THE POWER OF PARITY: ADVANCING WOMEN’S EQUALITY IN ASIA PACIFIC APRIL 2018 ASibnocuet itMs GfoIunding in 1990, the McKinsey Global Institute (MGI) has sought to develop a deeper understanding of the evolving global economy. As the business and economics research arm of McKinsey & Company, MGI aims to provide leaders in the commercial, public, and social sectors with the facts and insights on which to base management and policy decisions. MGI research combines the disciplines of economics and management, employing the analytical tools of economics with the insights of business leaders. Our “micro-to-macro” methodology examines microeconomic industry trends to better understand the broad macroeconomic forces affecting business strategy and public policy. MGI’s in-depth reports have covered more than 20 countries and 30 industries. 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CCooppyyrriigghhtt ©© MMccKKiinnsseeyy && CCoommppaannyy 22001188 THE POWER OF PARITY: ADVANCING WOMEN’S EQUALITY IN ASIA PACIFIC Jonathan Woetzel | Shanghai Anu Madgavkar | Mumbai Kevin Sneader | Hong Kong Oliver Tonby | Singapore Diaan-Yi Lin | Singapore John Lydon | Sydney Sha Sha | Hong Kong Mekala Krishnan | Boston Kweilin Ellingrud | Minneapolis Michael Gubieski | Melbourne PREFACE Advancing women’s equality in work and society and Rakesh Mohan, senior fellow at the Jackson Institute represents one of the most sizable economic for Global Affairs at Yale University and distinguished opportunities for the world. McKinsey & Company has fellow at Brookings India. We are also grateful to the been researching, publishing, and helping shape action advisers who have worked with us regularly on our on gender diversity for more than a decade, and the “power of parity” series, namely Jeni Klugman, fellow, McKinsey Global Institute (MGI) has contributed to this Kennedy School of Government’s Women in Public Policy important issue with its research series on the “power Program, Harvard University, and managing director, of parity”. Georgetown Institute for Women Peace and Security; and Henriette Kolb, head of the Gender Secretariat, In September 2015, MGI published a global report, The International Finance Corporation. power of parity: How advancing women’s equality can add $12 trillion to global growth. Since then, we have This report would not have been possible without the issued reports on the power of parity in Canada, India, the expert input, advice, and help of numerous leading United Kingdom, the United States, and Western Europe, voices on these issues. We would like to thank Georgette as well as research on what it will take to deliver gender Tan Adamopoulos, group head, communications, Asia parity globally. In this report, MGI explores the challenge Pacific, Mastercard Worldwide; Willem Adema, senior of gender inequality in Asia Pacific, one of the most economist, Organisation for Economic Co-operation economically dynamic regions in the world, and an engine and Development; Vasuta Agarwal, vice president of global growth. and general manager, India, InMobi; Alison Aggarwal, director, Women’s Economic Security, Office for Women; This research was led by Jonathan Woetzel, a director of Amelia Agrawal, Asia partner and channel marketing MGI and senior partner of McKinsey, based in Shanghai; director, Microsoft; Stevia Angesty, co-founder, Feel Well Anu Madgavkar, an MGI partner based in Mumbai; Ceramics; Patricia Apps, professor of public economics, Kweilin Ellingrud, a partner based in Minneapolis; and University of Sydney Law School; Alice Au, board Mekala Krishnan, an MGI senior fellow based in Boston, member, Spencer Stuart; Natalie Au, formerly of the along with Kevin Sneader, chairman of McKinsey’s Council on Foreign Relations; Marian Baird, professor of offices in the Asia Pacific region, and McKinsey senior gender and employment relations, University of Sydney partners John Lydon in Sydney, Sha Sha in Hong Kong, Business School; Jennifer Baxter, senior research Oliver Tonby in Singapore, and Diaan-Yi Lin in Singapore. fellow, Australian Institute of Family Studies; Daiana Michael Gubieski, a consultant in Melbourne, led the Beitler, philanthropies director for Greater Asia and the working team, which comprised Alice Hudson, Nigel Lee, Pacific, Microsoft; Analisa Belares, CEO, Womensphere; James Oliver, Catherine Peralta, and Phillippa Radford. Deborah Brennan, professor, University of New South We are grateful to a number of McKinsey colleagues Wales; Elizabeth Broderick, former sex discrimination who were closely involved in this