Sexism That Irks Goldman Is Boon for Savvy CEOs: William Pesek
Gender was absent from the Group of 20’s talks. That’s odd because it was on display everywhere.
The G-20’s summit in Seoul last week featured what must be the biggest number of female leaders ever assembled for top- level economic talks. There, I moderated panel discussions with Cristina Fernandez de Kirchner of Argentina, Julia Gillard of Australia and Christine Lagarde, the French finance minister. I chatted briefly with Angela Merkel of Germany and at least caught a glimpse of Dilma Rousseff, president-elect of Brazil.
If ever there were a sign that women are in the ascendancy, Seoul was it. And yet South Korea is an ideal place to make a bigger point about women: Economies that underutilize them do so to their detriment.
Korea ranked a dismal 104th in a report last month by the World Economic Forum on the gender gap between men and women. It trailed the United Arab Emirates, Suriname, Senegal and Azerbaijan. That’s quite a blemish on an otherwise highly successful economy.
Now, there are signs companies are profiting from this discrimination -- and they’re not Korean, but foreign ones.
A study by U.S. and Korean researchers including Harvard Business School’s Jordan Siegel found that if you operate in a sexist country full of educated, talented women, it makes good business sense to tap them for management roles. They argue that a growing number of multinationals are loading up on Korean women and reaping the benefits.
It’s depressing how governments don’t realize that failing to harness half of populations holds back growth. Planes that need two engines to fly don’t take off when one isn’t working, so why do nations think they can thrive in our madly competitive world with one engine?
In their communiqué last week, the G-20 found time to mention the tiniest of details about everything from fossil-fuel subsidies to the average cost of transferring remittances to fostering “smallholder” agriculture. And yet nothing about empowering women.
Korea doesn’t have a monopoly on sexism. Japan relegates all too many educated women to the role of tea-girl. Kathy Matsui of Goldman Sachs Group Inc. in recent years has urged a greater focus on “womenomics.” The Tokyo-based strategist says that if Japan’s female employment rate matched that of males -- one of the highest anywhere at about 80 percent -- gross domestic product would get a boost of as much as 15 percent.
Never mind the pervasive evidence that women are a key cure for what ails deflationary Japan. Still, the men who control the nation have as much use for gender equality as they do increased immigration.
Korea must close its male-female divide to keep up with Asia’s upstart economies. Drafting more women for senior and middle management may be just what Korea Inc. needs. The same goes for encouraging more women to run for political office.
One of the paradoxes of Korea is education. Its institutions of higher education are meritocratic and produce legions of bright, qualified workers of both sexes. Even so, Korean women are chronically underemployed by Organization for Economic Cooperation and Development standards.
Siegel and researchers from the Massachusetts Institute of Technology and Hanshin University looked at hundreds of medium- sized and large companies operating in Korea. In the last decade, they found, a 10 percent increase in female managers was good for a 1 percent jump in profits generated by assets.
To me, Samsung Electronics Co. demonstrates the point. In the early 2000s, it had no women executives; today, female employees make up 40 percent of the total workforce of 187,800 and 10 percent of managers. Samsung is now the world’s largest television maker and is eating Sony Corp.’s lunch.
Womenomics can be linked to many of Korea’s biggest challenges. Rigid mindsets, for example, make it difficult for women to have both a fulfilling career and a family. Many end up putting off childbirth or having fewer kids, the result of which is one of the lowest birthrates anywhere.
Gender will grow in importance as developing Asia thrives. From China to Malaysia, many business cultures are less apt to let gender decide who gets big promotions. It’s something Korean President Lee Myung Bak should be thinking about early and often as he ponders how to compete.
Korea’s export-led model worked spectacularly. Many executives in Seoul told me how impressed they were by how the nation of 49 million people has evolved and boomed.
Yet Korea’s growth strategy has outlived its usefulness. The next phase must be about ideas and innovation, not factories. Korea will need all the collective brainpower it can muster -- male and female. If Korea doesn’t begin making the most out of its women, multinationals will.
G-20 gender dynamics offer a breath of fresh air. Perhaps having so many women at the boy’s table will shake leaders out of their complacency and help unleash Goldman’s womenomics.
Indian Prime Minister Manmohan Singh represented his nation proudly in Seoul. Still, I kept wishing he had brought Congress Party President Sonia Gandhi with him. It would have gone even further to remind us that it’s no longer a man’s world. If only our hiring practices reflected it.
(William Pesek is a Bloomberg News columnist. The opinions expressed are his own.)
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