This sector profile focuses on gender-based opportunities and gender-smart investing as an investment strategy for the education sector. It aims to support investors and fund managers to identify existing and future opportunities for adopting a gender-smart approach, covering investments in schools, universities, technical and vocational education institutions, education technology, and other education to employment investments. See CDC’s full Gender Sector Brief for the evaluation of education investments, including screening, due diligence questionnaires and quick facts.
Gender-smart investing is smart business. We know that private providers of education can help close gaps between men and women in access to education and skills. We also know that a majority of technology industries are facing skills shortages. Encouraging women’s access to science, technology engineering and mathematics (STEM) subjects can help address these needs and increase talent pools. Ultimately, we know that women are highly represented across the education sector as employees and teachers, yet their value can be overlooked, especially in leadership roles and as entrepreneurs in the emerging EdTech sector. This presents a significant business and impact opportunity.
Adopting gender as an investment strategy can also help investors maximise their contribution to the United Nations Sustainable Development Goals (SDGs). There is significant potential for investors in the broad education sector to link their gender efforts to SDGs, shaping gender outcomes in line with SDGs 4, 5, 8 and 10, linked to quality education, decent work, economic growth and reduced inequalities.
Guidance on ESG issues and opportunities linked to the education sector, including gender-based environmental and social risks, is provided in the CDC ESG Toolkit for Fund Managers.
Why take a gender lens to education investments?
- Business case
- Increasing labour productivity, innovation and leadership performance.Countries in sub-Saharan Africa face huge shortages of teachers. To achieve universal primary and secondary education by 2030, the region needs 7.6 million new teachers to fill posts. Women in education are typically working as teachers and do not necessarily access jobs in EdTech and in school leadership and administration. Increasing the share of women in senior management and leadership could help education businesses drive labour productivity, innovation and operational efficiency.
- Increasing reputation and societal responsibility on education. The private sector is already educating one African student in five, and this will rise to one in four by 2021. When schools practice gender equality, for example by ensuring female representation in school leadership and administration, or in teaching traditionally male-stereotyped subjects (such as science and physical education) to girls and boys, they can build more positive gendered expectations. This can in turn help their overall offering and positioning on the education market and increase their corporate reputation.
- Tapping into education to employment financing opportunities. Nearly one in four girls aged 15-19 globally are not in education, employment or training, compared to one in ten boys. In sub-Saharan Africa, NEET is 24 per cent among adolescent girls and young women (aged 15 to 29) and 13 per cent among males. According to UNICEF and Gender-Smart, adolescent girls and young women are a significant but currently under-served global market, especially in low-income and middle-income countries. Applying a gender lens to safety and education financing can help address constraints related to education, entrepreneurship, and employment. Investing opportunities go beyond traditional education financing and range from Ed Financing, EdTech, infrastructure, technical and vocational education and training, massive open online courses (MOOCs), career coaching, to microlending. More than $21 billion in existing impact investments flow into these sectors today.
- Bolstering equal customer or student participation. Ensuring gender balance in teaching positions makes a significant difference in developing countries, where girls often face considerable social and cultural barriers to an education. Women teachers lead to higher enrolment and retention rates for girls, allow female students to have more positive educational experiences, and even mitigate cultural and social barriers that keep girls out of school. In some contexts, girls are not allowed to attend school if there is a male teacher. Hiring female teachers will increase enrolment rates for girls. Furthermore, it has been demonstrated that girls are more likely to stay in school when taught by women.
- Impact case
- Improved economic opportunities for women. Education for women is the most effective means for reducing gender inequalities and guaranteeing the full participation of women in society and in the economy. Globally, one additional year of girls’ schooling resulted in a 10 per cent increase in income. Girls’ secondary education is consistently and strongly associated with increased decision-making power. Education has proven to reduce the likelihood of girls becoming child brides. According to estimates, ending child marriage could generate more than $500 billion in benefits annually each year. Investors in the education sector should support a multi-disciplinary approach to skills development for women and girls. The development of all numeracy, literacy, digital and job-specific skills in tandem is integral to increasing quality education and boosting resilient employment outcomes for both women and girls.
- Enhancing quality education for economic development. Globally there still remains significant inequality in the number of girls and boys who attend school and the time they spend in school. An estimated 258.3 million girls are out of school, and 32.3 million of those are of primary school age (19 million are in sub-Saharan Africa and seven million are in South Asia). There are 5.5 million more girls of primary school age out of school than boys. In West and Central Africa, if a girl has not entered primary school by ten, it is very likely she never will. In India, the mean average number of years of schooling for women is 4.1 years. There is also inequality in the number of women who hold leadership positions working at schools and education institutions. In Kenya and Tanzania, nearly half of primary school teachers are female, yet fewer than 20 per cent of school principals are women. Better-educated women tend to be healthier, participate more in the formal labour market, earn higher incomes, have fewer children, marry at a later age, and enable better healthcare and education for their own children (should they choose to become mothers). Poverty is the principal factor for determining access to education, and women are more likely to live in poverty globally. Education is one of the primary tools for moving out of poverty. Without interventions, this cycle will continue.
