Sustainable investing
March 8, 2021
4 mins

Women, unstoppable trends and innovation

March 8, 2021
4 mins
Harlin Singh Urofsky
Global Head of Sustainable Investing
Malcolm Spittler
Global Investment Strategy
Woman listening to a speaker at a conference

Economic miracles are finite, but the potential of women is not. COVID has handed all of us additional challenges, many of which are daunting, but we are encouraged that countries that promote access to education for females have higher female labor force participation and GDP growth.

In Outlook 2021 we wrote about unstoppable trends including greening the world and digitization, each of which offer investment opportunities that stand to be propelled by improvements in women’s welfare, the swelling of women in management ranks, and entrance and expansion into currently male-dominated sectors.

It is an interesting time to write about women, as we start to emerge from a recession in which women globally comprised more than half of job losses even though they comprise less than 40% of the workforce.1 It’s become abundantly clear that women need greater representation across a range of diverse, non-service sectors to preserve their jobs during economic downturns and improve their earnings power more generally.

For one thing, women are overrepresented in industries most likely to be affected by automation; by 2030, an estimated 40-160 million women may need to transition into higher skilled roles, necessitating higher education or upskilling.2 

There is yet significant progress to be made on this: Women currently make up 35% of STEM (Science, Technology, Engineering and Math) students and only 29.3% of those working in scientific research and development (R&D) globally.3

This is concerning from a human perspective, as various estimates posit that 70% of those living in poverty are women. It should also be concerning from an investor perspective. We believe firms with a diverse, multi-skilled workforce that includes women in management roles stand to outperform their competition.

Among studies examining this phenomenon is a recent analysis of Fortune 500 companies that revealed organizations with women in top management roles produced an average of 20% more patents than teams with male leaders.4 

In another study across 20 countries companies in the top quartile for gender diversity on executive teams were 25 percent more likely to have above-average profitability than companies in the fourth quartile, and diverse management teams earned 38% more of their revenues, on average, from innovative products and services than those companies with lower diversity.5

The share of women in managementSource: 2016 survey of 171 Germans, Swiss and Austrian companies by Boston Consulting Group and Technical University in Munich. Note: Innovation revenue = the percentage of revenue from new products or services in the most recent three-year period.


We believe that women also are poised to be the greatest innovators in greening the world. Women are more likely to be impacted by climate change, with the United Nations estimating that 80% of people displaced by climate change related disasters are women. This might go some ways toward explaining why women typically have greater environmental concern than do men—because they experience it personally so often.

Having said that, we believe that empowering women through improved education, and work opportunities will amplify their power to effect a greener world. They are the ideal change agents—historically resourceful in finding solutions for their families and decision makers.

To the extent that digitization and the march of 5G connectivity democratizes information and lowers the cost of education, E-learning will be a key tool for raising welfare standards of girls throughout the developing world. It’s worth noting that we have seen no economies embrace the digital economy without first embracing universal education. A well-informed, educated population and work force is necessary to both consume and produce the bounties of the digital economy.

Economic miracles are finite, but the potential of women is not. COVID has handed all of us additional challenges, many of which are daunting, but we are encouraged that countries that promote access to education for females have higher female labor force participation and GDP growth.

Here’s some proof: When evaluating female gains in the United Nations Human Development Index (HDI) from 2000 to 2010, we rank countries by percent gains in improving conditions for women. When we look at how those countries’ economies performed in the subsequent ten years, there is a remarkable link between more investment in women and subsequent growth that shows a strong catch up effect.

This is good news: Countries gain more when rising from a previously low level. The dramatic improvement in the conditions of women in the last decades and the corresponding outperformance shows the path forward for emerging countries around the world.

For more about our unstoppable trends including including digitization, greening the world, the rise of Asia and increasing longevity, please visit Outlook 2021

1   UN Women and UNDP data, The pandemic will push 47 million more women and girls below the poverty line, reversing decades of progress to eradicate extreme poverty, 02 September 2020, accessed 3 March 2021

2  Brookings Institute, The differing impact of automation on men and women’s work, 11 September 2019

3  Catalyst, Women in Science, Technology, Engineering, and Mathematics (STEM): Quick Take, 04 August, 2020

4  Yoni Blumberg, CNBC, Companies with more female executives make more money – here’s why, quoting Joe Carella on University of Arizona College of Management study

5  McKinsey Global Institute, COVID-19 and gender equality: Countering the regressive effects 15 July, 2020