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Close the global gender gap to drive GDP

The data is in. We stand today on the cusp of a global power shift, one that has the potential to redefine the way we work and live. Mounting evidence from the public and private sectors demonstrates that women at this moment are among the most powerful demographics the world has ever seen, poised to rival India and China as an economic force.

Last week McKinsey & Company published the Global Parity Report. Its conclusion? Closing the global gender gap could drive between $12 and $28 trillion in gross domestic product growth by 2025. The study mapped 15 gender-equality indicators for 95 countries and found that 40 of them have high or extremely high levels of gender inequality on at least half of the indicators, which fall into four categories: equality in work, essential services and enablers of economic opportunity, legal protection and political voice, and physical security and autonomy.

Female executive going over documents with team
Troels Graugaard | Getty Images

It's time to maximize the value that one half of the population can contribute to the global economy – it's fundamentally the right thing to do as well as an under-utilized economic opportunity of unprecedented proportion. The condition of the human race will be uplifted everywhere if we succeed.

But obstacles stand in our way. They range from discrimination to widespread violence against women; from design flaws in the work world incompatible with care giving to the basic denial of human rights. The World Bank's Women Business and the Law 2016 report, just released, finds that legal impediments to women's economic opportunity remain on the books in 155 economies around the world. We can't unlock this potential unless we fully address such injustices.

But the potential is enormous. Consider this: One study found that increasing women's workforce participation so that it is equal to that of men's could potentially raise GDP by 34 percent in Egypt, 9 percent in Japan, and 5 percent in the U.S. Already women own or lead more than a quarter of private businesses worldwide. In the U.S. alone, if women entrepreneurs were a country, its GDP would rank 5th in the world, close to that of economic powerhouse Germany. Women also wield enormous purchasing power, controlling some $20 trillion in annual consumer spending globally.

It's not just about how much money women have to spend, but how they spend it. Wealth in the hands of women has a multiplier effect: Women tend to reinvest their earnings into their communities and families, raising GDP and lowering illiteracy and mortality rates. As a result, investing in women and girls creates a "double dividend."

Women are also driving growth for companies. A 2011 analysis by Catalyst, a nonprofit devoted to expanding opportunities for women in business, found that Fortune 500 companies that consistently had three or more female board directors over a five-year period had nearly a 50 percent higher return on equity than companies with no women on their boards. According to one analysis, Fortune 1000 companies with women CEOs performed three times better than the benchmark S&P 500 between 2002 and 2014. In the words of the former president of the World Bank, Robert Zoellick, "Gender equality is smart economics."

The good news is that, armed with the data, both women and men leading communities, nonprofits, companies, and countries increasingly are making the case for putting women at the center of their strategies. From the village market to the boardroom, individuals are using the data about the benefits of investing in women to shift mindsets, changing how we think about the power of half the world's population. In some instances, making the case has meant giving families incentives to keep their daughters in school. In others, it has meant lobbying leading CEOs to take a hard look at the correlation between diversity and profitability.

As more women ascend to leadership positions across the public and private sectors, women increasingly are using their power for purpose at all levels of organizations, often to advance other women. They are reaching across sectors, nations, and socioeconomic strata to form networks propelled by a shared belief that women and girls have the potential to ignite change.

Since Seneca Falls in 1848, the first women's rights convention in the United States, women here and around the world have been on a journey to full and equal participation, a journey that requires a change in the way half the world's population is viewed and valued. And women are not on this journey alone: male champions around the world recognize that equal participation of women and girls is not solely a women's issue. Progress for women means progress for all. Every sector has a role to play.

There is a collective shift under way, evidenced by the mounting data, fueled by technology and connectivity, and propelled by emerging women leaders. There are few propitious moments in history when forces converge, creating the potential for a transformative leap—a moment when the world can move fast and forward. That moment is now if we are willing to seize it.

Commentary by Melanne Verveer and Kim Azzarelli who are the founders of Seneca Women, a global leadership community centered on advancing women. Verveer is also the executive director of the Georgetown University Institute for Women, Peace & Security and the First United States Ambassador for Global Women's Issues. Azzarelli is the chair and co-founder of Cornell law School's Avon Global Center for Women & Justice. They are the authors of "Fast Forward: How Women Can Achieve Power and Purpose" Follow them on Twitter @MelanneVerveer and @kimazzarelli.