research and provided commissioner (2007–15), Australian Human Rights invaluable insight into the seven countries highlighted in Commission, convenor and founder of Male Champions the report. They are Rishi Arora, Anders Bärlund, Jules of Change, and special rapporteur, Working Group Carrigan, Jenny Cermak, Kaushik Das, Namrata Dubashi, on Discrimination Against Women, UN Human Rights Emma Dudley, Ellen Feehan, Vidhya Ganesan, Guillaume Council; Doreen Buettner, programme specialist, UN de Gantès, Rajat Gupta, Shishir Gupta, Rachel Howard, Women Indonesia; Avic Caparas, associate professor, Corinne Johnson, Peter Kenevan, Nick Leung, Guang University of Asia and the Pacific; Melinda Cilento, chief Li, Suraj Moraje, Joe Ngai, Tracy Nowski, Vivek Pandit, executive, Committee for Economic Development of Kristine Romano, Yukiko Sakai, Miki Sarumaru, Himanshu Australia; Ryce Chanchai, programme specialist, UN Satija, Jeongmin Seong, Tanya Sharma, Ben Vatterott, Jin Women; Tania Coltman, deputy chief of staff to the Wang, Kenji Watatani, Phillia Wibowo, Naomi Yamakawa, Minister for Women, Australia; Deepa Das, independent and Fadhilah Zamawi. programme development professional, UNICEF India; We are grateful to the academic advisers who helped Sharon G. Dayoan, vice chairman and head of audit, shape this research and provided challenge and insights KPMG, Philippines, and founding member, Filipina and guidance: Laura Tyson, professor of business CEO Circle; Xiao-yuan Dong, professor, University administration and economics and director of the Institute of Winnipeg; Helen Duce, leader, Lean In Singapore; for Business and Social Impact, Haas Business and Kathryn Fagg, board member, Reserve Bank of Australia, Public Policy Group, University of California at Berkeley; and president, Chief Executive Women; Annika Freyer, Virginia Tan, co-founder, She Loves Tech, Lean In China; CEO, Male Champions of Change; Debjani Ghosh, Jill Tang, co-founder, Ladies Who Tech; Julie Taylor trustee, NASSCOM Foundation, and honorary adviser, Broussard, country programme manager, UN Women; Federation of Indian Chambers of Commerce and Uma Thana Balasingam, co-founder, Lean In Singapore; Industry Science and Technology/Innovation Committee; Fraser Thompson, director, AlphaBeta Advisors; Tsukiko Jane Golley, associate professor, College of Asia and Tsukahara, vice president, Catalyst Japan; Astrid S. the Pacific, Australian National University; Geeta Rao Tuminez, regional director, corporate, external, and Gupta, executive director, 3D Program for Girls and legal affairs, Microsoft Southeast Asia; Valentina Y. D. Women, UN Foundation; Sotera B. de Guzman, OIC- Utari, researcher, The SMERU Research Institute; Ariane division chief, Philippine Statistics Authority; Jianbin Hao, Utomo, research fellow, Crawford School of Public director, Entrepreneurship and Employment Research Policy, Australian National University, and labour market Center, Alibaba Research Institute; Elizabeth Hill, senior economist, Australia Indonesia Partnership for Economic lecturer, University of Sydney, and co-convenor, Work + Governance; Maria-Noel Vaeza, director, Program Family Policy Roundtable; Shachi Irde, executive director, Division, UN Women; Emmeline L. Verzosa, executive Catalyst India WRC; Kae Ishikawa, director, Japan Liaison director, Philippine Commission on Women; Claire Office, UN Women; Anna-Karin Jatfors, deputy regional Wang, founder, Medistar; Edith Yeung, partner, China, director, UN Women; Kate Jenkins, sex discrimination 500 Startups; Naoko Yuki, partnerships consultant, UN commissioner, Australian Human Rights Commission; Women, Japan Liaison Office; Doris Zhang, founder, Geetha Kannan, managing director, AnitaB.org Institute TechX Queen; and Zhenzhen Zheng, professor, Institute for Women and Technology, India; Shobana Kamineni, of Population and Labor Economics, Chinese Academy of executive vice chairperson, Apollo Hospitals Enterprise Social Sciences. Ltd., and president, Confederation of Indian Industry; We would like to thank MGI’s operations team, which Amitabh Kant, CEO, NITI Aayog; Ayano Kashima, provided crucial support for this research: senior editor advocacy, outreach, and resource mobilisation team, UN Janet Bush; Cathy Gui and Rebeca Robboy in external Women, Japan; Miwa Kato, regional director Asia Pacific, communications and media relations; Julie Philpot, UN Women; Niny Khor, head, ADB-China Regional editorial production manager; Marisa Carder, graphics Knowledge Sharing Initiative, Asian Development specialist; Tim Beacom, research