Currently, women own a ridiculously small percentage of the world’s assets. While entrepreneurship is not the only solution to this challenge, it is one of the best ways for women to build wealth while also creating jobs for others. It is in our collective interests to do everything we can to support women who are willing to take the risk of starting and growing a business. More money in the hands of women will have a positive impact on economic and community development. In general, women business owners provide innovative products and services at competitive prices, support a sustainable environment, and invest their profits back into their families and communities. The economic impact reaches beyond the local level, of course. Think about what could happen if more female entrepreneurs worldwide succeeded in building their businesses and had the opportunity and know-how to grow them. The Boston Consulting Group estimates that if women and men participated equally as entrepreneurs, the global GDP could rise by as much as 2 percent or $1.5 trillion. Investing in women has more than a social and economic impact, though. Increasing spend with women-owned businesses has proven to be essential to doing business better in the 21st century. Five years ago, we established WEConnect International to help multinational corporations develop and leverage more diverse and inclusive global value chains. In this short time we have seen how signing contracts with women’s business enterprises gives corporations a competitive edge. First and foremost, women make the vast majority of purchasing decisions. According to a recent report issued by EY, women control nearly US$12 trillion or 65% of consumer discretionary spending. By 2028, it is expected they will control nearly 75% of spending worldwide. By diversifying their supplier base to reflect their markets, multinational corporations can increase shareholder value and enhance competitive advantage by anticipating the needs of all their customers. Women’s business enterprises, however, have much more to offer corporations aside from representing their consumer base. Companies can improve their bottom line by connecting with women who can compete on quality, service and price. By increasing vendor options to include new suppliers, companies can also minimize risks associated with a small or stagnant pool of suppliers. Investing in women’s business enterprises is also an opportunity for brand enhancement. Consumers are increasingly dictating whom they want to buy from, how they want to buy, and which behaviors they want the companies they buy from to follow. The growing trend among customers is to demand transparency, sustainability and inclusion. A corporation with a strong supplier diversity program demonstrates its commitment to women’s economic empowerment and inclusive sourcing, and can build a loyal customer base. Supporting female entrepreneurship, such as the impressive work of Cornerstone Capital Inc. where I serve as a director, takes more than just buying from women. We must also create an even playing field for women entrepreneurs to compete with their male counterparts. Women still lack equal access to business training, finance, and networking opportunities – all essential elements for any entrepreneur to successfully establish and grow a business. The ecosystems of support required must be built through innovative partnerships. One example: the Advancing Women-Owned Businesses in New Markets Commitment to Action announced at the Clinton Global Initiative (CGI) Annual Meeting in 2013. The commitment aims to increase CGI corporate member spending on women-owned businesses based outside of the U.S. by at least US$1.5 billion by 2018, as well as implement supplier-readiness initiatives targeting at least 15,000 women-owned businesses based outside of the U.S. by 2018. The CGI commitment partners include Accenture LLP, The Boeing Company, Cherie Blair Foundation for Women, The Coca-Cola Co., DLA Piper, EY, Exxon Mobil Corp., Freeport McMoRan Copper & Gold Inc., Goldman Sachs 10,000 Women, IBM, Intel Corp., The International Center for Research on Women, The Inter-American Development Bank, Johnson Controls Inc., Marriott International Inc., McLarty Global Fellows, Pfizer Inc., TechnoServe, The Rockefeller Foundation, The Royal Bank of Scotland plc, Thunderbird School of Global Management, the U.S. Department of State, Vital Voices, Wal- Mart Stores, Inc., and WEConnect International. One other collaboration doing important work in support of women’s economic empowerment is the Global Banking Alliance for Women, created by some of the largest and most inclusive banks to propel the growth of women in business and women’s wealth creation, while generating superior business outcomes for member financial institutions. Elizabeth A. Vazquez is a serial social entrepreneur and world leader in global supplier diversity and inclusion. As the CEO of WEConnect International, she is responsible for mission delivery and impact. The WEConnect International team supports women business owners in over 80 countries and a network of local representatives in 17 countries. A member of the Cornerstone Capital Board of Directors, she is also the author of Buying for Impact: How to Buy from Women and Change our World.
Why Investing in Women is a Business Imperative
February 17, 2015