The Next Billion Conference
May 7, 2015
Good morning everyone. Welcome to Vancouver, and welcome to The Next Billion; Women and the Economy of the Future. My name is Lisa Wolverton, and I am the Chair of today’s event.
As we gather to share insights into how women are already transforming and will continue to transform the global economy, it is only fitting that we gather in a place whose very existence offers wonderful testament to the constant need to embrace transformation in our economy and in our lives.
In the late 1800s, the spot where we gather today was a small freight shed and pier. Not much more. By 1927, not long after my great uncle founded Wolverton & Co. and just 11 years after the women of British Columbia had been given the right to vote, this small shed had been converted into Canadian Pacific’s Piers B and C. The planks that would have been underneath your feet were a major hub connecting passenger, freight, ships, and trains in a region that had been transformed by the gold rush.
Then, almost 60 years later, this current complex was constructed as the Canada Pavilion for the World’s Fair Expo in 1986. Since then it has become one of the city’s enduring landmarks.
What drove this incredible series of changes? Opportunity, a vision for the future, and a lot of hard work.
As a philanthropist committed to the advancement of women and girls internationally, I have attended many conferences in the past ten years, where this topic has been addressed principally from a social impact perspective. Women’s issues have traditionally been the domain of NGOs and foundations. Many individuals and organizations have shown great leadership and ingenuity in tackling and investing in the social, educational, and health dimensions of the gender divide at home and abroad. However, as I participated in many of these gatherings over the years, I had a distinct sense that something was missing.
For the private sector, diversity has traditionally been seen as part of a Corporate Social Responsibility—or CSR–agenda, related to, but somehow distinct from and less central to the operational aspects of business. Something that was nice to do, but not mission critical to a company’s bottom line. But that conversation is changing in real time. Firms in disparate industries have started to realize that engaging women as consumers, as employees, as investors, and as executives is important for their long-term viability. But how important? And how do we get there? How does a company put women at the heart of its business development? Answering those and other strategic questions is what led me and my colleagues to create the Next Billion conference.
I believe that this meeting has several differentiating aspects. It is really the first dialogue of its kind in Canada. It is, to be blunt, about business first and women second. Ultimately, we hope to launch a conversation today in which representatives of business are comfortable speaking and acting like businesses, not trying to be NGOs or foundations, but instead remaining rooted in the unsentimental realities and longer-term reasoning of the balance sheet. Furthermore, it is my hope that today’s discussions will focus more on the how than the why. How are companies facing the challenges of diversifying their supply chains, targeting new customers, grooming the next generation of executive and c-suite leadership?
As I noted, these and other questions animate today’s meeting. However, we would have not gotten to this point without many important individuals and organizations that shared their passion, resources and intellectual capital with us. Our partners in this event that have helped us, for over a year, to frame the meeting deserve special notice. They are the International Finance Corporation, which is a member of the World Bank Group; the Inter-American Development Bank; the European Bank of Reconstruction & Development; the United Nations Foundation; and Business for Social Responsibility.
Of course, this event would not be taking place without generous financial support from the following sponsors: Cancaccord Genuity, our lead sponsor, as well as Telus, Goldcorp, Air Canada, Fasken Martineau, Accenture and the Ethical Boardroom. I also want to thank our media sponsors – the Globe & Mail and Canadian Newswire.
As I already mentioned, we hope that today’s discussions will focus less on the why—that is the evidence base for why women matter in the global economy and why they will matter more in the future—and more on the how, namely how do businesses that are seeking to attract the next billion consumers, diversify their supply chains or attract a skilled female labor force, might do so. Indeed, much of the forthcoming conversations will revolve around the sharing of practical and pragmatic experiences by representatives of leading companies, investors, development banks, and governments that have been wrestling in various ways with the how.
That being said, I wanted to ‘set the table’ for today’s action-oriented sessions with a few key pieces of information that attest to the already large role that women play in the global economy as entrepreneurs, consumers etc.
We all know that women represent the largest consumer base in the world, and are extraordinarily important customers. Around the globe, they account for 65 percent of consumer purchases, although obviously this varies considerably by country. In North America, women account for the highest levels of expenditure, at 73 percent in the U.S. and 75 percent in Canada.
There are 860 million women of employable age around the globe, who are not part of the workforce – more than the entire population of Europe. Goldman Sachs estimates that closing the male-female employment gap would add 9 percent to gross domestic product in the United States. Think of that. Nine percent, at a time when first quarter GDP growth in the U.S. hovers somewhere between 1 to 2 percent. Closing the male-female employment gap would add 13 percent to Europe’s GDP and 16 percent to Japan.
