1. strategy+business
The Third Billion
from strategy+business issue 59, Summer 2010
by DeAnne Aguirre and Karim Sabbagh
Reprint

2. A
The Third Billion
As growing numbers of women enter the
economic mainstream, they will have a profound
effect on global business.
by DeAnne Aguirre and
Karim Sabbagh
1
comment leading ideas
Leading Ideas
numbers will hasten the integration
of the regions where they live into
the larger economy.
huge and fast-growing To date, the potential of
group of people are poised women as economic players has
to take their place in the been unrealized. The reasons be-
economic mainstream over the next came evident recently in a Booz &
decade, as producers, consumers, Company analysis of data from the
employees, and entrepreneurs. This International Labour Organization
group’s impact on the global econ- (ILO), a United Nations constit-
omy will be at least as significant as uent that tracks global workforce
that of China and India’s billion- statistics. Globally, many women
plus populations. But its members could be considered “not prepared”
have not yet attracted the level of (lacking sufficient education, usu-
attention they deserve. ally defined as secondary school);
If China and India each repre- others are “not enabled” (lacking
sent 1 billion emerging participants support from families and commu-
in the global marketplace, then nities); and a significant number
this “third billion” is made up of are both. The specific characteristics
women, in both developing and of these two major constraints vary
industrialized nations, whose eco- widely, according to local social,
nomic lives have previously been cultural, and economic conditions.
stunted, underleveraged, or sup- But as the constraints are alleviated
pressed. These women, who have — through increased migration to
been living or contributing at a sub- cities, the expansion of educational
sistence level, are now entering the opportunities, changes in local laws
mainstream for the first time. We and cultural norms, and invest-
estimate that about 870 million of ments in infrastructures that sup-
them will do so by 2020, with the port greater workforce participation
number conceivably passing 1 bil- — the Third Billion’s movement
lion during the following decade. into the middle class will accelerate.
Their presence as economic actors The pattern of this emergence will
will be widely felt, because they have probably shift from a graduated
long been overrepresented in the incline to a graph that looks more
ranks of subsistence agriculture and like a hockey stick.
strategy + business issue 59
other resource-based forms of work. We derived the Third Billion
As they move into knowledge work, figure by combining the estimated
in domains ranging from manufac- number of “not prepared” and “not
turing to medicine to education to enabled” women between the ages
information technology, their sheer of 20 and 65 in 2020, using data

