Ms. Market: the future of the global economy is female

First introduced by Benjamin Graham in 1949 and later made famous by his student Warren Buffet, “Mr. Market” is an allegory that captures the powerful understanding of market forces and risk of group think. It is a clever means of illustrating the need to look at the big picture (fundamentals) rather than reacting to temporary emotional responses in the face of market fluctuations. 

Bearing these lessons in mind, we think it’s high time we introduce a Ms. Market. Whereas Graham and Buffett were referring to the technical ways in which markets act, we are referring to the unacknowledged presence of women in all areas of our economy: always present, often dominant; and yet, until recently, hidden, even in our terminology. Ms. Market not only looks at the big picture - she looks at the complete picture. 

The historical oversight of women in our global economy has - *gasp* - created a market opportunity today. Perhaps the biggest market opportunity that has ever existed. In fact, if women were to participate in the economy identically to men, they could add as much as $28 trillion or 26 percent to annual global GDP (roughly the combined size of the current U.S. and Chinese economies) by 2025. In emerging markets alone, women-owned and led companies that are accelerating social, economic and climate progress are systematically overlooked and under-financed—resulting in a missed opportunity to add $12 trillion to global GDP. 

Ms. Market is underserved, misunderstood, and slowly coming into her own. When she meets good partners she delivers great returns.

Ms. Market is ready for investment.

Numerous studies have correlated diverse women in the C-Suite with higher profitability, increased innovation, and greater resilience in the face of an economic downturn. Women-led companies also exit faster, with higher values to investors. Yet, even as we write this, here we are still needing to make a case for why half the world’s population should play a central and key role in our financial and economic spheres. 

The lack of diversity and women’s representation at key leadership and decision-making levels in our global economy, the rise of inequality, and the continued prioritization of short-term profits over long-term sustainability are the key catalysts for the failure of banking institutions such as Silicon Valley Bank (SVB). As Ellen McGirt states in her powerful piece published in Fortune last week, SVB’s executive leadership team and board of directors are “still disproportionately white and male, a far cry from a truly diverse representation of the U.S. demographic.”  And yet somehow we are getting distracted from the real conversation here. DEI and ESG have become the new scapegoat for bad governance, financial 101 practices, and management.

Our tunnel vision is resulting in a missed opportunity to invest responsibly in a more sustainable world, and in the diverse and women-led businesses building it. 

In a highly complex global economy, with an over-levered banking system, impacted by intersecting and interdependent macro-developments, why are we as venture capital, private equity, and institutional investors still using the same playbook? What is the economic case for continuing down this path?

Here’s a hint. There is none. We know that forty percent of CEOs around the world believe their companies won’t be viable in ten years if they don’t transform. We also know that every dollar invested in climate adaptation will generate at least 5 to 7 times that investment in risk and GDP degradation avoided. And here’s a final hint. In emerging markets, women are turning to entrepreneurship at a record pace to have a more stable economic future, fully exercise their power, and respond to other women and family consumer needs. The data tells us that women-led funds and businesses, including in emerging markets, outperform the market and generate undeniable and critical value and impact for their families, communities, cities, and economies. 

Again, Ms. Market is ready for investment. In fact, she’s been waiting on us for a long time.