The rise of SHEconomy

It is not evident when or who can be credited with the emergence of the term “SHEconomy.” Still, it came about organically with the increased presence of women in the workplace and marketplace. The SHEconomy is also called women-economics, which denotes the rising power of women. It is driven by increased women's education, increased participation of women in the workforce, greater financial independence, and more significant influence of women as consumers. The SHEconomy became relevant when women's influence was globally undeniable.

The SHEconomy reflects women’s increasing participation in consumer spending, workforce participation, and leadership positions. Women are estimated to contribute $40 billion to global consumer spending by 2030. The SHEconomy is expected to grow in many sectors, like apparel, food, fitness, beauty, healthcare, fashion, and financial services. Although women control most of the spending in most consumer goods categories and other purchasing decisions, most business behavior signals that women are not key decision-makers. An exciting and startling fact is that women represent a growing market bigger than China and India combine

Research states that women are at the helm of decision-making, with involvement of 94% in home furnishing, 92% in vacation, 91% in home furnishing, 60% in automobiles, and 51% in consumer electronics. Women control a large share of the consumer wallet. As women contribute equally or more than men to the household income than the previous generations, they remain a crucial stakeholder in purchasing decision-making with a growing influence. Companies must accept this reality and adapt their product positioning and marketing strategies.

Women's entrepreneurship has surged since the pandemic. In 2023, women supported the economy with their spending. They have formed new businesses at rates that have outpaced the market, and that too in traditionally male-dominated industries like construction and manufacturing. Women entrepreneurs have played a vital role in the rise of SHEconomy. Globally, one in six women plans to start a business, and these rates are even higher in low-income economies.

This spike in women entrepreneurs is growing at a rate of 16.7%. Women entrepreneurs empower women and ensure that products and services that cater to women’s preferences are created, further fueling the SHEconomy. According to Mastercard, 27% of the businesses in Asia Pacific are owned by women. According to the World Bank, the Middle East has also witnessed an increase in women's entrepreneurship. Africa, driven by necessity and opportunity, has the highest rate of women's entrepreneurship globally at 28%. Though the numbers are different across geographies of the world, overall, the picture is clear that women are increasingly becoming a driving force in the global marketplace.

Recent research has underscored the value of gender diversity in firms, particularly the unique perspectives, experiences, and insights women bring, which translates into better outcomes and returns. Reports from Morgan Stanley reveal that companies with higher female representation tend to be larger organizations with higher dividend yields. These companies also demonstrate slightly lower volatility and risk exposure. Over time, the increase in women's participation on boards further underscores the positive impact of gender diversity in business decision-making. Women's participation is 24% in Asia, 29% in Europe, and North America.

These regions expect to see an increase in women's participation, ranging from 30% to 33% by 2030. In Africa and the Middle East, participation is slightly lower, ranging from 10% to 22%, but is also expected to increase in the coming years. The global average of women participation on boards is 24%. These figures indicate a shift in attitude and perspective towards women in leadership positions, highlighting the value of their contributions to business decision-making. This underscores the need for businesses to embrace gender diversity and adapt to the SHEconomy to stay competitive and thrive in the evolving business landscape.

The SHEconomy, once a niche concept, has emerged as a dominant economic force, driving growth, innovation, and consumer trends across global industries. The stage is set for women in the marketplace and workplace.

Today, there is greater equality in education, professional advancement, income growth, board participation, and consumer power. This trend presents both challenges and opportunities. However, businesses that recognize and cater to women’s increasing role in decision-making are not just surviving but thriving in the post-pandemic economy.

Companies and investors who embrace and adapt to these trends will benefit from unique governance, performance increase, and bottom-line growth. By aligning their strategies with the SHEconomy, businesses can tap into a significant and influential market segment, enhancing their competitiveness and potential for unprecedented success.

Dr Mythili Kolluru is a National-Level Award-Winning Outstanding Women Educator and Scholar in Strategic Management. She is an assistant professor at the marketing and management department of the College of Banking and Financial Studies in Muscat and a member of Knowledge Oman.