Table Speech


Rotary Opens Opportunities

November 4, 2020

Ms. Kathy Matsui
Vice-chair, Goldman Sachs Japan


 I stand here today as a former Rotary Scholar. I owe what I am today to the generous support and understanding of Rotarians around the world. I am a second-generation Japanese American born in the U.S.A. My parents were originally from Nara Prefecture and went abroad to California after graduating from high school. They toiled away on a farm and went through hard times to raise four children who all became Harvard graduates. Today, my father’s orchid farm in Salinas, a small town in California, has grown into a large business with a market share of 20% in the U.S.A.

 I first came to Japan as a Rotary Scholar after graduating from Harvard University. I studied Japanese at International Christian University and then enrolled in Kobe University Graduate School for one year. During the summer, I worked at the former Mitsui Bank Head Office as the first foreign trainee, which became an eye-opening experience. After completing my Master’s degree at Johns Hopkins University in the U.S.A., I entered the financial industry and was transferred to Japan when the country was at the height of the bubble economy. In 1994, I became Vice Chair for Goldman Sachs and have pursued my career as an investment banking analyst for three decades. I decided to embark on a new chapter of my life from next year.

 Today, I want to talk about “womenomics (women + economics)” from an analyst’s perspective. I have been working on the theme over two decades and observed some positive changes in this country as well as persistent challenges to female labor participation. Given the three key determinants for economic growth which are labor, capital and productivity, I believe gender diversity in the workplace is the key engine of economic growth.

 Back in 1990, Japan’s female labor force participation rate (percentage of economically active female population aged 15-64) stood at just 55-56%. As the Japanese economy expanded, combined with chronic labor shortages, the rate has risen sharply to 72% which outnumbers the U.S.A. (67%) and the Eurozone (63%). Not a few institutional investors find these figures surprising. As we take a closer look at the labor climate, however, the ratio of female mangers stands at 13% which is only half of other advanced economies, while board-level female representation is merely 5%. I believe the second phase of womenomics should aim at elevating female representation in leadership positions.

 We estimated the potential economic impact from closing the gender employment gap and shifting all female jobs to full-time employment would boost Japan’s 500-trillion-yen GDP by 15%. Unleashing the under-utilized potential of the female population will be the key to reinvigorate our economy.

 Let me debunk three myths about women in the workforce that could do more harm than good and prevent women from achieving their full economic potential. Myth No.1 says women drop out of the workforce due to ‘pull’ factors rather than ‘push’ factors. Pull factors include childcare, eldercare or any life events that pull women out of the workforce, whereas push factors are any reasons women are pushed out of their positions that include frustrating work conditions. Surprisingly enough, a survey conducted by a NPO to thousands of women in Japan, the U.S.A. and Europe revealed an overwhelming number of women quit work due to ‘pull” factors in the U.S.A. while the majority of women in Japan quit because of ‘push’ factors. The survey results show that governmental policies that address ‘pull’ factors such as expanding childcare and eldercare services cannot be a magic bullet unless corporate leaders initiate reform within organizations to address ‘push’ factors and commit themselves to be more thoughtful and proactive about managing women’s careers. Myth No.2 claims diversity in the workforce has no impact on corporate or stock market performance. There are a number of research results that prove a positive correlation between diverse leadership and corporate performance. A Fortune 500 survey shows companies with at least three female directors have higher Return on Equity (ROE) and Return on Invested Capital (ROIC). Our team published “Womenomics 5.0” last year and made a business case that gender diversity in the decision-making process would broaden perspectives and have beneficial effects on organizations and their economic performance. Moving on to Myth No.3, it holds that more working women would further depress the already low birth rate in Japan. The empirical evidence proves otherwise and data indicate a positive correlation between female labor participation and birth rates in countries like Sweden, Denmark and the Netherlands with relatively higher number of working women. Similar positive correlation holds true across 47 prefectures in Japan.

 Although we find pessimistic views in the media regarding gender diversity, I always try to look on the bright side of things. Let me highlight two tailwinds that should help move the diversity needle. One is the major expansion in ESG (Environment, Social and Governance) investing that proves investors will focus more on how engaged companies are in ensuring gender diversity and information disclosure. Another important tailwind is shifting attitudes among millennials and younger Japanese towards work/life balance, also shown through questionnaire results where an increasing ratio of single young males prefer dual-career households.

 Before I close my speech, let me touch upon an initiative that has created a positive impact towards a brighter future. My Harvard alumna founded the Asian University for Women (AUW) in Chittagong, Bangladesh. In 11 years, AUW has educated over 1,000 female students from South Asia and the Middle East who further pursued their academic career in prominent and renowned universities including Cambridge, Oxford and Stanford. AUW is supported by sponsors including Uniqlo, Takeda Pharmaceuticals and Hitachi. Let me ask for your generous support for AUW to provide hope and opportunities for a better future for the coming generations.