Being a customer seems like such a simple role. You pay money and receive a product or service in exchange.
But around the world, women are barred from full participation in the consumer economy. They earn less, so they have less to spend. Moreover, systemic inequality means even when they do have money to spend, they still are not recognized for that economic power. As a result, many innovative services and products, particularly those geared to women, never develop.
What if we viewed this problem instead as a huge business opportunity? Could we break the vicious circle of economic inequality by focusing on women as consumers and create more value in the world economy?
Social enterprises have been the trendsetters in tapping this market. One thing that corporations can learn from those enterprises is to appreciate the magnitude of the opportunity presented by the untapped potential of women as customers. The World Bank estimates that countries lose $160 trillion in wealth due to the earning gaps between men and women. Because economies are driven largely by consumer spending habits, consumers who earn more have more to spend, and therefore have more influence in shaping economies.
Especially in In developing countries, women have less access to fundamental necessities such as energy, water, and healthcare. UN Women has found that women also are less likely than men to have access to financial institutions or to have a bank account. And even the digital divide has a gender component: Of the 3.9 billion people globally who are offline, most live in rural areas, are poorer and less educated, and tend to be women and girls.
The World Economic Forum’s Global Gender Gap Index 2020, which measures inequality between men and women, cites economic participation and opportunity as one of the dimensions where the gender gap is widest globally.
The Gender Gap as a Business Opportunity
Back in 2017, the Business & Sustainable Development Commission made headlines with its “Better Business, Better World” report, which argued for the business benefits embedded in meeting the U.N.’s Sustainable Development Goals (SDGs). While SDGs are often thought to be aimed at governments, the report urged businesses to focus on SDGs.
Specifically, the Commission uncovered a $12 trillion market opportunity related to achieving the SDGs in four sectors: food and agriculture, cities, energy and materials, and health and well-being. The report goes on to note that “…to capture these opportunities in full, businesses need to pursue social and environmental sustainability as avidly as they pursue market share and shareholder value.”
Echoing this point in a different context, the 2021 annual letter to CEOs from Larry Fink, the billionaire founder and CEO of the BlackRock global investment management corporation, tied improved environmental, social, and governance (ESG) practices directly to companies’ financial performance.
“The more your company can show its purpose in delivering value to its customers, its employees, and its communities, the better able you will be to compete and deliver long-term, durable profits for shareholders,” Fink said in his letter.
As I point out in my book Access For All: Building Inclusive Economic Systems, access to basic services—including education, healthcare, electricity, water, sanitation, finance, technology, and transport—is a prerequisite for contributing to the economy and fueling economic growth.
Successful businesses effectively solve three key problems to reach poor and difficult-to-reach people, including women: availability, quality, and affordability:
- Availability refers to the ability to access the product or service at all times. Lack of availability can be the result of location or distance as well as political issues, such as one group using its power to limit access to other groups.
- Quality refers to the grade of excellence of the product or service. Is a product in good working order, or is it poorly made or past its expiration date, as in medicine or food?
- Affordability refers to the cost for the service or product, and whether it is priced prohibitively high for its target consumers.
In our work at Miller Center for Social Entrepreneurship to accelerate social enterprises worldwide, we see how social enterprises apply these insights broadly, including increasing women’s ability to become customers of basic services.
What Corporations Can Learn From Social Enterprises
Another lesson corporations can learn from social enterprises is one of attitude. According to a report by the global professional services company PwC: “Mainstream businesses typically see customers as separate entities, whereas successful social enterprises perceive customers as a link in an ecosystem.”
As more corporations adopt or expand their ESG goals—whether under pressure from interest groups or as a strategic realization, as Larry Fink proposes, that ESG activities are good for the bottom line—they can evaluate their business decisions from more than a strictly economic standpoint. In this way, they’ll be doing what social enterprises have always done, which is factor in benefits to all their stakeholders, not just shareholders.
Corporations should include women as among their most important stakeholders.
Using the dimensions of availability, quality, and affordability to expand their customer base of women enables businesses of all types and sizes to seize real opportunities—both from a purely economic perspective and to help fulfill important ESG goals.
To learn more about how social enterprises can help women thrive economically—as customers, as entrepreneurs and leaders, as employees, and as members of the entire value chain—I invite you to read my previous articles in this series exploring the four dimensions of women’s economic empowerment.
Brigit Helms, is executive director, Miller Center for Social Entrepreneurship.