Many impact-oriented initiatives are increasingly recognizing the opportunity to support the private sector to empower women in the workplace and generate direct financial benefits for firms. Research shows that smaller firms in low- and middle-income countries (LMICs) account for more than two-thirds of all jobs and most new job creation (ILO, 2019b). Such firms are more likely than large companies in LMICs to hire from marginalized groups that experience higher unemployment (ILO, 2019b). Women own up to one-third of all businesses operating in the formal economy worldwide, and millions more operate informal small- and medium-sized enterprises (SMEs) in LMICs.
This paper introduces the Women-Inclusive Return on Investment (WI-ROI) Framework, which builds on an existing body of evidence and research around the business case for investing in women’s inclusion.
Rather than serve as a how-to guide, the WI-ROI Framework reflects the industry outlook on women’s inclusion at the firm level, focusing on the following:
● Women-inclusive business strategies that reflect the current state of evidence in LMICs, which include Talent and Leadership, Workplace Culture, Supply Chains, and Consumers.
● Firm-level financial benefits of women’s inclusion and empowerment for privately owned firms in LMICs.
● Key building blocks for generating a potential WI-ROI.
● Examples of good practices from SMEs in LMICs.
This framework paper’s intended primary audience is USAID, its implementing partners, and impact investors involved in enhancing women’s inclusion and empowerment in PSE activities, with a secondary audience of SMEs in LMICs. The WI-ROI Framework is useful for development practitioners who seek to better align their measurement and learning systems with how the private sector measures financial outcomes. The framework provides a focused understanding of firm-level financial benefits that are relevant to privately owned companies in LMICs, a frequent private-sector partner of USAID’s women-inclusive PSE activities. It also highlights metrics commonly used by private firms for calculating return on investment (ROI) and aligns them with women-inclusive strategies.