specialist; and Deadra Bank; Zoe Kinias, associate professor and academic Henderson, manager of personnel and administration. director, Gender Initiative, INSEAD; Bingqin Li, associate We are also grateful to Stephanie Gatto and Nicole White professor, University of New South Wales; Tiina Likki, of Sydney Design Studio, Australia, for their help with principal adviser, The Behavioural Insights Team; Jialei design and production. Lin, project officer, UN Women China; Susan Lloyd- Hurwitz, CEO and managing director, Mirvac Group; Amy This report contributes to MGI’s mission to help business Luinstra, senior gender adviser, East Asia and Pacific, and policy leaders understand the forces transforming the International Finance Corporation; Pelle Lutken, policy global economy, identify strategic locations, and prepare specialist, UNDP; Sabine Machl, special representative, for the next wave of growth. As with all MGI research, this UN Women; Charu Mathur, director, communications, work is independent and has not been commissioned operations and marketing, AnitaB.org India; Kathy Matsui, or sponsored in any way by any business, government, chief Japan strategist, Goldman Sachs Japan; Koh or other institution. We welcome your comments on the Miyaoi, regional gender equality advisor for Asia and the research at [email protected]. Pacific, UNDP; Tri Mumpuni, executive director, IBEKA; Jacques Bughin Sia Nowrojee, program director, 3D Program for Girls and Director, McKinsey Global Institute Women, UN Foundation; Jennifer Pan, ChinaSense; Lily Senior Partner, McKinsey & Company Puspasari, programme specialist, UN Women Indonesia; Brussels Veronica Quinn, adviser, The Behavioural Insights Team; James Manyika Holly Ransom, CEO, Emergent; Amanda Robbins, deputy Chairman and Director, McKinsey Global Institute director, Australia Indonesia Partnership for Economic Senior Partner, McKinsey & Company Governance; Anna Roy, adviser, NITI Aayog; Carol San Francisco Schwartz, board member, Reserve Bank of Australia, and founding chair, Women’s Leadership Institute Australia; Jonathan Woetzel Diane Smith-Gander, immediate past president, Chief Director, McKinsey Global Institute Executive Women; Miranda Stewart, director, Tax and Senior Partner, McKinsey & Company Transfer Policy Institute, Australian National University; Shanghai Diana Contreras Suarez, research fellow, University April 2018 of Melbourne; Pocket Sun, founder, SoGal Ventures; © Getty Images CONTENTS HIGHLIGHTS In brief Page vi 18 The path to parity: An Asia Pacific overview Page 1 There is no one Asia Pacific 1. Opportunities for women in business leadership story on gender inequality Page 37 37 2. Australia Page 59 3. China Large growth dividend from Page 79 advancing women’s equality 51 4. India Page 99 5. Indonesia Comprehensive measures Page 123 needed from all stakeholders 6. Japan Page 143 7. The Philippines Page 161 8. Singapore Page 183 Appendix Page 203 Bibliography Page 213 IN BRIEF ADVANCING WOMEN’S EQUALITY IN ASIA PACIFIC Advancing women’s equality in the countries of Asia Pacific could add $4.5 trillion to their collective annual GDP by 2025, a 12 percent increase over the business-as-usual trajectory. Already a powerful engine of global growth, pursuing the goal of gender parity can lift many more women out of poverty, unleash the economic potential of many others, and reinforce the region’s dynamic growth story. ƒ All countries would benefit from advancing women’s equality. In a best-in-region scenario in which each country matches the rate of progress of the fastest-improving country in its region, the largest absolute GDP opportunity is in China at $2.6 trillion, a 13 percent increase over business-as-usual GDP. The largest relative GDP opportunity is in India, which could achieve an 18 percent increase over business-as-usual GDP, or $770 billion. Across Asia Pacific, we estimate that 58 percent of the opportunity would come from raising the female labour-force participation ratio, 17 percent from increasing the number of hours women work, and the remaining 25 percent from more women working in higher-productivity sectors. ƒ MGI has established a strong link between gender equality in work and in society—the former is not achievable without the latter. MGI’s Gender Parity Score, or GPS, using 15 indicators of gender equality in work and society, measures the distance each country has travelled towards parity, which is set at 1.00. Overall, Asia Pacific has a GPS of 0.56, slightly lower than the global average of 0.61— both “high” levels of gender inequality. But