How women could build economies the size of the U.S. and China combined

As much as $12 trillion of economic opportunity, or 42% of the full potential, could be achieved in 2025 if countries were to emulate the neighbor in their region that has made the most progress on bridging its gender gap in the last decade. This is equivalent to adding the combined GDP today of Japan, Germany and the United Kingdom. Female workers would contribute about double the GDP growth they are set to achieve in a business-as-usual scenario.

Globally, action on four fronts—education, financial and digital inclusion, legal protection, and unpaid care work—are critical to accelerating progress on gender parity in work. These four areas are also important because of their strong correlations with other aspects of gender equality in society. For instance, legal provisions guaranteeing the rights of women as full members of society reduces the likelihood of child marriage, violence against women, unmet needs for family planning and education. MGI’s study identifies 75 interventions and more than 150 case examples around the world to illustrate a full range of approaches that are already yielding results.

The most successful gender initiatives tackle deep-rooted attitudes and behavior, and are implemented by diverse partners. The work involved in closing the gender gap does not fall to governments and the social sector alone. The private sector has a critical role to play—to their own benefit as well as that of society. There is an expanding body of evidence that increasing the presence and representation of women in leadership positions within companies helps improve performance.

Companies in the top quartile for gender diversity are 15% more likely to have financial returns above the average in their national industry, according to McKinsey’s Women Matter research. Focusing on women can help firms improve their understanding of their customer base and their targeting of women consumers. And boosting gender diversity could give companies a wider pool of talent — increasingly important given a widening skills gap.

So what could a business agenda look like? The first step for CEOs is to commit to the goal of gender equality and make it a genuine strategic priority for the company. Experience thus far suggests that leadership has to come from the top. They could also go a step further and collaborate with their distributors and suppliers to set gender-neutral business norms. Or, most ambitiously, they could lend their voice to a broader societal movement to drive change. Within companies, gender inequality needs to be tackled at all levels from hiring to wage-setting to performance reviews.

At each level of the corporate ladder, there’s a lower percentage of women than the level immediately below, according to McKinsey and LeanIn.org’s recent survey of 118,000 US companies and nearly 30,000 employees. Policies that do not penalize flexibility and part-time work arrangements and that promote options for telecommuting, provide adequate paternity and maternity family leave, plan for onsite child-care provision for employees, address unconscious biases, and revamp the 24/7 culture that especially harms women, are all gender-neutral initiatives that can improve the work environment for men and women.

The new frontier for companies is being true partners in driving broader social change, outside their individual organizations. One of the first ways to do this is to promote diversity among a company’s suppliers and distributors. US retailer Wal-Mart (WMT) has deliberately increased its sourcing from businesses owned by women in the belief that empowering women will make the company more successful. More companies could reward and actively support those partner organizations that reduce gender discrimination or remove barriers preventing women from taking on more productive work. Companies could also support women through education and training, and helping budding female entrepreneurs to gain access to capital.

In the long run, such efforts could help companies spread their brands to new markets, and more effectively target women consumers. Companies have a range of unique skills from technology to finance, and the clout to use them to drive change. For example, marketing and communications multinational Ogilvy & Mather lent its expertise pro bono to India’s Bell Bajao—Ring the Bell—campaign to increase awareness of domestic violence through public-service announcements on radio and television.

Supporting women as a part of corporate social responsibility efforts is also a powerful approach to driving change. The Allstate, Avon, and Mary Kay Foundations have all funded initiatives to help combat violence against women in the United States. Many large companies are household names, and their corporate social responsibility efforts could include media campaigns to help empower women. Proctor & Gamble (PG) has launched a #SharetheLoad television campaign in India to draw attention to attitudes that laundry is solely a woman’s task. Finally, companies can be powerful advocates, using the clout of their often powerful brands to help drive change.

Companies can actively convene new coalitions. One such is Germany’s Chefsache—German for CEO priority. McKinsey & Company and other leading multinational companies are collaborating with the government, players in the social sector, and the media to drive broad change in social attitudes that influence whether women take leadership roles in business. There is every incentive for business leaders to ensure that their companies are at the forefront of such efforts. Enabling women to be equal partners in work and in society is not only equitable in the broadest sense, but makes economic and business sense.

Jonathan Woetzel is the Shanghai-based director of the McKinsey Global Institute. Anu Madgavkar is an MGI senior fellow, based in Mumbai. Kweilin Ellingrud is a partner in McKinsey’s Minneapolis office.