).
The three leaders in women’s well-being among European countries are Great Britain ($2846 billion), Germany ($2394 billion), and France ($2128 billion). Given the impact of the coronavirus pandemic and according to the baseline and most likely scenario, by 2023 the global fortune of women could reach $93 trillion.
The fastest-growing region in this regard will be Asia (except for Japan, the authors of the study consider it separately). Asian women are expected to add more than $1 trillion a year over the next four years. By 2023, they will have more assets than any other region of the world except North America.
Researchers consider Japan separately. Due to cultural characteristics and isolation, Japanese women face more serious problems on their way to business integration. At the end of 2019, the wealth of Japanese businesswomen was estimated at $2.7 trillion, and the growth rate, compared to other Asian countries, remains at a lower level.
As for Western Europe, it is predicted to decrease the growth rate of women’s well-being, which could lead to an increase in the gap between North America and Asia. Latin America, Eastern Europe, and the Middle East, by contrast, promise strong growth over the next four years. The situation in the Middle East is fascinating: here, we can observe growth due to increased political and economic stability in the region, as well as improved women’s access to health care and education. Today, on average, the equal number of girls and boys study in primary schools in Arab countries, and in universities, the number of women in 22 Arab countries exceeds the number of male students by 15%.
How do women manage money?
In Ukraine, women prefer to keep their savings in bank accounts and in deposits – their share in the total volume reached 44% last year (the global average is 25%). Options traditionally popular in other regions, for example, life insurance and pensions, are not in demand among Ukrainians.
In the asset management industry, the habit of thinking about female clients according to the residual principle still remains, the authors of the study noted. Many banks continue to consider men as those who make the main financial decisions. Because of this, women may get the impression that they are not getting full service. Targeting female customers on the banking market, products are often either superficial or reflect outdated ideas about the role of women in managing their financial matters. 64% of women who participated in the survey believe that their bank or other asset management service provider does not work with them efficiently. Working women and representatives of high-welfare groups express their dissatisfaction with this problem most acutely.
The BCG study identified five factors that influence women’s investment decisions:
– the pay gap between men and women,
– the need for a flexible schedule,
– maternity leave,
– longer life expectancy,
– less risk tolerance.
All these factors, according to the authors of the study, suggest that women are more prone to planning key events and stages of life. For them, wealth is a means to an end, not an end in itself. Women make investment decisions based on facts, not intuition, trying to diversify risks. They give preference to long-term investments and larger volumes of liquidity.
What helps women earn more?
The authors of the study name three factors that contribute to the well-being of women and are relevant for the whole world but not for one specific region:
– equality of pay;
– entrepreneurial activity;
– leadership positions.
Development in these areas is uneven. Thus, participation in the labor market is growing much faster than equality in pay. The gap in the success of these factors between different regions is also very wide: for example, in North America, women make up about half of all highly skilled workers, compared to 20-40% in most developing countries.
In Ukraine and a number of other countries, experts highlight in addition to these three, other one important factor – political authority. Moreover, in their opinion, it is the most significant for Ukraine.
Stereotypes for the development of women’s well-being
In their financial activities, women often encounter outdated attitudes and stereotypes that prevent them from participating most effectively in asset management.
Many women surveyed during the study said that they felt like they were talking “top-down” on property management issues and that consultants often assume that the woman’s money comes from her husband or family. One female participant shared that a few days after she and her husband first met with a new consultant, he sent them a package of documents for her husband and a bracelet for her, although the woman was the main earner in the family.
According to the study’s authors, recognizing that the female segment is a great opportunity for business, and accordingly changing their approach, focusing on the needs of a particular client rather than their gender, money-managing market players can make the next decade decisive for the development of women’s well-being.