What is Womenomics and Should Businesses Adopt It?

What is Womenomics and Should Businesses Adopt It?

626 426 Purnima Madaan

When an economy like Japan starts to focus on improving the role of women in economics, the strategy cannot be regarded as ‘wrong.’ Around the world, women are expected to stay at home and take care of the family. In Japan, this problem is deep-rooted into the culture. As a result, most Japanese women are stuck in part-time, low-paying jobs for an extended period. As per a report by Brookings Institute in 2017, 44.2% of the employed women in Japan were pursuing such careers.

The poor role of women in the country’s economy and the falling birth rate forced the Government of Japan to promote women in the labor force. So, the government, led by Prime Minister Abe, started with a program called womenomics, aimed at helping women gain skills and appropriate training to join the workforce.

The Origin of Womenomics

Newsweek coined the term womenomics in the year 1998. The term referred to the role of women in the economy. However, the real significance of womenomics came into the picture a year later. Kathy Matsui wrote a paper for Goldman Sachs’ Global Investment Research Division, “Womenomics: Buy the Female Economy.” That is when the world understood the importance of involving women in economic activities.

The Japan-based strategist, in her paper, explained how Japanese companies could benefit by promoting the female-led consumption of their products or by employing females in their companies. The study also mentioned that increasing the participation of women in the labor force and bringing it close to the USA’s figures would boost Japan’s economy for the next several years. Matsui, along with her colleagues, continued her research on the topic for the next two decades and published several other papers with Goldman Sachs in 2005, 2010, and 2014. All the while, giving recommendations to the companies and the government at large.

However, it was not until 2012 that the government started taking the research seriously. Under the leadership of then Prime Minister Shinzo Abe-san, the country adopted womenomics as a pillar of reform meant to uplift the economy from stagnation. Since then, Japan has seen a rise in the number of female employees in the workforce. The figure now stands at more than 70%, way more than that of the United States. To further foster the women at workplaces, the government of Japan introduced several other measures to promote equality, reduce the gender pay gap, and improve the overall work-life balance of the citizens. Although the country is yet to achieve all of its aspirations, it will not be wrong to call the current situation as inspiring.

Womenomics and Gender Equality

As per CFR (council of foreign relations) data, Workplace Equality Index 2018 ranked 189 countries based on various determinants, such as incentives to women to join the workforce, protection against sexual harassment, poor policies for maternity leave, pay disparity and more. In workplace equality, Australia topped the chart with a 94.9 score, followed by Canada (94.5) and New Zealand (93.6). The US ranked 20th on the list, whereas Japan was on 89th and Singapore on 100th rank for workplace equality far lower than countries like Columbia, Guyana, Vietnam. 

As per IBM research, more than 79% of the global companies do not consider gender inequality a concerning factor in their workplace. And as per the World Economic Forum estimate, it will take 202years to close the gender gap. Biggest challenged faced by economic gender gap is due to underrepresentation of women in professions like clould computing (12%), enginering (15%) and Data & AI (26%).  Even in worldwide political representation, women holds merely 25.2% of the parlimentary seats and 21.2% in ministerial level. To address these issues, business houses and the government will have ensure that women are better equipped to overcome these challenges and create more inclusive work cultures.

The goals of promoting womenomics cannot be fulfilled until the women in the economy have opportunities to share ideas, lead the teams, and make decisions. This is the reason why women must be given as many opportunities for growth as given to men. Even the research by Matsui talks about minimizing the gender pay gap to boost the economy. As per her study, if women get paid as much as men, the Japanese economy would grow by another 10%. That is a significant number, considering that Japan is the world’s third-largest economy already. However, the fact that every observation presented by the researchers has proved to be true; this might turn out accurate too!

The need for equality is hard felt for womenomics to be successful, but has this translated into reality?

The number of women in the workforce in Japan has increased with the Government initiative and support. It has been able to provide solutions to many problems that working mothers face. For instance, Japan has over 535,000 spots for childcare facilities, including free care for children of up to 2 years for families with a weak economic foundation. However, in terms of equality at opportunities and at equal pay, there is a lot that requires immediate action. In the last two years, Japan has failed to empower women and as a result in the Women Economic Forum’s gender equality scale it dropped to lowest position ever 121st out of 153 countries. Japan also happens to be the lowest scoring G7 country in this index. However, the world’s biggest economy, in United States only 65 companies have reviewed the gender pay gap. Hence companies need to incorporate as a business practice to collect and report pay data based on race, gender, and ethnicity. 