countries in the region vary in their positions on specific indicators. There is no single Asia Pacific story. ƒ On gender equality in work, the Philippines stands out for its progress, followed by New Zealand and Singapore. The six countries furthest from gender parity in work are Bangladesh, India, Japan, Nepal, Pakistan, and South Korea. China does well on female labour-force participation but can improve its share of women in leadership—as can most countries in Asia. Globally, there are fewer than four women in leadership roles to every ten men, but, in Asia Pacific, only around one woman for every four men. Gender inequality also remains high across the region in the sharing of unpaid care work. ƒ On gender equality in society, Australia, New Zealand, the Philippines, and Singapore are ahead of most in the region on essential services such as education, maternal and reproductive health, financial and digital inclusion, and legal protection and political voice; countries like Bangladesh, India, Nepal, and Pakistan still have a considerable distance to travel. Achieving gender parity in digital and financial inclusion is a large opportunity in many South Asian and Southeast Asian countries. Physical security and autonomy remains a concern in many parts of the region—and globally. ƒ Asia Pacific nations have made progress in the past decade, driven by a combination of economic development, government measures, technological change, market forces, and activism. Maternal mortality and gender gaps in education have declined in countries including Bangladesh, Cambodia, India, and Nepal. Many countries have increased women’s labour-force participation, but participation has fallen in Bangladesh, India, and Sri Lanka, a trend that may be linked to rising household income. ƒ Mapping the road ahead, policy makers, companies, and non-governmental organisations could consider prioritising action in five areas that are urgent issues (to differing degrees) across the region: (1) focus on higher female labour-force participation, with steps to address unpaid care work as a priority to boost economic growth; (2) address the pressing regional and global issue of women’s underrepresentation in business leadership positions; (3) capture the economic and social benefits of improving access to digital technology; (4) shift social attitudes about women’s role in society and work in order to underpin progress on all aspects of gender inequality; and (5) collaborate on regional solutions as powerful catalysts for gender equality. The economic case for gender parity in Asia Pacific $ 4.5 trillion of additional annual GDP in 2025 could be added to the economies of Asia Pacific by advancing women’s equality or 12% above business-as-usual GDP in 20251 Gender inequality is high overall in Asia Pacific, with significant variations among countries2 Level of gender inequality Extremely high High Medium Low 0.51 0.39 0 – 0.50 0.50 – 0.75 0.75 – 0.95 0.95 – 1 0.93 0.89 0.22 0.37 0.33 Gender Work 0.56 0.38 0.89 0.87 Parity Services and enablers 0.16 0.77 Score in China South 0.42 Legal and political 0.73 0.29 Pakistan 0.79 0.57 0.66 Korea 0.300.87 Physical security Nepal 0.92 0.80 0.91 0.18 0.30 0.22 0.74 Japan 0.78 0.34 0.77 0.28 0.82 Myanmar Thailand 0.73 0.75 0.26 0.91 India 0.64 0.55 0.51 0.95 Bangladesh 0.90 0.32 0.52 0.80 Philippines 0.86 Vietnam 0.48 0.32 0.51 0.95 0.86 0.88 0.19 0.16 Cambodia 0.89 0.78 0.68 0.52 Malaysia Sri Lanka 0.94 0.88 0.36 0.37 0.96 0.82 0.66 0.72 Singapore Indonesia 0.95 0.96 0.55 0.66 0.86 0.81 Australia New Zealand Five areas for change in Asia Pacific Focus on higher female labour-force participation in quality jobs as a priority to boost economic growth Address the pressing regional and global issue of women’s underrepresentation in business leadership positions Capture the economic and social benefits of improving women’s access to digital technology Shift attitudes about women’s role in society and work, in order to underpin progress on all aspects of gender equality Collaborate on regional solutions, such as financing and knowledge-sharing, as powerful catalysts for gender equality 1 GDP opportunity in scenario where all countries match their best-in-region country in progress towards gender parity. 2 GPS scores are made up of 15 indicators of gender equality in work and society, weighted equally. GPS runs from 0 (no gender equality) to 1.0 (parity); for instance, a 0.95 ratio represents 5% distance from gender parity. SOURCE: McKinsey Global Institute analysis © Getty Images viii McKinsey Global Institute