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Diversity could deliver a new Scottish economic powerhouse

The article below is a summary of Anne Richard’s TEDx talk taking place today.

On the face of it education and washing machines do not have a great deal in common. One prepares a person’s mind and never truly stops; the other cleans clothes and can sometimes feel like it will never stop. But both present humans with the opportunity to improve their circumstances. They can teach us something about what we can do to unlock Scotland’s enormous economic potential.

Scotland was a pioneer in education. It began with the Education Act of 1646 which mandated that every village in Scotland should have its own teacher. It is easy to forget how remarkable this was now universal education is the norm across the developed world. But this was over 130 years before 13 states joined together to form a place called the United States of America. It was a moment of extraordinary foresight and a catalyst for the Scottish Enlightenment of the late eighteenth century. This was an unparalleled flourishing of science, philosophy and the arts which culminated in a new economic vision – Adam Smith’s The Wealth of Nations – and the dawn of Scotland as an economic powerhouse.  Even Winston Churchill recognized this, remarking “of all the small nations of this earth perhaps only the ancient Greeks surpass the Scots in their contribution to mankind”.

Surely the impact of the lowly washing machine (which, by the way, was not invented in Scotland!) pales into insignificance in comparison with the economic effect of universal education?

Perhaps not: But the mechanisation of domestic tasks was a critical step in allowing women to enter the workforce during the second half of the twentieth century. Just as tractors vastly decreased the time one person needed to work a field, inventions like the washing machine greatly reduced the time and effort required to accomplish basic domestic tasks. Mechanisation freed many women to take up work outside the home for the first time and countries like the UK enjoyed an enormous economic dividend as a result. Suddenly, the economy was able to produce more from its resources because it was not reliant solely on just half the population to do so.

Female participation in the Scottish workforce now stands at 72%, three percentage points higher than the UK as a whole. This is fantastic progress but Scotland (and most other countries) is still squandering too much of the opportunity which lies in its potential female workers. Studies have shown that raising the participation rate of women to that of men would increase the Gross Domestic Product of the US by 5%, Japan by 9%, the United Arab Emirates by 12% and in Egypt by a staggering 34%. For those women in work, too many face barriers to progressing in their careers. That is unfair but, just as critically, it makes no business sense and means our economy is not operating at its maximum capacity.

Unlocking Scotland’s potential requires concerted effort from all corners of society, from policy makers to educators, civil society, business and the media. Policymakers must create a framework under which change can occur. The structures which allow parents to divide parental leave, access full time affordable pre-school care and high-quality wrap around care once children reach school age are critical in giving parents the flexibility to work and raise their children and in giving men equal opportunities in this respect to women. School curriculums must encourage many more young women to study science, technology, engineering and maths (STEM) at university. Boys and girls should study STEM and humanities all the way through school and use Scotland’s four year undergraduate courses to allow transitions between subjects once in tertiary education.

Unlocking Scotland’s potential requires concerted effort from all corners of society

The media can play its part by avoiding lazy stereotypes about gender. Only 20% of ‘experts’ are female and women are much more likely to be portrayed as victims in the media than men.

Employers must raise their game too. We know that young women do extremely well through the anonymised and thus largely meritocratic examination system in education. It is when they enter the workplace that the subjective assessment criteria for recruitment, promotion, appraisal and pay hit them and they start to lag their male counterparts. Every organisation suffers from biases of which they are not aware (and perhaps from some of which they are) that influence who they recruit and how they treat people. It makes good business sense to eliminate these biases:  mixed teams with more diverse views are simply better problem solvers than homogenous ones. This is a matter of business advantage in a tough and competitive world.

But the first step in solving a problem is acknowledging it exists, which is why data gathering on equality and diversity around pay and promotions is so important.  I would like to see a "badge of honour", the equivalent of a kite mark for organisations committed to transparency and action on these issues, similar to the excellent Athena Swan initiative that is used in the university sector.  This is something where government could, and should, help.

Scotland is a small, agile and vibrantly diverse economy.  If policymakers, the media, employers all play their part, we can help it reach its full potential. 

Creating time meritocracies will not be easy. Biases are engrained in ways we do not even know, much less acknowledge.  Nor will it be too easy change the portrayal of men and women in the media. But the prize is worth the effort – a more diverse and inclusive economy is a stronger and healthier economy.

This article was originally published  in the Herald Scotland on 8 June 2015.

Aberdeen Asset Management Chief Investment Officer Anne Richards will be speaking on 12 June at the TEDxGlasgow conference

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