Wealth // The Rising Power of Women’s Wealth: Transforming Economies and Societies
The global landscape of wealth is undergoing a significant shift: the unprecedented rise of women’s wealth. In recent years, women have become formidable economic agents, contributing not only as workers and entrepreneurs but as influential investors and financial decision-makers. This change is reshaping both the financial industry and the broader societal structures in profound ways.
Unprecedented Growth
The trajectory of women’s wealth has been striking. According to recent data, women now control an estimated $93 trillion—an amount that continues to grow annually as more women enter higher-paying professions, lead companies, and inherit wealth. For example, a 2020 report by Boston Consulting Group indicated that women’s wealth grew from $51 trillion in 2016 to $72 trillion by 2020, showcasing an impressive annual growth rate of about 6%. This trend is further supported by the growing number of women-led startups and increased access to education. The rise in female CEOs and top executives at major corporations underscores this shift, with leaders like Mary Barra at General Motors and Jane Fraser at Citigroup setting high standards and inspiring others. Industries such as technology, finance, and healthcare are seeing a significant influx of talented women breaking through traditional barriers to achieve leadership positions. For instance, women now make up about 28% of the tech workforce, a notable increase compared to previous decades.
Breaking Down Barriers
Historically, women have faced significant barriers to accumulating and managing wealth, ranging from limited access to financial resources to ingrained social norms that discouraged female financial independence. For centuries, cultural and legal limitations restricted women’s participation in economic life. The gradual dismantling of these barriers has been bolstered by pivotal milestones such as legislative changes that ensure equal pay, expanded maternity leave policies, and increased efforts toward workplace equity. According to the World Economic Forum’s Global Gender Gap Report 2022, the global gender gap in economic participation and opportunity has improved significantly, although challenges remain.
Additionally, the proliferation of financial education programs aimed at women has equipped more individuals with the knowledge and confidence to navigate the financial world effectively. For example, organizations like Ellevest, founded by Sallie Krawcheck, are specifically tailored to empower women with financial advice and investment opportunities. Financial institutions are adapting, recognizing the need to cater specifically to the unique preferences and perspectives women bring to wealth management. This shift is reflected in the emergence of wealth management services tailored to women, emphasizing relationship-building and holistic financial planning.
A New Investment Philosophy
Women’s approach to investing often reflects broader, long-term perspectives with a strong inclination towards sustainability and impact. Studies have shown that women investors are more likely to prioritize social and environmental considerations in their decision-making, aligning investments with their values. A 2021 study by Morgan Stanley revealed that 84% of women are interested in sustainable investing, compared to 67% of men. This emphasis on responsible investing is influencing markets and propelling the growth of ESG (Environmental, Social, and Governance) funds. Recent data indicates that ESG funds managed or heavily influenced by women tend to outperform traditional investments over the long term, suggesting a more resilient and forward-thinking approach to wealth building.
This paradigm shift has encouraged major financial institutions to integrate ESG options more comprehensively, responding to the demand for value-driven investing. Additionally, women’s collaborative investment style often fosters the growth of community-centric projects, startups with social missions, and innovative solutions addressing global challenges such as climate change and inequality. For example, women-led venture funds like the Female Founders Fund focus on investing in companies started by women, which have shown to deliver strong returns and prioritise impactful business models.
Impact Beyond Finances
The ripple effects of increased women’s wealth extend beyond the financial sector. Greater financial power translates to enhanced economic security, increased philanthropic efforts, and stronger advocacy for policies that promote equity and community welfare. In many cases, women’s philanthropy takes a targeted approach, focusing on issues like education, healthcare, and poverty alleviation. For instance, Melinda French Gates has donated billions through the Bill & Melinda Gates Foundation to support global health and development initiatives, including programs aimed at empowering women and girls.
Women’s economic empowerment has also been linked to improved outcomes in education and health, creating a multiplier effect that uplifts entire communities. Research by the McKinsey Global Institute found that advancing gender equality could add $12 trillion to global GDP by 2025, highlighting the vast economic potential of empowering women. This growth has a pronounced effect in developing regions, where increased financial inclusion and empowerment of women lead to more robust economic development and improved quality of life for families.
Challenges and the Road Ahead
Despite this progress, challenges remain. The gender pay gap persists, with women in the United States earning about 82 cents for every dollar earned by men, according to 2022 data from the U.S. Bureau of Labor Statistics. Women also often face unique financial hurdles, such as career interruptions due to caregiving responsibilities. These career interruptions can lead to reduced lifetime earnings, affecting long-term wealth accumulation and retirement savings. Moreover, women are more likely to live longer than men, which necessitates a greater focus on financial planning for extended retirement periods.
Addressing these systemic issues is essential to sustaining and accelerating the momentum of women’s financial empowerment. Policymakers, businesses, and communities must collaborate to create more inclusive environments that support flexible working arrangements, promote equal pay, and provide resources for continuous skill development. Efforts to bridge these gaps must also tackle the underrepresentation of women in fields such as venture capital and private equity. For example, only 12% of decision-makers in U.S. venture capital firms are women, according to a 2021 report by All Raise. Providing women with greater access to networks, mentors, and leadership opportunities in these sectors can foster a more balanced investment landscape. Additionally, shifting cultural perceptions around caregiving—so it is viewed as a shared responsibility—can alleviate the financial strain placed disproportionately on women.
The rising power of women’s wealth is more than an economic trend—it’s a transformative force with the potential to reshape the world. As women’s financial influence continues to expand, it will pave the way for a more inclusive, sustainable, and equitable global economy. Ensuring that this progress is supported and sustained will be crucial for realizing the full potential of this powerful shift. Beyond mere financial gains, this movement carries the promise of fostering greater social justice, promoting diversity, and championing economic resilience for generations to come.