At McKinsey, we think about growth, economic inclusion and sustainability as three different pillars, and three critical outcomes that we deeply care about around the world. Together, they both increase standards of living, increase wages that people can use to grow and have healthy lives and families, and protect our environment so that in five, ten, 50, 100 years we still have the environment that can sustain that growth over the long term.
In terms of what role companies play, we think business-led innovation can contribute about 30 percent of the overall portion of investment that is required to meet both our sustainability and our economic inclusion goals around the world. The other piece of that though can’t just be companies and business-led innovation. For example, public-private partnerships, government action, and other elements are important parts of closing that gap so that we can meet all of these.
Asia has made significant progress on gender equality over the last few decades. Across the board, on average in Asia Pacific, about one in four senior leaders—direct reports to the CEO—are women. And that is a broad spectrum, from very low levels in India and Japan, for example, to the other end of the spectrum, very high levels in China, Singapore, Philippines.
When we look at matching the same rate of economic participation between men and women across Asia Pacific, that would be worth about $4.5 trillion and a boost of about 12 percent GDP in the ten years leading up to 2030. And that’s a significant number given GDP growth projection rates of typically low single digits. Even for China, they are projected to be between 2 and 5 percent. So, to have a one percentage GDP opportunity every single year is a pretty significant opportunity.
We also know that gender equality is important because it leads to more diverse teams, better problem solving, better product development and innovation. For example, better innovation around how to serve customers if you better mirror your customers and clients.
We’ve also studied how diverse teams relate to economic returns, to total returns to shareholders. And we’ve studied that three times—in 2015, 2018, and 2021. What we find is that high gender diverse leadership teams are highly correlated—in fact, 25 percent more likely to have higher economic returns in terms of total returns to shareholders—than companies that are in the lowest quartile of that gender diversity. Gender diverse companies actually perform better economically.
So I think gender diversity, as well as diversity of thought, diversity of style, diversity of ethnicity—all these forms of diversity get us to more diverse teams, different ways of thinking, and ultimately a better solution, a better team.
You can imagine if you’re doing product innovation, you don’t want everybody with the same perspective. You want different ideas, different perspectives so that you can challenge each other and ultimately get to a better answer for the company, for your customers, and for your shareholders, if those apply.