Sexism at the workplace is another challenge that women face. The Japanese law mandates women to wear high heels at the workplace. The admission policies for higher education favor men and corporates offices in the country that recommend women never to look ‘unfeminine.’ This is one reason why 82% of the women opt for non-managerial track in Japan. Unfortunately, this track does not present many opportunities, and women usually find themselves stuck in one place. But with the concept of Womenonmics will help to address the issue by creating a safer and supportive environment for women at the workplace, where women can have equal opportunity to participate. Due to the #Metoo movement, more than 52% of the companies have reassessed their sexual harassment policies. Companies like KPMG have created a Women Advisory board that supports women at various stages of their careers and work lives. Google has initiated in 2013 unconscious bias training program for more than 60,000 employees. 

However, if womenomics were to implement in Singapore, one could expect better and faster results. The women in Singapore have better and easier access to many resources. In Singapore, women’s labor participation is higher due to a higher ratio of foreign domestic helpers vs. the female population. The immigration laws in these countries are favorable and open. Besides, Government programs and campaigns are gender-neutral. The societal mindset is slowly changing for the better, and there is an incremental rise in inspiring women achievers in the country to motivate the next generation of entrepreneurs.

Do We Need Womenomics?

The role of women in economic activities is the need of the hour. A developed nation like Japan realized it after hitting the block, while Singapore still has time and resources at its disposal to plan and implement womenomics. As per McKinsey Global Institute, if women get equal pay as men for their contribution to the business, the world economy can witness a jump of $12 trillion by 2025. Countries like Singapore can have higher GDP growth with gender parity. 

Source: CRF

Womenomics, in its complete essence, would mean better participation of women in the decision-making roles, and would also change the corporate landscape. For example, after adopting womenomics, Japanese workers enjoy generous parental leaves benefit, better gender transparency, labor reform, and improved lifestyles of single mothers.

Womenomics would also ensure equality among men and women employees. Hence, women will finally have a fair chance at promotions and entering the board. Moreover, women would have an answer to problems like poor work-life balance, taking care of the family, and giving up on careers for child care.

Also Read: https://smequest.com/how-can-women-get-back-to-workforce/

Should Womenomics Be a Part of Enterprise Business Strategy?

Business strategy is a roadmap that defines the course of action of a company in both short and long terms. Any corporate reform that the business wants to inculcate in itself should follow the path that promises the best results. For this reason, womenomics should be a part of the enterprise business strategy.

Businesses should inculcate in their employees a sense of equality and responsibility towards each other irrespective of the gender. Many multi-national companies like to include this thought in their mission statement, and dearly stand by it.  

Companies as a business strategy should align their company policies to have complete transparent reporting data and gender pay parity initiatives. It will appeal to more women to join the workforce and will lead to the potential longevity of the company’s growth.  

Lately, a large number of companies in Singapore have started adopting the path of inclusivity and diversity. Such practices can be the point where womenomics can begin in the country. It is essential, along with a change in economic policies, companies will need to bring about cultural changes in the organization. 

With the promise of inclusivity and equality, women have an equal chance of building a successful career. Such careers will add value to the company and the country. Here are a few things that companies around the world are doing to promote women in the workplace.

  • 52% of the promotions in ADP go to women. The company also takes part in inclusion and diversity events at the local level.
  • Boston Consulting Group has signed the White House Equal Pay Pledge that asks the companies not to discriminate against pay based on gender.
  • Deloitte not only provides extensive paid leaves to mothers, but it also lets the new fathers help new mothers and children in their initial days for up to 16 weeks. The company also provides on-premise lactation facilities, backup childcare, and a parent program.
  • Salesforce provides service to the new mothers in breast milk storage and delivery for their newborns. The company also reimburses up to USD 10,000 for pregnancy-related expenses. The company is also known for its community efforts towards equal rights for everyone.
  • Women make up for more than 40% on Sodexo’s board. Also, 40% of the workforce at the company comprises of women.
  • Johnson & Johnson drives inclusion and diversity in its premises by asking the top management, specifically the CEO, to take the lead.
  • E&Y was one of the Big 4 (Deloitte, E&Y, KPMG & PWC) to mentor women for executive positions. As of now, 20% of the board members are women.

Women are gaining importance in the corporate sector. Of course, there are gaps and policy reforms that are desperately needed. But, the inclusion and women empowerment drives by the companies could be the starting point. Japan has proved that women in workplaces can create an impact. Goldman Sachs is continually working on the concept; all this should make the world confident that womenomics is the need of the hour to accomplish gender-equal society. 

Purnima Madaan

Purnima is a digital entrepreneur and likes to share her thoughts on business development and marketing. She likes to watch documentaries, read about customer psychology and review financial products. When she is not busy finding opportunities for her clients, she loves to indulge in fashion magazines and watch movies.

All stories by:Purnima Madaan
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Purnima Madaan

Purnima is a digital entrepreneur and likes to share her thoughts on business development and marketing. She likes to watch documentaries, read about customer psychology and review financial products. When she is not busy finding opportunities for her clients, she loves to indulge in fashion magazines and watch movies.

All stories by:Purnima Madaan