Foreign Direct Investment (FDI) is one of the most powerful tools for driving economic growth, boosting innovation and creating jobs. But to unlock its full potential, we must address an often-overlooked fact: FDI works better when it works for everyone.
Today, women remain underrepresented in key sectors — such as energy and the digital economy — in both developed and developing countries. They continue to miss out on opportunities as business owners, decision-makers and employees. Increasing their participation can yield measurable economic benefits for businesses and economies alike.
Pay gaps persist too, with women earning significantly less than men on average. At the highest levels, leadership remains overwhelmingly male, particularly among the world’s largest corporations. This is not just an issue of fairness: it represents a significant economic opportunity. Reducing gender disparities in employment and entrepreneurship could substantially boost global economic growth. But achieving this requires targeted policies and structural reforms.
The Business Case for Inclusion
Unctad research shows clearly that companies with more women in leadership roles are more innovative and profitable. FDI can be a key driver of gender equality, if harnessed effectively. For example, in some markets, foreign companies are more likely to hire women in skilled positions and offer significantly higher wages compared with local firms.
Multinational enterprises from markets with high gender equality can also transfer inclusive business practices, improving talent retention and workforce efficiency in host economies.
FDI’s potential to support women’s economic participation is significant: in countries where foreign investment increases, more women start their own businesses and participate in the economy. Multinational enterprises can play a key role by investing in training, mentorship and networks that strengthen the capabilities of women entrepreneurs and workers.
For governments, there is a competitive advantage to integrating gender into investment strategies. Countries with strong female labour force participation and entrepreneurship attract more FDI, because they signal a progressive and stable business environment.
For example, Unctad’s work shows that investment promotion agencies can help advance gender equality by connecting women-led businesses to global supply chains, supporting female entrepreneurs and attracting investments that create better opportunities for women.
In turn, increasing women’s participation can attract FDI. Countries that invest in women’s education and skills development create a workforce that is more attractive to foreign investors. Women have made progress in entering science, technology, and engineering (Stem) fields in recent years, but they still remain significantly underrepresented in these sectors. This points to an untapped pool of talent that smarter investment policies could help unlock. Multinational enterprises can also help close skill gaps and drive innovation by promoting Stem education and career opportunities for women.
Beyond Capital
To strengthen economies through FDI, governments can take targeted actions that help businesses and investors make the most of existing opportunities.
First, expanding access to investment for underrepresented businesses — including those led by women — can foster a more competitive marketplace. Many high-potential businesses are left as untapped investment opportunities because of structural barriers, not lack of economic viability.
Second, governments must leverage talent within all demographics for long-term growth. Workforce skills and education remain key drivers of FDI. As economies invest in science, technology and engineering skills, they should ensure broad and inclusive participation within these areas to help meet investors’ growing demand for skilled labour.
Third, policy-makers — as well as businesses — can improve investment strategies through data-driven strategies to track and analyse workforce trends, ensure capital is directed toward the most productive opportunities, and identify gaps to be tackled. In many countries, data on women-owned businesses remains scarce, making it challenging to fully assess their economic contribution and unlock their potential. Multinationals can contribute by sharing best practices and data on gender diversity, while organisations like Unctad can play a vital role in collecting, analysing and disseminating gender-disaggregated data, to better assess the economic impact of women’s participation.
The future of investment is not just about capital. It’s about maximising economic and human potential. Ensuring that government investment strategies recognise the full range of talent, innovation and business potential leads to stronger economies and more resilient businesses.
Rather than being an abstract social goal, broadening participation in investment is a proven economic strategy that strengthens returns, improves business outcomes and enhances global competitiveness. The question is no longer why this matters. It’s how quickly economies can capitalise on the opportunities that are right in front of them.
Nan Li Collins –The writer is Senior Director of the Division on Investment and Enterprise at UNCTAD and the chair of UN Sustainable Stock Exchanges Initiative.
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