The BRIC Report predicted India would be the third largest economy by 2040. Now imagine if one had to put India on a faster growth trajectory and try to achieve that growth rate in double quick time. What does the country need to achieve that? A new report authored by chief economist and strategist, Future Group, implies that getting more women into the workforce might just hold the key.
The report, â€˜XX factor: the Impact of Women on Indiaâ€™s Growth, Incomes and Consumptionâ€™, says, more women entering the workforce could add $35 billion to GDP over the next five years, lifting incremental demand by 10%. This trend could make Indians 5% richer than otherwise projected by 2015 and 12% richer by 2025.
It has been much the same elsewhere in the world too. The increase in female employment in the rich world has been the main driving force of growth in the past couple of decades. Those women have contributed more to global GDP growth than either new technology or the new giants, China and India.
It is an interesting trend, and one that has largely passed under the radar. This trend has started to make a play of sorts in India. To start with, women employment has risen from 26% in 2000, to 31% of the workforce today. While this is in no way comparable to the situation in countries like Vietnam, China and Thailand, the rise is significant.
It is only intuitive. More women in the workforce mean tapping latent resources. This, in turn translates into increased income and consumption.
From a consumption point of view, this report has far-reaching implications for marketers. Globally, women control roughly 80% of household purchases. In Japan a basket of stocks focused on the women theme has grown by 88% over the past decade, compared to the Nikkei which has remained basically flat.
Talking about India in particular, what are the sectors where working women are more likely to spend? The top three include financial services, domestic helps and educational services. The other sectors that stand to benefit are retail apparel, accessories, personal care; packaged foods; fuel and transport; and leisure and entertainment (holidays, movies, eating out).
It is also observed that â€˜Working womenâ€™ are also more practical with regard to saving and investments. On an average, they save and invest 25% more than non-working women.