Women: The Most Underused Resource in Japan
Published by Japan Spotlight, June, 2010
Japan Economic Foundation
By Suzanne Price
Throughout the world, there is a business case for investment in a diverse workforce and the infrastructure for diverse talent to thrive. In Japan, while many aspects of diversity need to be addressed, women are by far the most underutilized resource available for economic growth, representing 50% of the population.
Academic experts say that an increasingly diverse workforce and effective management of diversity can give a company a competitive advantage by allowing for more creative and innovative ideas and solutions to meet the needs of an increasingly diverse clientele. Meanwhile, global human resources leaders indicate that diversity initiatives have a positive impact on corporate culture, attraction and retention of talent and client relations. Companies with good practice in diversity support the idea that diversity initiatives and a diverse workforce contribute to economic success and can have a positive impact on the company’s stock price (“The Business of Diversity,” S. Rutherford & S. Ollearnshaw, 2002).
Analysts at Goldman Sachs believe that increasing the number of women in the workforce and thereby narrowing the gap between male and female employment rates would result in a hugely positive impact on the global economy (Goldman Sachs, December 2006). In their report, “The Ascent of Asia,” Japanese financial services group Nomura predicts that in 2011-2020, Japan’s average GDP is likely to be around 0.5% under current circumstances and could increase to around 1.5% if Japan activates its latent female talent supply (Nomura, 2010). This link has already been proven in Europe where increased female labor force participation over the last 10 years accounts for a significant share of economic growth. The concept of “Womenomics” developed by Goldman Sachs analysts in Japan suggests that an increase in female labor force participation can boost Japan’s growth rate and have a positive impact on the performance of many Japanese companies (Goldman Sachs, 2005). Other research shows that an increase in female workers directly correlates to an increase in the birthrate (Europa, 2007), contradicting other suggestions that in order to address the falling birthrate in Japan, women need to be compensated to stay at home
Across industries, companies that have greater numbers of women on boards of directors outperform those with fewer numbers. A comparison of Fortune 500 companies showed that those with more female board members outperformed those with fewer in terms of return on equity, return on sales and return on invested capital.
Furthermore, since women make a majority of purchase decisions for themselves and their families, propping up the economy with their consumerism, it is important that companies devise marketing strategies that appeal to women for their products and services and include women on their marketing teams.