The Twittersphere was set abuzz in early May when “the Oracle of Omaha” and Berkshire Hathaway CEO, Warren Buffett, joined the social media platform with some surprisingly youthful words for an 82 year old:
Considering his only substantive tweet since came later that same day, it is now clear his foray into tweeting was designed to ensure a large audience for an article on a subject that is clearly very important to him: “why women are key to America’s prosperity”
Buffet’s views on this topic can be summarised as follows:
- The United States has achieved “mind-blowing” progress over the past 250-odd years through a political and economic system that maximises human potential and has resulted in a very high standard of living
- Much of this growth has been achieved without fully utilising the talents of women, an issue that has only been addressed relatively recently
- The reasons for this underutilization can be partly explained by the fact that discrimination against women was entrenched into the US Constitution from the outset and, although this discrimination has been gradually wound back over the years (most notably through the 19th amendment, discriminatory attitudes and behaviours have remained, evidenced by the lack of females represented in leadership positions, incorrectly justified by claiming the existence of “no qualified [female] candidates”
- Resistance to change can be partly explained by two factors:
- “Resistance among the powerful is natural when change clashes with their self-interest” (i.e. leaders have not wanted to increase the number of competitors by promoting women to compete for their positions)
- Many people have lacked the imagination to seek a world different from the one they have lived in
- This underutilisation cannot be justified by a difference in abilities between sexes but rather a difference in social expectations
- These social expectations often unfortunately contribute to women imposing unfounded limitations on themselves
- However, it is in everyone’s self-interest (including males) to address this issue
- “No manager operates his or her plants at 80% efficiency when steps could be taken that would increase output”
- Therefore, the closer America can get to fully utilising the potential of 100% of its citizens, the greater its output of goods and services (and standard of living) will be
Buffett’s argument is just as relevant to creating economic growth in Australia as it is in the United States. There is a proven correlation between labor force participation and economic growth, regardless of the economy.
Although Australia has a slightly higher female labor participation rate than the United States (2.6 percentage points higher, according to the OECD’s 2011-12 Factbook , there are many developed nations with higher participation rates than Australia, suggesting increased growth in the Australian Female Economy is achievable. New Zealand, Finland, Canada, the Netherlands, Sweden, Denmark, Switzerland Norway and Iceland all have higher participation rates than Australia with Iceland’s rate (the OECD leader) an impressive 11.8 percentage points higher than Australia.
So how do we promote this growth in Australia? The efforts being made by Australian businesses and governments regarding improved maternity leave and flexible working arrangements for working mothers should be applauded and continued.
But entrepreneurs can also play a significant role by providing platforms and opportunities that allow and promote mothers (and all Australians for that matter) to freelance from home, thereby fully utilizing their talents. This would provide an important benefit for the individuals involved and the overall economy.