Women owned entities account for 30% of businesses worldwide. Yet, according to the IFC, about 10% have access to the capital they need to grow their businesses. And as many as 70% of the small and medium enterprises owned by women in developing countries are under-served by financial institutions – a financing gap of some $285 billion. In Canada, women own one third of all businesses. They generate half of the revenue comparable to male owned businesses, yet their net profits are 89% of that of male owned firms. Clearly, there is an opportunity here.
As it stands, while women represent 50% of the world’s population and talent, they compromise only 1% of all suppliers to large corporations and governments.
With these statistics in mind, it is striking that so many companies have been so slow to incorporate women into their leadership structures when being inclusive is so essential to their ongoing business success.
Fortunately, forward thinking companies are waking up to the bottom line impact of investing in gender diversity in their supply chains, their leadership and their skilled labor force. Companies such as Accenture, Unilever, HP and IBM recognize that investments in women offer a long-term strategic advantage, and they are pressing that advantage. Shame on us if we don’t follow suit.
Goldcorp, who we will hear from today, has made great strides in not only investing in creating a pipeline of female engineers, but also the programs across their global regions to encourage and provide more opportunities for their female labor force to move up the ladder within their mining operations.
In 2000, Hindustan Unilever, launched Project Shakti in India, one of the company’s target areas for growth. By the end of 2010, Project Shakti had 45,000 woman entrepreneurs selling products to approximately three million consumers in 100,000 villages spread across 15 states in India. Through the initiative, Unilever doubled the number of rural households that it reached, gaining access to new market segments in hard to reach areas, and increasing their bottom line.
And that brings me to the reason that I think the glass is only half full. The Business Development Bank of Canada recently earmarked $700 million of funds to finance women-owned businesses – we still have enormous work to do unleashing women as entrepreneurs and key contributors to growth.
The Business Development Bank didn’t create the fund as a feel good measure, it created the fund because there is real opportunity here for scaling and expansion and because it recognizes the upside of unleashing opportunity. Women-owned businesses already account for $117 billion of economic activity annually in Canada, and there is no reason that number can’t skyrocket. Yet again and again, we still see signs that companies and investors are struggling to change their practices despite their vested interest in doing so.
Brazil is ranked by the World Bank as one of the top ten countries in terms of female business ownership. Banco Itawoo essia, who we will hear from today, takes a lead in investing in these growing businesses. In fact, 1/3 of their SME customer base are women-owned businesses. Recognizing the scale of this opportunity, the IFC is investing $470 million in Itawoo essia to expand access to finance for women-run businesses throughout Brazil.
Long term economic growth is on everyone’s agenda today across geographies. The common dialogue revolves around investment in infrastructure, elimination of trade barriers, investing in research, innovation and education. Better tax policies from our governments. Yet the role that women play as an existing and potential driver of growth is equally obvious and yet we are struggling to act on this realization globally. It just does not make sense to exclude half the world’s consumers, half of its talent pool and half of its labor force.
With this context in mind, we have assembled a series of discussions today that will attempt to get at key dimensions of the overarching questions of the role of women in the 21st century economy. What is the role of government in encouraging the private sector to view women more strategically as consumers, entrepreneurs, labor force and board members? What is the business case that underpins the choice to intentionally add women to the value chain and how has this inclusive sourcing improved the bottom line? How are companies working on rooting out unconscious bias to achieve greater diversity, functionality, and profits? More granularly…
Dr. Nouriel Roubini will be joining us today as our keynote speaker to talk about gender and its relevance to economic growth. He distinctly understands how the demographic decline of first world economies combined with an increase in educated and skilled labor force can increase competitiveness and generate growth with little cost, while delivering benefits of the tax base and pension pool.
Looking around the room, there are so many strong, insightful, and experienced voices here today. You represent a vast reservoir of knowledge, commitment, and best practice. I want you to share what you have learned, and why you believe what you do. It is that exchange of ideas that will help us collectively get to where we want to be. What has worked in your firm or organization? How have you shaped a new culture or brought new voices to the table? How are you ensuring that you acquire the best talent or challenge old assumptions? Equally important, what hasn’t worked, and why?
But we also want the ideas that surface over the course of the day to live beyond today’s meeting. Accordingly, we welcome your thoughts on next steps and targeted follow up activities, so please keep that in mind as you participate in today’s sessions.
I thank you all for coming today, look forward to interacting without throughout our sessions, and will return at the end of the day for some concluding thoughts. And now I would like to welcome Karen Zimmer, from Fasken Martineau, who will introduce our opening session.