Human capital development for women: A case for closing the global gender gap

2154 is forecast to be the year that we finally attain global gender parity, but we cannot afford to wait that long.

131 years is the estimated timespan for the global gender gap to close, according to the World Economic Forum’s Global Gender Gap Report released in June 2023.

The downstream effects of the COVID-19 pandemic — from workforce disruption to improper care infrastructure — severely lengthened this timeframe. The Global Gender Gap Report highlights the necessity with which human capital, covering the capabilities and skills of individuals and self-sustaining communities, must be prioritised moving forwards.

Across the 146 countries covered in the 2023 Global Gender Gap Report, the economic participation and opportunity gap closed by only 60.1%, even receding in the past year. Furthermore, women account for only 38% of human capital wealth globally in comparison to 62% of their male counterparts.

Human capital development equates to skill development and investments in education, health and societal infrastructure as a means of increasing consistent and equitable earning potential. By investing across these sectors, governments can enable women to generate enough launch velocity to avoid cycles of intergenerational poverty where the burden falls disproportionately on women.

Across the 146 countries covered in the 2023 Global Gender Gap Report, we are 68.6% of the way to achieving complete gender parity, a composite metric across four key dimensions: health and survival, educational attainment, economic participation and opportunity and political empowerment.

Inherently, skill development affects labour outcomes, but its value also extends beyond careers. Adults, particularly women, with low foundational skills have a higher likelihood of decreased health outcomes and less civic engagement. The opposite is true for those with high levels of foundational skills. There is a connection between human capital development and social mobility.

Investing in educational and healthcare infrastructure also builds professional opportunity and capacity for personal growth. Increases in earning potential that occur as a result of improved social infrastructure and democratised access to knowledge enable women to have more decision-making power, a key component for furthering the prosperity of a family, community and society.

Saudi Arabia showed a critical increase of 3.3% in attaining gender parity between 2021 and 2022. It ranked third in the highest gender parity increase, although the country still has long strides to make before reaching gender parity relative to other nations. It is one of five countries that has recently closed its gender gap in primary education and has nearly closed gaps in secondary and tertiary education, a key strategy for its investments in developing human capital.

In Saudi Vision 2030 — a strategic framework developed by the Council of Economic and Development Affairs to reconstruct a thriving economy through diversifying investments and building better public infrastructure — a major goal includes creating one million new jobs for women and enabling 30% of Saudi women to join the formal workforce. The latter has been exceeded seven years ahead of schedule with 37% of women forming part of the formal workforce in the first quarter of 2023.

Out of the 14 countries that reported increased parity in workforce participation, Saudi Arabia ranked highest, with a 9.7% increase in its gender parity score. The country has also encouraged women’s labour participation by prohibiting gender-based discrimination in accessing financial services, expanding childcare support programmes, such as Qurrah, and reducing transportation costs for over 20,000 women going to work.

When looking at countries that have had the greatest increase in gender parity from the 2023 Gender Gap Report, Liberia stands highest at an increase of 5.1%, now reaching a gender parity score of 76%. Liberia’s significant strides towards women’s rights have not directly correlated with workplace equality, given that 74% of female workers are employed in the informal sector and face heavy challenges in credit services, financial literacy, social protection and childcare training.

However, grassroots efforts, such as the UN Women's Next Level Business Program for Market Women, and larger government-based partnerships between groups, such as the National Petty Trader Union and the Central Bank of Liberia, have begun to reduce the friction for female workers to transition into the formal economy.

Strides in gender equality in the public and private sectors, from local and widespread government intervention to corporate investments, allow for the accelerated development of advanced and emerging economies globally.

One of the main indicators of gender equality includes equality in work. On a global scale, women are entering or re-entering the labour force at higher rates than men, which has led to slight increases in gender parity in the labour-force participation rate within certain regions. Even when women secure employment, however, the substandard working conditions and the dependence on informal employment highlight the widening gaps in workplace equity.

Much of the employment recovery since 2020 is due to informal employment, which leaves employees often without protection of labour laws, social benefits, insurance, equitable wages or governance and safety regulation, even opening up a higher risk of sexual harassment. Out of every five jobs created for women globally, four are within the informal economy, while this number is two out of every three jobs for men.

Essential services and enablers of economic opportunity, legal protection and political voice and physical security and autonomy – the remaining three categories of gender equality indicators — are metrics of social mobility. These are necessary to ensure increased autonomy and the ability for economic growth and productivity to remain sustainable.

The gap in political empowerment remains by far the largest gap in achieving global gender parity. Out of the 146 countries covered by the 2023 index, the political empowerment gap has closed by only 22.1%. When women’s political leadership reaches a critical mass — defined as about 25 to 30% of the legislative system — women are more likely to challenge their male counterparts, conventions and political agendas.

Meanwhile, women are not only more likely to advocate for policies supporting education and health infrastructure, as shown by the highest-GDP OECD countries, but also promote stability through the increase of humanistic practices that include inclusive decision-making processes at a national and grassroots level and a focus on peaceful international reconciliation.

Investing in human capital is the single most effective way of promoting rapid social and economic growth and distributing its benefits more fairly.

Furthermore, the investments add extraordinary value to all societies, given the progress that is yet to be made in the lowest and highest decile of countries making strides towards gender parity. In a world where women play an identical role in labour markets to that of men, as much as $28 trillion, or 26%, could be added to the global annual GDP by 2025. This impact is roughly equivalent to the size of the combined Chinese and US economies.

The benefits of gender parity are shown through various metrics of prosperity — from GDP increases to reported levels of individual fulfilment. This is consistent for countries standing both at the top of the list for gender parity in all four sectors – Iceland, Norway, Finland, New Zealand and Sweden – and countries, such as Liberia, Estonia, Bhutan and Malawi, which are experiencing rapid increases in gender-aware practices.

When we collectively begin to view women as assets to global development and recognize their rights as a means of social prosperity, we can invest in a future that leverages the human capital of men and women as we progress towards further developing exponential technologies and agile systems.