mySay: Leveraging gender equality to advance Malaysia’s digital economy

This article first appeared in Forum, The Edge Malaysia Weekly, on March 15, 2021 - March 21, 2021.
mySay: Leveraging gender equality to advance Malaysia’s digital economy
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Malaysia has made strides in the past decade when it comes to gender equality. Based on the Malaysia Gender Gap Index (MGGI), the country was ranked No 73 globally in 2019, ahead of several countries in the region, such as Thailand and Indonesia.

The index — which identifies the gap between women and men across economic participation and opportunity, educational attainment, health and survival and political empowerment — also saw scores of above 0.7 in 2018 and 2019. A score with a value of 1.0 indicates that equality between women and men has been achieved.

Yet, more can be done to improve women’s labour force participation rate (LFPR), which was at 55.6% in 2019. Generally, the women’s LFPR for a developed nation is above 60%. We need to take action to help women advance in this arena.

The coronavirus crisis has impacted decades of progress in terms of gender equality. Around the world, and in Malaysia as well, women have been disproportionately affected by the crisis compared to men, both at work and at home. In the past year, the pandemic has accelerated the demand for digitally enabled jobs. Worldwide, we have found that 40 million to 160 million women — 7% to 24% of those currently employed — may need to transition across occupations to ensure they are positioned for these shifts in labour demand.

Covid-19’s disproportionate impact on women’s economic progress

Research by the McKinsey Global Institute (MGI) finds that women’s jobs have been nearly twice as vulnerable as men’s during the Covid-19 pandemic. While women make up 39% of global employment, they accounted for 54% of the overall job losses as at May 2020.

One reason for this is that women are disproportionately represented in industries that are hardest hit by the Covid-19 crisis. Globally, women hold 54% of jobs in accommodation and food services; 43% in retail and wholesale trade; and 46% in other services, including arts, recreation and public administration.

Women are also carrying a disproportionate burden of unpaid care, the demands of which have grown substantially during the pandemic. This is a continuation of a trend that began before the pandemic occurred. According to a 2019 World Bank report, more than half of women in Malaysia cited housework as their reason for not joining the labour force. Now, with the pandemic-induced increase in care responsibilities and housework, many women have been forced to leave paid employment to take on additional unpaid care, such as childcare and home schooling.

Opportunities in tech for women

Beyond the unfavourable implications for women, there are broader economic consequences. Our research has found that, if no action is taken to counter the gender-regressive effects of Covid-19, global GDP could be US$1 trillion less in 2030 than it would be if women’s unemployment simply tracked that of men. Conversely, if action is taken to advance gender equality, US$12 trillion could be added to global GDP in 2030.

At the same time, the global tech sector is facing a severe skills shortage. The demand for advanced IT and programming skills is expected to increase by as much as 90% over the next 15 years, according to MGI.

In 2018, the National Council for Scientific and Research Development reported that Malaysia would need 500,000 scientists and engineers by 2021 to cope with the challenges of the Fourth Industrial Revolution. However, at that point, it had only 70,000 registered engineers. And in 2019, only 44% of students chose the science, technology, engineering and mathematics stream compared with 48% in 2012.

There is a clear opportunity for women to meet the demand for skilled tech workers, which will also help narrow the gaps in gender equality. If women successfully make the transition to tech with the right resources and support, they will be in a better position to navigate a digitised post-pandemic world.

Building blocks for gender parity

It will require a public-private sector effort to transition more women into tech-related industries. The government is doing its part to address this with the recently launched MyDIGITAL initiative, which aims to build an inclusive digital economy for all Malaysians.

According to the Malaysia Digital Economy Blueprint unveiled as part of MyDIGITAL, it is estimated that the digital economy will contribute 22.6% to the country’s GDP and provide 500,000 job opportunities to the digital economy.

In the fifth thrust of its plan to accelerate the digital economy, the government outlined a vision of creating an inclusive digital society by facilitating access to and programmes on digital entrepreneurship for vulnerable communities (including women). These measures are encouraging as there are major challenges that need to be addressed by the private sector to get more women into tech.

Women must also overcome pervasive structural and societal barriers, such as having less time to refresh or learn new skills or search for employment because of the time spent on unpaid care. As well as financial constraints, women may not have equal access to the professional networks and sponsors that can help them navigate job transitions.

One change that has been brought about by Covid-19 is the normalisation of working from home. Women now have an option to accommodate their family and professional commitments without potentially sacrificing one for the other.

The benefits to tech companies addressing these challenges will go far beyond meeting the demand for skilled workers. According to McKinsey’s research, there is a clear “diversity dividend” for companies in the top quartile of gender diversity. These companies are 25% more likely to have above-average profitability than companies in the fourth quartile.

Organisations with more than 30% women executives are more likely to outperform companies where the percentage ranges from 10% to 30%, while these companies are more likely to outperform those with even fewer women executives or have none at all.

Getting more women into skilled jobs, especially in tech, can help address three imperatives: to close the gender gap, to increase the tech talent pool and to reskill the workforce for the future of work. This is a rare opportunity and a complex one. It is an opportunity that we should not back away from.


Li-Kai Chen is managing partner and Ee Huei Koh is a partner at McKinsey & Co’s Kuala Lumpur office

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