3. Exhibit 1: Women of the Third Billion
Representing about one-fourth of the world's women between ages 20 and 65, the Third
Billion falls into six basic categories reflecting how much they are prepared (with education)
and enabled (with local support), and whether they live in developed or emerging nations.
NOT PREPARED NOT ENABLED NEITHER PREPARED
lacking sufficient lacking support NOR ENABLED
education, usually from families and
defined as communities
secondary school
869 million women worldwide lead
lives outside the economic system
2
EMERGING ECONOMIES account for
658.8 mil.
94.5% of those women
65.2 mil.
5.5% of those women
32.5 mil.
DEVELOPED ECONOMIES 13.6 mil.
1.3 mil.
comment leading ideas
97.7 mil.
from the ILO. (See Exhibit 1.) Most
of these women — about 822 mil-
The Multiplier Effect Boosting the Potential
lion — live in emerging and devel-
oping nations; about 47 million live
Source: Booz & Company
in North America, western Europe,
and Japan. (Some might argue that
the women of China and India
should not be included, since they
are part of the first 2 billion; if those
women are omitted, the number of
women meeting our criteria would
still reach 525 million by 2020.
Counting those still under 20 and
newborn female children, it could
easily expand to a billion within
the following generation.) No mat-
ter how the numbers are counted,
a billion or more women are clearly
about to participate more fully in
the mainstream economy. This rep-
resents a significant force in such
regions as Latin America, Asia, the
Pacific Rim, the Middle East, east- that has not yet been fully appre- as a whole than investments in
ern and central Europe, and Africa. ciated, for at least three reasons. male-owned enterprises.
First, the impact will be spread
broadly; the women of the Third
The last decade has shown the Billion are not limited to one coun- The full potential of the Third
extraordinary effect that huge popu- try, but instead are dispersed in Billion is still unrealized in many
lation segments can have when they every part of the globe. Second, localities where overall labor pro-
are integrated into the global econo- when women become more active ductivity remains low. These regions
my (as in China and India). Newly economically, they tend to have are therefore able to reap particular-
enabled consumers and workers fewer children. As the birthrate goes ly strong benefits through a coordi-
serve as an economic multiplier, cre- down, the social priorities of a cul- nated approach that helps women
ating vast markets and increasing ture change, and it becomes easier overcome their “not prepared” and
the size and quality of the talent for more women to gain prepara- “not enabled” status.
pool. In periods of relative prosperi- tion and support for leading more Such efforts must start with
ty, their aspirations and persistence independent lives. Third, these an assessment of the specific con-
are engines for growth. In slower women are likely to invest a larger straints faced by Third Billion con-
periods, they represent pockets of proportion of their household in- stituents in a given region. These
economic activity that ameliorate come than men would in the edu- may include inadequate infrastruc-
the impact of decline. For example, cation of their children. As those ture (lack of roads, schools, and
the growth of emerging consumer children grow up, their economic telecommunications links); legal
markets in China and India helped impact increases further. This helps prohibitions on female advance-
stabilize the global system during explain why, as a report issued by ment; social conventions that in-
the downturn of 2008–09. the United Nations Development hibit female participation in the
But the multiplier effect of this Fund for Women found, invest- workforce; government restrictions
group of women could be much ments in women’s enterprises in on small businesses; outdated ap-
greater than those of other demo- developing countries yielded greater proaches to risk and credit; and
graphic expansions, and in a way long-term benefits to the economy other social, legal, cultural, or finan-

4. tribution they can make. +
DeAnne Aguirre
is a senior partner with Booz & Company
3
based in San Francisco. She leads the
firm’s work on organizational and talent
effectiveness.
Karim Sabbagh
is a Booz & Company partner based in
Dubai. He leads the firm’s work for global
communications, media, and technology
comment leading ideas
clients.
cial norms and practices that make idend will not be easy, and it may
Also contributing to this article were s+b
it difficult for women to go to require much social and legal change.
contributing editor Sally Helgesen and
Booz & Company Consultant Roshni Goel.
school, seek employment freely, But that change has already begun
benefit from their earnings, or man- in many places, and it will spread to
age their lives in other ways. many more. For leaders, the next
Some of these challenges can step is to recognize the value of this
be overcome with better planning population of women, and the con-
at the local level, whereas others re-
quire top-down intervention from
national governments. In either case, deanne.aguirre@booz.com
the goal should be to harness the
power of women in a regional econ-
omy, to help develop a more inte-
grated and productive activity base.
The impact of this type of strategy
karim.sabbagh@booz.com
could be significant in countries
as disparate as Egypt, Malaysia,
Ghana, Canada, Italy, and Poland.
And this is not only an oppor-
tunity for governments. Global cor-
porations and nongovernmental
organizations should also strategi-
cally assess what they can do to
enable and prepare these women
as potential consumers, employees,
and citizens. As Center for Work–
Life Policy founding president
Sylvia Ann Hewlett has noted, some
companies, including Goldman
Sachs and Google, are building tal-
ent recruitment plans around the
potential of the Third Billion. (The
center is releasing a report on
women in emerging markets in
mid-2010.) “By investing in [these
women],” Hewlett wrote in a 2010
blog entry on the Harvard Business
Review website, “companies are bet-
ting on a brighter future — for a
workforce just waiting to blossom,
for economies whose development
depends on this new crop of talent,
and, of course, for themselves.”
The creativity of the Third Bil-
strategy + business issue 59
lion may provide the world with an
unprecedented resource for driving
economic growth and improving
the quality of life over the next de-
cade. Reaping this demographic div-

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