Our economy depends on diversity
This article appeared in The Herald’s Agenda section on Tuesday, 22nd May
I’m not sure if the Canadian Prime Minister Justin Trudeau and I are ever going to cross paths – but if we do, then I’d like to thank him for the following quote he made in a speech last year at the World Economic Forum. He said, “Diversity is the engine of invention. It generates creativity that enriches the world”. For me, it captures perfectly why we must embrace diversity – it enriches us as people, as an economy and as a society.
It should go without saying that everyone should be treated equally and able to achieve their potential – no matter their background, ethnicity, culture or gender. There is no place for outdated attitudes in modern, vibrant Scotland.
Economically speaking, however, equality and diversity in the workforce should also be a given – and the evidence exists to support how vital this is for the performance, effectiveness and credibility of businesses and public organisations.
The McKinsey report Diversity Matters shows that gender and ethnically diverse companies are more likely to outperform those companies which are not.
Meanwhile, the IMF looked at data from two million companies across Europe last year – and found strong evidence that companies with a higher proportion of women on the board tended to be more profitable.
And perhaps most strikingly, research by Strathclyde University indicated that if women started up businesses at the same rate as men, it would add 5.3% to Scotland’s GDP.
The evidence is certainly clear, but how are we doing in reality? Well, we have seen the gender employment gap reduce over the last decade and a limited decrease in the pay gap. We can also note with pride that for the first time, over half of all new appointments to regulated public boards were women, and 45% of all these boards are now female.
However, there are some less positive statistics, which are by no means unique to Scotland – figures show that men are still paid more than women, and the impact of childcare costs can force many women to reduce their hours or stop working after having children.
In addition, women are still concentrated in the lower grades and in too narrow a range of occupations.
As a government, we recognise that there has been progress but improvement is still needed, and we are continuing to respond to these challenges.
In the area of enterprise there has been increasing appreciation of the role of women in enterprise. However, only 20% of Scottish SMEs are led by women and men are twice as likely to start up a business. In social enterprise by contrast, 60% are led by women.
We have therefore created a Women in Enterprise Action Framework bringing together business, academia and government to promote women in enterprise and close the gap that exists between men and women business start-ups. We are also tackling the wider gender gap in employment with free childcare, supporting returners to work and taking measures to address diversity and gender balance on boards through legislation. We have also placed requirements on public bodies through the Public Sector Equality Duty.
You may work for one of the 366 businesses which have now signed up for the Scottish Business Pledge and my congratulations if you do. This partnership between government and business, where companies make a voluntary commitment to adopt fair and progressive business practices, has nine components.
Employers must pay the living wage – currently £8.45 – to employees, meet at least two of the other components, and commit to achieving all nine, which includes making progress on diversity and gender balance. Anything which encourages more women and diversity in the workplace is to be welcomed and we will continue to promote and extend this valuable initiative.
It’s a sad fact that people from ethnic minorities or who have a disability are up to twice as likely to be unemployed or living in poverty. We have decided to give particular focus to employment for both these communities. We’re doing this through our Fairer Scotland for Disabled People delivery plan and our race equality framework. We intend to halve the disability employment gap and our plans include a work experience scheme for young disabled people and 120 new internships across the public and third sectors.
In the Modern Apprenticeships programme, which is designed to target 16-24 year olds; there is an action plan to deal with the under representation of disabled people and ethnic minorities and to address gender issues.
As employers and as individuals, we have the ability to make a difference for diversity and influence the type of society we want to be. Let’s do that.