As the world strives to achieve an all-inclusive economy, the ongoing uptick in women’s labor force participation is finally bearing fruits. Recent research has revealed their increased tolerance for risk and appetite for investment as a result of their bigger role in the workforce. There’s no doubt that women’s economic ventures can have a dramatic positive effect on economic growth, locally and worldwide.
Women Control More Wealth Than Ever
The increased active involvement of females in the labor force has had a significant measurable impact on markets across the globe. When more women are employed, have better-paying jobs, and play a bigger role in the workforce, they make more money. The higher income means they can save more money to invest in income-generating and wealth-creation activities.
The impact of these economically-involved women is evident in the U.S., where they own about 42% of the wealth. Their role in accelerating the American GDP growth could increase global market capitalization by $5.87 trillion over the next decade. Women’s share of the world’s investable wealth has increased, too.
Women’s Economic Ventures Soar Buoyed by Investment Confidence
Unlike many years back, women are now more confident about investing and taking risks. Most of them strongly believe they’re in control of their financial health. According to research, two-thirds of women are confident that their own actions, including investing wisely, working hard, and saving, are more important to their financial success than factors beyond their control. To them, factors like economic trends, a sudden illness, or financial market dynamics are less significant.
Something of a Paradox: Women’s Pessimism over Financial Stability
Despite the majority of women expressing high investment confidence, most have doubts over their personal finances. More than 20% of women in the U.S. believe that their financial situation is in “poor” shape, while three in five say their status is “fair” at best.
The main paradox here is that, for women to consistently invest more, they require income stability, which isn’t guaranteed for many of them. For this reason, 32% of women bank their financial security on factors largely beyond their control, for example, economic growth, stock market trends, or unforeseeable personal circumstances like an illness.
Women Investors’ Perspective on Environmental and Social Impact
Environmental, social, and governance (ESG) considerations appear closer to the hearts of women than men when deciding where to invest. Generally, women are more likely to include these factors when evaluating a potential investment or choosing a product. As their share of capital increases over time, it’s apparent that fund and asset managers must continue sharpening their focus on ESG issues.
Women’s Economic Ventures Transforming Economies
Women’s increased involvement in the workforce has empowered them to improve financial markets and economies worldwide. Based on credible estimates, they control nearly 40% of the world’s wealth. There’s no doubt that women’s record-high investment confidence and risk tolerance will continue catalyzing economic growth for years to come.
At the Economic Development Collaborative, we rally behind all the women and minorities that dare venture into business today. Get in touch with us for resources and consultations tailored for women-owned startups!