Investing in Women, Investing in Growth

As governments, financial institutions, investors and development organizations search for new pathways to strengthen economic resilience and drive sustainable growth, one priority is gaining renewed attention: investing in women and girls. Increasingly, policymakers and business leaders are recognizing that gender equality is not only a social objective but also a powerful economic strategy capable of unlocking productivity, innovation and long-term prosperity.

Recent discussions among global leaders and finance experts highlighted a growing consensus that advancing women's economic participation should be viewed as a core component of economic development. The conversation is shifting from treating gender equality as a standalone issue to recognizing it as a key driver of stronger economies, healthier societies and more resilient markets.

The Economic Potential of Gender Equality

Research consistently demonstrates that reducing barriers to women's participation in the economy can generate substantial economic benefits. Studies estimate that narrowing gender gaps in workforce participation and leadership positions could add approximately $7 trillion to global gross domestic product (GDP). Achieving full gender equality could increase global economic output by as much as $22 trillion to $28 trillion.

The entrepreneurial sector presents another significant opportunity. Expanding access to resources and support for women entrepreneurs could contribute an additional $5 trillion to $6 trillion to the global economy.

Despite these opportunities, significant inequalities persist. According to the World Bank's Women, Business and the Law 2026 report, no country currently provides women with fully equal economic opportunities.

Four Priorities for Accelerating Progress

Experts and stakeholders have identified several immediate actions that can help maximize both economic and social returns:

• Improve the efficiency of existing investments and resources.
• Move beyond reliance on traditional aid models.
• Develop more comprehensive ways of measuring economic value.
• Translate public commitments into concrete and measurable outcomes.

Gender Lens Investing: Combining Impact and Returns

One approach receiving growing attention is gender lens investing, which directs capital toward businesses owned or led by women, companies that create quality employment opportunities for women, and enterprises whose products and services improve women's lives.

Evidence suggests that this investment strategy can generate both strong financial performance and meaningful social impact. Data from the Global Impact Investing Network's 2024 survey found that 90% of gender-focused investors met or exceeded their financial expectations, while 97% achieved their intended impact goals.

Additional research from the International Finance Corporation (IFC) indicates that private equity and venture capital firms with gender-balanced senior investment teams often outperform their peers. Such firms have reported returns that are 10% to 20% higher than those of male-dominated teams, while companies with gender-diverse leadership have demonstrated valuation growth rates up to 25% higher than comparable organizations.

Barriers to Scaling Gender-Focused Investment

Although interest in gender lens investing is growing, several obstacles continue to limit its expansion. These include insufficient political commitment, a lack of alignment between different sources of capital, and challenges in implementing successful initiatives at scale.

As governments face increasing budget pressures and competing priorities, investments in gender equality are often among the first areas to experience reduced attention. However, many experts argue that this approach overlooks the significant economic returns generated by empowering women and girls.

Building a Comprehensive Financing Framework

Development finance is evolving, and many leaders now advocate for a broader financing ecosystem that supports women and girls through multiple channels. This includes grants, concessional finance, blended finance structures and private-sector investment.

While grant funding remains essential for addressing market failures and supporting public goods, private capital is necessary to achieve large-scale impact. This shift requires a fundamental change in perspective—viewing gender equality not as philanthropy but as a long-term investment in economic value creation.

Examples from various sectors demonstrate the potential of this approach. Agricultural projects have successfully mobilized substantial capital while increasing productivity among women farmers. Pension funds and sovereign wealth funds are increasingly incorporating gender-related criteria, including board diversity and gender-focused financial instruments, into their investment strategies.

Momentum continues to build. Initiatives such as the 2X Global Challenge have helped expand gender lens investing, with total assets invested through this approach now estimated at approximately $122 billion. Nevertheless, significant financing gaps remain. Women-owned small and medium-sized enterprises worldwide continue to face an estimated $320 billion shortfall in access to credit.

Rethinking How Economic Value Is Measured

Many experts argue that one of the most significant barriers to gender equality lies in how economies measure value. The World Bank estimates that eliminating the gender earnings gap could generate approximately $160 trillion in additional global wealth.

At the same time, women's unpaid care work—estimated to be worth around 9% of global GDP—remains largely excluded from traditional economic measurements. When important contributions are not reflected in official statistics, they often remain underfunded and undervalued.

The International Monetary Fund has also identified the underutilization of women's skills and talents as a form of human capital misallocation that can reduce productivity and economic growth.

As a result, many policymakers are calling for broader economic indicators that go beyond GDP, including improved recognition of unpaid care work, standardized gender-related investment metrics and greater integration of gender analysis into macroeconomic policymaking.

A Critical Investment for the Future

Investing in women and girls should not be viewed as an additional burden on already crowded policy agendas. Rather, it represents an investment in the foundations of economic growth, social stability and long-term prosperity.

The consequences of failing to act are significant, including lower productivity, reduced innovation, weaker public health outcomes and lost economic opportunities. By contrast, advancing gender equality offers the potential to strengthen economies, improve livelihoods and create more inclusive and sustainable development.

As governments, investors and institutions shape their future strategies, the evidence increasingly points in one direction: investing in women is not only the right thing to do—it is one of the smartest economic decisions societies can make.

Source: Adapted from an article published by the World Economic Forum (WEF), based on discussions and insights from the World Economic Forum Annual Meeting 2026 in Davos.