- Building safe education services and respectful cultures at school. Evidence shows that sexual harassment and gender-based violence are key barriers to young women’s education and employment. Schools that are located far from local communities, as well as schools without any toilets, or toilets shared with boys, pose a serious health and safety risk for girls. In sub-Saharan Africa, one in three primary schools do not have toilets. Safety risks or risks of sexual harassment could prevent girls from attending school at all. Studies indicate that fear of sexual violence within school, or to and from school, is often an important factor discouraging adolescent girls from continuing their education. Studies in Liberia, Rwanda and Tanzania show that young women report a preference for self-employment or female-dominated industries due to sexual harassment.
- Tackling digital education gender gaps. EdTech is considered a frontier market in global education and the momentum behind it is growing. Women represent a large customer segment for EdTech products, enhancing instruction and education delivery and tackling a range of gaps in access. The EdTech market is projected to grow to $220 billion by 2017, with the US market growing by 47 per cent and the EMEA countries (Europe, Middle East and Africa) projected growth standing at around 25 per cent. With the right tools and gender-smart solutions, EdTech products have the ability to tackle gender gaps and benefit women’s economic empowerment. This involves reviewing digital gaps that prevent women from accessing digital devices and software, and making sure women and men equally access products.
Gender-smart investment process
- 2X ScreeningThe investor should answer 2X-aligned screening questions before the deal is submitted for approval. The questions below explore gender-based opportunities and focus on the company’s smart inclusion of women across its workforce and supply chain, and its efforts to serve female customers. Screening questions will help determine: (1) If the deal meets thresholds and/or qualifies under the 2X Challenge; (2) if there are potential gender-based opportunities to be explored further in due diligence.
See the Gender 2X Screening Questionnaire for this sector.
- Due diligenceGender due diligence is the process of gathering gender-related data and information from the potential investee company for analysis to determine whether gender gaps present opportunities that may impact performance and affect an investee company’s operations and financials. Deal teams can integrate these questions into existing due diligence workstreams (e.g. E&S, impact, commercial). The investor will collect the due diligence information and proceed to confirm 2X qualification; (2) confirm gender-based opportunities to determine whether to take forward compared to other impact investing themes. Selected sector-specific documents can also be requested to guide due diligence further.
For gender-smart investors, due diligence on gender-based risks and negative impacts is an important aspect of ESG due diligence. Improper screening and poor management of gender-based risks can prevent effective gender-smart investing and have a detrimental impact on a company’s performance in terms of operational costs, reputational damage, stakeholder engagement, employee productivity and loss of confidence.
- Future of workThe concept of ‘work’ is changing across all dimensions: the work itself, the skills required, and where work is done. Artifical intelligence (AI) and automation is increasingly replacing certain human jobs and creating new opportunities. These changes create both a risk and opportunity associated with investing in women’s skills development for jobs of the future. Driving girls’ interest in taking up STEM subjects will be key to ensuring women are able to capture the opportunity associated with AI-related work. As important will be ensuring women are equipped with behavioural, ‘soft skills’ to take up roles that cannot be automated, thereby decreasing the automation risk in their careers, and increasing chances for career progression and promotion.
- Intelligence of everythingAI has the potential to adapt educational content according to student’s needs, delivering individualised remote learning (e.g. putting greater emphasis on certain topics, repeating things that students haven’t mastered). This could improve the quality of education received by women and girls, for example, by enabling them to catch up more easily (in the event of school dropouts) than classroom conditions in which teachers do not have time to reteach materials or to spend a large amount of time assessing individual needs.
- Net-zero economy transitionThe transition towards a net-zero economy creates both risks and opportunities associated with investing in women’s STEM education and skills development for jobs of the future. Driving girls’ interest in taking up STEM subjects will be key to ensuring women are able to capture the opportunity associated with green-related work that requires STEM skills, ensuring they do not get left behind. In addition, improving women’s education outcomes overall will give them the technical and behavioural skills to find green jobs across sectors.
The following resources should help investors and fund managers further develop their gender-smart investing approach in the sector.
- Asian Development Bank: ADB Gender Checklist: Education (2006)
- Caerus Capital: The Business of Education in Africa (2017)
- USAID: A Guide for Strengthening Gender Equality and Inclusiveness in Teaching and Learning Material (2015) and Education from a Gender Equality Perspective (2008)
- UNICEF & Gender-Smart: Investing in the Pathways to Employment: For Adolescent Girls and Young Women in Low and Middle-Income Countries (2020)